Moore Capital’s Coffey bows out as markets stymie hedge funds

Enthusiasm Waned

After he had recovered most of this year’s losses in one week in September, Coffey realized he wasn’t as excited about his gains as he might have been in the past, two people who know him said. Coffey then decided it was time to quit, the people said.

“Greg Coffey has been a significant contributor to Moore’s European business, and we are disappointed that he is choosing to retire from the industry,” Bacon, 56, said in an e-mailed statement yesterday. “We wish him well in all future endeavors.”

Moore, which manages about $13.5 billion, pulled money from Coffey’s fund last year and removed hard-to-sell assets that he inherited when he joined the firm, people with knowledge of the matter said at the time. The move was a mutual decision between Bacon and Coffey to cut the trader’s capital amid markets plagued by the European sovereign-debt crisis, the people said.

Coffey has returned an annualized 4.5 percent since he joined Moore in November 2008. Emerging-market funds have returned an annualized 7.9 percent in the same period, according to Hedge Fund Research Inc.

Moore Stake

The firm last year renamed Coffey’s emerging-markets macro fund, and two vehicles he started in 2009, to add his initials as part of a rebranding of his products. One fund focuses on emerging-market stocks and lost 16 percent this year through September, while the other trades emerging-market currencies and fixed-income securities and fell 2.3 percent, according to investors.

Emerging-market stock funds rose an average of 5.5 percent this year through September, while emerging-market debt funds declined 2.2 percent and macro funds dropped 0.5 percent, according to data compiled by Bloomberg. Hedge funds gained an average of 3.6 percent.

Darren Read, who ran the stock fund with Coffey, will continue to manage the fund and investors will have the option to pull their money as of the end of November, one of the people said. Eric Dannheim, Coffey’s deputy, will continue to oversee the debt fund, from which investors can redeem on a monthly basis.

Coffey was the first trader to share the CIO title with Bacon since Moore’s inception 23 years ago. Coffey owned a stake of between 10 percent and 25 percent in Moore Capital Management LP as of Feb. 2, according to a document filed by Moore with the U.S. Securities and Exchange Commission in March.

Some colleagues and investors said they considered Coffey as a possible successor to Bacon when he eventually steps back from trading. Bacon didn’t hire Coffey with that intention, people with knowledge of the his thinking said.

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