As we have noted, ad nauseum some might say, running a hedge fund doesn’t seem to be as much fun as it used to be, which is probably why so many of its most famous practitioners have chosen to, uh, not do it anymore. This is not usually a problem for anybody, really: The hedge fund manager gets to do something that will hopefully make him happier and his clients, whether they know it or not, are freed from paying too much for far, far too little. There is an exception. A small one, to be sure, but a potentially legally-important one: Investors not in the hedge funds themselves, but in the hedge fund firm that manages them. Or doesn’t as much anymore, as Dyal Capital Partners complains about Jana Capital Partners, of which it owns 20%.

David DiDomenico, a Jana co-portfolio manager for the past decade, is now also chief executive officer of Osprey Technology Acquisition Corp. Osprey, which recently raised $275 million in an initial public offering, said it would rely on DiDomenico as it sought takeovers in the enterprise software industry.

The value of Dyal’s investment in Jana was redacted from the lawsuit, but Dyal implied it had paid a large sum for the stake and said it “did not want them to take that money and run.” DiDomenico’s departure from the hedge fund firm would “spell disaster for Jana’s future,” according to the lawsuit. Yet DiDomenico admitted to Dyal that his new venture had taken him “‘outside the Jana box,’” Dyal claims.

Dyal apparently started to get a bit fiddly last year when Jana shut two of its flagship hedge funds, especially since the firm’s overall assets have dropped by more than three-quarters since its 2015 investment. Dyal says it only allowed those liquidations to go through on the understanding that DiDomenico would “keep working full-time at Jana,” which he rather patently isn’t anymore, and so wants its money back, please.

Jana, for its part, says it’s all much ado about nothing: Jana, after all, owns about half of Osprey, and so DiDomenico’s running of it is just a different way of working at Jana full-time. Anyway, it’s not like other successful hedge fund managers aren’t able to remain so while dividing their attention. Steve Cohen assured his investors that he’d be able to keep doing what he does while also turning the Mets around, which he now won’t get to put into practice but which is probably true, since the Mets would be improved by just 10 minutes a month of competence in place of decades of active mismanagement. Ken Griffin remains the sausage king of Chicago while spending the majority of his time scanning real-estate listings. And however much time DiDomenico and Rosenstein spend on Jana’s activist fund certainly seems like enough, given that it rose by more than half last year.

Dyal Sues Rosenstein’s Jana Over Divided Attention at Fund [Bloomberg]

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