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Moore Shuts Toronto Office, Fires Ex-Amaranth Traders

Date: Thursday, December 13, 2007
Author: Emma Trincal, Senior Financial Correspondent, Hedgeworld.com

TORONTO (HedgeWorld.com)—The former Amaranth Advisors traders who were running the Canadian office of Moore Capital Management have not met the firm's expectations, and are being let go.

Moore announced that it is closing down the office in a statement obtained by HedgeWorld. Approximately 15 people were laid off on Dec. 12, said a person familiar with Moore's operations. In plain language, the traders did not make money on the books they managed.

Louis Bacon runs Moore Capital, a New York-based hedge fund with more than $13 billion in assets. Following Amaranth's September 2006 meltdown, Moore created Moore Canada, a new unit based in Toronto. Manos Vourkoutiotis, a former top executive and trader at Amaranth, was named to head up the new unit. A team of several senior traders joined Mr. Vourkoutiotis, nine of whom were from Amaranth Advisors Canada Previous HedgeWorld Story.

Moore Canada was not running a separate fund, and the team had no direct outside investors. Rather, its traders managed capital on behalf of two other Moore funds: the Moore Capital Global Investments flagship fund and the Moore Global Fixed-Income Fund.

"We have closed the Toronto office as the team there did not meet the risk-reward parameters that have guided Moore since inception and that our investors have to come to expect," according to a statement from the firm.

The allocation that was given to Mr. Vourkoutiotis' team is unknown. But considering the good performance of the Moore funds that should have been affected by the trades, it is likely that it was contained. The Moore Capital Global Investments fund was up approximately 15% year-to-date as of last week, according to the person familiar with the firm. The other fund—the fixed-income portfolio—posted a 13% gain for the year, he added.

"We want to reiterate that at no time were those funds imperiled as the recent performance of MGI [Moore Global Investments] and FIF [Fixed-Income Fund] clearly demonstrates," Moore said in the statement.

After the closing of Moore Canada, Moore will take positions in the Canadian markets on an opportunistic basis as part of the firm's overall global macro, global equity and global credit strategies, according to the memo. "We will continue to seek to add investment teams in areas that are complementary to our existing roster of strong investment professionals," the firm said.

Mr. Vourkoutiotis managed Amaranth's Canadian debt, equity and derivatives portfolio for six years prior to the hedge fund's default. Neither Mr. Vourkoutiotis nor his associates were connected with the now infamous Brian Hunter, the Amaranth commodity trader based in Calgary, Alberta, who caused Amaranth's demise through bad energy bets.

Mr. Hunter tried to launch a new hedge fund, Solengo Capital Partners, in March Previous HedgeWorld Story. But the Commodity Futures Trading Commission has since sued him for price manipulation in connection with the Amaranth debacle Previous HedgeWorld Story.