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Deal of the Day: Morgan Stanley buys Oxhead Capital

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Morgan Stanley bought Boston hedge fun Oxhead Capital, according to published reports. Reuters reports that Morgan Stanley said the hedge fund oversees about $100 million of assets. This is significantly less than the $168 million disclosed in its registration statement. So what gives? Possibilities include Oxhead losing lots of money on bad investments, losing investors, paying its managers huges fees or paying out a good chunk of its total investment capital to investors. Either that or Morgan Stanley just low-balled the number. Or maybe something else entirely.
There’s more good information in the registration statement, including a guess at where the $68 million went. Details after the jump.

First, the Oxhead is relatively small. DealBook points out that it lists between one and five employees, and the number presumably includes the three former Putnam Investments executives who run the shop: Robert Swift, Nathan Eigerman and Daniel Phipps. They also indicate that they have between one and ten clients, and that more than 75% of these are “other pooled investment vehicles (e.g., hedge funds).” The investment funds are divided into seven discretionary accounts.
Second, there’s a hint at where the difference between the $100 million and the $168 million might have come from. Oxhead runs two subsidiary vehicles, Oxhead Global Fund, L.P. and Oxhead Global Cayman Fund, which together list assets of around $60 million. So maybe the number cited by Morgan Stanley just failed to include the assets of the subsidiaries.
That’s just a guess of course. No one is providing any details of the deal, so we’re left with guess work.

Morgan Stanley Buys Hedge Fund
Morgan Stanley buys Oxhead Capital hedge fund [Reuters]
Oxhead Registration Statement [SEC]