Apparently everyone thinks it’s really bizarre that Chris Shumway has suddenly shut down his huge $8 billion hedge fund, Shumway Capital, especially after it just got a sizable investment from Goldman Sachs.
Shumway announced his retirement in November of this year, and said that a portfolio manager, Tom Wilcox, would take over.
Hedge fund managers had been retiring left and right, Shumway was the 5th high profile manager who’d retired in the past 6 months, so it was strange (he’s only 45), but it didn’t really get weird until last week, when Shumway announced that he was shutting Shumway.
Shumway told investors last week:
I am writing to let you know that after 9 great years, I have decided to return all external capital back to you, our partners, by the end of the first quarter of 2011.
The word was that investors had pulled $3 billion, so he figured there wasn’t enough interest. But that doesn’t make sense because $3 billion is a lot, but it’s not even half of Shumway’s reported $8 billion in assets under management.
So now everyone’s wondering what really happened. If you know anything, let us know.
Here’s what people in the industry told Hedge Fund Alert about the sudden closure:
“They look stupid, like they don’t know what’s going on,” said a consultant who advises pension plans on hedge fund investments.
The buzz among market players this week was that Goldman’s private equity vehicle looks bad for investing in Shumway at what was likely the firm’s top valuation.
“From where we are, it appears that the firm unwound simply as a result of a series of bad PR moves,” said a market player. “Astonishing, really.”
Shumway was one of Wall Street’s best-known hedge fund managers until he unexpectedly shut his hedge fund last week.