Hedge Fund Copper Arch to Liquidate |
Date: Tuesday, November 20, 2007
Author: Dane Hamilton, Reuters
NEW YORK (Reuters)—Copper Arch Capital LLC, a
$1 billion hedge fund, is liquidating because its founder, former
Morgan Stanley executive Scott Sipprelle, wants a "new challenge,"
according to a letter sent to investors on Nov. 5.
Mr. Sipprelle, who agitated for the breakup of Morgan Stanley in 2005
under then-CEO Philip Purcell, said the firm is not liquidating because
of poor returns. It said its long-term record for long-short equity
investing has been "very good," according to the letter.
"We have achieved multiyear compound returns far in excess of the
market averages over a variety of challenging investing climates," Mr.
Sipprelle said in the letter.
Mr. Sipprelle said all funds in New York-based Copper Arch will be distributed to investors after Dec. 31.
Copper Arch declined to comment. The fund's annual returns could not
immediately be determined, but Mr. Sipprelle said they were not always
above-market.
"Certainly there have been times (like the present petro-Google market) where we have looked hopelessly out-of-step," he said.
Mr. Sipprelle, 44, did not say in the letter what he plans to do next.
A source close to the matter said Mr. Sipprelle is not retiring but
will take time off.
The fund's dissolution comes as hedge and private equity funds struggle
to become more institutionalized as key founders look to retire. For
Mr. Sipprelle, "continuity, merely for the sake of continuity, is not a
sufficient business purpose," he said in the letter, a copy of which
was obtained by Reuters.
"If the world divides between those who believe that a hedge fund
should be like a Puccini opera—soaring, majestic and ultimately
over—and those who believe a hedge fund should be more like a TV soap
opera—emotional, dramatic and serially never-ending—I definitely reside
with the former group," said Mr. Sipprelle.
Mr. Sipprelle and partner Neil Barsky founded Midtown Research Group in
1998 with $18.4 million. The two split in 2002 and Mr. Sipprelle
founded Copper Arch.
News of the liquidation was reported earlier on Opalesque.com, an industry Web site.
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