Ex-Man team backs Bayswater hedge fund relaunch

Date: Thursday, July 23, 2009
Author: Laurence Fletcher, Reuters

Bayswater Asset Management, a computer-driven hedge fund shut down last year after big losses during the credit crisis, has relaunched after revamping its risk management controls, its new backers said on Wednesday.

San Francisco-based Bayswater had initially been backed at its launch in 2004 with $25 million (15 million pounds) from Man Global Strategies, part of hedge fund giant Man Group (EMG.L).

However, its strategy of trying to exploit inefficiencies in global markets lost 12 percent in the six months to September 2007 and it returned money to investors after being caught out by a vicious circle of deleveraging in July and August that hit many computer-driven funds.

The firm has now relaunched with large-scale changes to its risk management system and added a manual override, according to Revere Capital Advisors, which has seeded the fund with an initial $10 million and also plans to buy an equity stake in the firm, a spokesman said.

Revere was founded by executives including former Man Group chairman Harvey McGrath and former finance director Daniel Barnett, some of whom knew Bayswater from their time at Man.

Revere will also assist with Bayswater's sales and marketing.

"Systematic global macro remains an important strategy for investors," said Revere chief executive Barnett.

The investment comes as the $1.4 trillion hedge fund industry, which suffered $300 billion of net investor outflows between September and June, sees early signs of renewed investor interest in these freewheeling products.

A portfolio run by Man Group invested $50 million in a new start-up fund run by three former Brevan Howard traders, it was announced on Tuesday.