MutualFundWire.com: When an Underperforming Hedger Liquidates, BlackRock Changes Subadvisors

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Friday, November 27, 2015

When an Underperforming Hedger Liquidates, BlackRock Changes Subadvisors

A recently-pummeled hedge fund shop is feeling some liquid alternative pain, too.

Joe Scoby
Achievement Asset Management
Chief Executive Officer, Chief Investment Officer

On November 23, BlackRock [profile] removed Chicago-based Achievement Asset Management as one of the subadvisors of the year-old, $101.9-million BlackRock Multi-Manager Alternative Strategies Fund. New York City-based BlackRock also revealed plans to add two subadvisors, Marathon Asset Management and Pine River Capital Management, both of which will run fundamental long/short strategies for the fund.

A BlackRock spokeswoman confirmed the subadvisor changes but declined to comment beyond the corresponding SEC filing. MFWire could not immediately reach Achievement CEO Joe Scoby, Pine River founding partner and CEO Brian Taylor, or Marathon CEO and co-managing partner Bruce Richards for comment for this story.

The subadvisor swap comes as Achievement is shutting down its flagship hedge fund. Lynne Marek of Crain's Chicago Business reports that Achievement is returning $875 million in hedge fund assets to investors after some rough performance in 2015. Achievement has 50 employees and offices in both Chicago and London, and its hedge fund peaked about $2 billion in AUM last year.

"This is obviously not what we were aiming for and I just don't think my strategy makes a lot of sense in this market environment so I just decided to give everybody their money back and regroup," Scoby tells Crain's. "The first priority is managing the hedge fund correctly and getting customers their money back. The second thing is, once that's well underway, to explore our strategic options."

Achievement's loss appears to be Marathon and Pine River's gain. 13-year-old Pine River, based in Minnetonka, Minnesota, is a 100-percent employee-owned hedge fund shop with about $15.5 billion in AUM as of December 31, 2014. It has 18 partners and more than 500 employees across offices in Minnetonka, Austin, Beijing, Hong Kong, London, New York, San Francisco, and Shenzhen.

New York City-based Marathon dates back to 1998 and has about $13 billion under management as of September 30, 2015. It's a global credit specialist with about 150 employees across offices in London and Singapore, as well as New York.

Printed from: MFWire.com/story.asp?s=53052

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