Giving Up the Hedge-Fund Rat Race–At Age 28

Date: Wednesday, April 8, 2009
Author: Mark Cobley, Financial News

Wasim Rehman, the 28-year-old head of risk controls at the hedge fund manager Marshall Wace, has resigned from the partnership and plans to retire from the investment industry.

In a statement to the market this morning, Marshall Wace said Rehman would continue as a consultant to the company, initially full-time as chairman of the firm’s quantitative oversight committee, but then becoming part-time and “thereby fulfilling his desire to pursue other opportunities outside of the industry.”

Rehman has been at Marshall Wace, one of London’s oldest hedge fund companies, since March 2005. He became a partner in October 2006, at age 26, the firm’s youngest partner by three months, ahead of Anthony Clake, who was the youngest member of Financial News’ inaugural list of 100 rising stars in the securities industry in 2005.

Rehman couldn’t be reached for comment.

He will be succeeded at Marshall Wace by James Hanson, former chief risk officer at hedge fund manager Polar Capital. Hanson left Polar last summer and was succeeded by Karim Vellani.

Marshall Wace, in common with many hedge-fund firms, had a difficult time last year. Its flagship Eureka equity long/short fund fell 19%, according to an investor. Its main Tops funds, which analyzes the performance of broker recommendations to select investments, fell between 12% and 18%. Marshall Wace declined to comment on the figures. That compares with the 18% average decline of hedge funds generally, according to industry tracker Hedge Fund Research.

The negative returns contributed to a marked drop in Marshall Wace’s assets under management in the second half of the year, to $6.4 billion from about $13.4 billion. Amid the market turmoil, the firm offered to buy back shares from investors in its listed MW Tops vehicle at the fund’s net asset value. About 86% of the shareholders, by value, took up the offer, reducing the value of the listed vehicle, which had raised about €1.7 billion, or roughly $2.3 billion, when it floated in Amsterdam in 2006, to just €180 million.

Still, the company is pushing ahead with expansion plans, developing a range of funds which will be available to retail investors. These are slated for launch by the middle of this year.

UPDATE: Rehman will turn 29 years old in July.