Hedge fund star to launch new UK fund

LANSDOWNE PARTNERS, one of Mayfair’s largest hedge funds, is to open its doors to fund manager Patrick Degorce, a former French navy officer who split from the high-profile activist investor Christopher Hohn earlier this year.

Degorce, who co-founded The Children’s Investment fund (TCI) with Hohn in 2004, is expected to launch a global equities fund on the Lansdowne platform this autumn. Under the proposed arrangement, a small team will share Lansdowne’s office and use its back office and administrative support systems.Degorce is planning to raise $1.5 billion (£925m) for the new fund, to be called Theleme.

“The attraction for Lansdowne is simple: Degorce is one of the most intelligent managers around and now they’ll have that intellect on their doorstep,” said one industry analyst. The venture will be marketed and run separately to Lansdowne, which manages $12.5 billion of assets.

Degorce is a former colleague and long-time acquaintance of Peter Davies and Stuart Roden, co-managers of Lansdowne’s flagship fund, having worked with the pair at Merrill Lynch.

At TCI, the Frenchman played a pivotal role in pushing for the breakup of Dutch bank ABN Amro, which ultimately led to Royal Bank of Scotland’s doomed $101 billion takeover. He also helped drive TCI’s investments in exchanges, including the Deutsche Börse.

The new fund will offer flexible terms to investors, with Degorce planning to charge incentive fees based on performance over the duration of an investment, rather than annually.

Lansdowne was founded by Conservative party donor Paul Ruddock and Steve Heinz in 1998. It attracted controversy after it emerged that it made an estimated £100m from the demise of Northern Rock, betting the bank had been overvalued at least two years before its downfall.