Bleeding, Limping Hedge Fund May Not Have To Be Shot On The Turf

Folger Hill Asset Management is showing some life from 20 lengths back.
By Keith Allison from Hanover, MD, USA (RO9A6242) [CC BY-SA 2.0], via Wikimedia Commons

By Keith Allison from Hanover, MD, USA (RO9A6242) [CC BY-SA 2.0], via Wikimedia Commons

Folger Hill Asset Management is facing an existential crisis. The hedge fund, helmed by former SAC Capital Advisors COO and horseracing enthusiast Sol Kumin, got off to a great start—raising $1 billion at launch—but has proven much less good at holding onto that money, losing 20% in its first two years and another chunk to redemptions. It’s now looking to replace that money with a $400 million fundraise, but that’s a hard sell given the track record it’s working with.

And that’s not even the bad news: We’re now just five-and-a-half months away from the triumphant return of Kumin’s old boss Steve Cohen from whence he never really left, hedge fund management. And Big Steve has big plans for it, namely raising $20 billion. Now, why would anyone stick with Cohen’s former protégé when the genuine article is back on the market, especially when all that protégé has done is reliably lose them money?

Of course, Kumin & co. might be a little less of a longshot if they were not reliably losing money anymore.

Folger Hill Asset Management, which suffered deep losses after its launch, gained 3.7% after fees in the first half of this year in its flagship US fund….

A person briefed on Folger Hill said the fund has continued to make money this month, bringing year-to-date returns through mid-July to about 5%.

A hedge fund started by a former Steve Cohen exec might be turning itself around [BI]