Yesterday it was revealed that Steve Eisman would be leaving FrontPoint at the end of the month.
Now sources are saying that he’s planning on starting a new hedge fund, according to the Bloomberg wire service.
It was pretty obvious that this was going to happen, despite FrontPoint’s denials.
FrontPoint has been bleeding since a former healthcare portfolio manager, Chip Skowron, was accused of insider trading.
So now, Eisman’s funds at FrontPoint are currently being liquidated.
The new firm – it hasn’t been named yet – will employ members of Eisman’s team at FrontPoint, and others will be hired.
“Client defections prompted Eisman, 48, to leave,” Bloomberg reported.
FrontPoint investors received a letter earlier this week saying that the hedge fund has begun liquidating certain portfolios and would be returning “a significant amount of capital” by the end of this month.
“The firm wrote that it will continue to operate the Quant Macro, Strategic Credit, Rockbay and Direct Lending funds, but notably did not mention the Financial Horizons Fund and Financial Services Fund managed by Eisman,” AR reported.
rumours of Eisman’s departure have been circulating for months, though most speculated he would not be leaving until the end of 2011.
“Clients who choose to invest in Eisman’s new fund won’t pay a performance fee until those losses are recouped,” Bloomberg said.
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