It appears that Reach Capital’s Nigel Hart recently quit managing the Tamarack Fund, a part of UBS’s Private Wealth Management for an alarming reason.
According to a letter we received from a tipster, Hart wrote in a letter to Ned Sienko, the head of UBS’ Wealth Management hedge fund unit:
“It is apparent to us that UBS does not have the marketing resources or organizational structure to generate asset growth in the foreseeable future. This was confirmed at our meeting last Friday.
“The uncertainty regarding the future of UBS wealth management business extends beyond the scope of a reasonable time horizon for us.”
From the looks of this letter, Hart is apparently liquidating the fund because UBS isn’t raising enough money for it and because the future of the PWM business is unknown.
Note: There’s been a rumour for a while that Bob McCann wants to take the unit private.
Below is the full letter we got. It was dated November 9th.
We regret to advise you that ReachCapital wishes to terminate our role as the sub-adviser of the UBS PW Tamarack Fund effective December 31st, 2010. Please accept this letter as the 30 days notice of termination specified in our contract. We expect to be able to have converted all investments in the fund into cash by value date December 31st, 2010.
This decision was taken after much thought. ReachCapital and UBS have enjoyed a successful relationship for many years. However, despite the strong performance in 2009 and 2010, the size of the Fund has not regained a scale that justifies our remaining as the Fund’s advisors. It is apparent to us that UBS does not have the marketing resources or organizational structure to generate asset growth in the foreseeable future. This was confirmed at our meeting last Friday. The uncertainty regarding the future of UBS wealth management business extends beyond the scope of a reasonable time horizon for us. We appreciate the opportunity to work together with UBS and we wish everyone the best of luck in your endeavours to stabilise this business.
We have always placed a great deal of importance on our duty to shareholders in the Fund. This will not diminish during the period leading to our hand off of the fund. The Fund will continue to be managed on a day to day basis through to the end of December seeking to achieve the best performance possible subject to the overarching objective of converting all of the assets into cash. We will offer to write our final letter to shareholders shortly after year end. We are grateful for the trust that the shareholders placed in us and we were glad to be able to obtain a return of +34% in 2009 and a double digit return for this year to date net of all fees.
We reached out to Sienko, UBS, and ReachCapital for comment. None of them have gotten back to us yet.
Here’s what someone from UBS told us in response to the letter:
[PR] probably won’t give a direct answer because there might be a legal situation brewing. But, I will tell you that if these guys were worth their salt, there is NO WAY that senior Wealth Management would let them go. That letter sounds like a FU note from a dumped lover.
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