FrontPoint Is Liquidating Most Funds


FrontPoint is liquidating most funds, according to Dealbook.

This is not surprising, given a number of blows the firm has been dealt in the past year.

First, the Volcker Rule. As early as last summer, the fund managers had begun planning to spin off FrontPoint from Morgan Stanley. In January, it made the split official.

Then, Chip Skowron, one of the fund’s healthcare portfolio managers, was suspected of being involved in insider trading. Then last month, he was charged with insider trading. A number of people have said that once someone is charged with insider trading, the fund is done. One look at what’s happened to Diamondback (redemptions and this too), Level Global, Barai Capital, and Loch Capital since their investigations is all you need. (It cost three of them at least $9 billion.)

THEN, Steve Eisman said he was leaving. The fund denied it, but remember they also denied to us that it was spinning off from Morgan Stanley (and then it did) and a spokesman denied to Dealbook that it was closing most funds.

But that’s the news: FrontPoint is essentially done; it’s closing most funds.