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Categorized | Financial

Rothschild’s Attara to liquidate operations


Posted on February 29, 2012

Nathaniel "Nat" Philip Vic Rothschild, founder of Vallar Plc, poses in this undated photo provided to the media on Monday, Nov. 22, 2010. Nathaniel Rothschild, a member of the Rothschild lineage that helped bankroll Britain's war against Napoleonic France, is leading a deal that will create the biggest exporter of coal to China.

Nat Rothschild pledged to clean up corporate governance at Bumi

Attara Capital, the hedge fund co-chaired and founded by Nat Rothschild and the successor to the now-defunct activist fund Atticus Capital, is to liquidate its operations.

Attara, which is run by David Slager, a former Atticus partner, is shutting as a result of adverse trading conditions and difficulty raising new money from investors, people close to the fund told the Financial Times.

New York-based Attara did not respond to requests for comment.

The firm was co-founded by Mr Slager and Mr Rothschild to take over the running of Atticus’s $1.2bn European fund in 2009 after Timothy Barakett, founder of Atticus, decided to liquidate the hedge fund manager’s other operations.

Mr Rothschild was also previously the co-chairman of Atticus – named after Atticus Finch, the lawyer in the novel To Kill a Mockingbird. At its peak in 2007, Atticus managed assets of close to $20bn and was renowned for earning its investors high returns, as well as for its involvement in high-profile boardroom battles.

Alongside the UK’s The Children’s Investment Fund, run by Chris Hohn, Atticus earned particular notoriety in Germany after it opposed Deutsche Börse’s bid for the London Stock Exchange in 2005.

Atticus suffered heavily in 2008, however, as global stock markets plummeted. The firm’s asset base shrank as investors pulled funds from hedge funds. By the time of its closure in 2009, it had about $3bn in its main funds, which it returned to clients.

According to a regulatory filing with the Securities and Exchange Commission from late June last year, Attara had assets of more than $1.2bn on behalf of fewer than 10 clients. As of November, the amount managed by the firm’s main fund had dwindled to just over $700m, according to an investor.

The closure of the fund manager highlights the extent to which 2011 was one of the hedge fund industry’s hardest years on record, and its only losing year since 2008.

The average equity-focused hedge fund manager suffered losses of 8.29 per cent last year, according to Hedge Fund Research. Many managers were wrongfooted by overly optimistic assumptions about US growth and eurozone recovery.

Attara has not been alone in struggling to gain traction. Atwater Capital, another fund that was also spun out of Atticus when the firm closed, last month told its investors it was shutting down.