Druckenmiller Alumni at PointState Are Looking for New Investors

(Bloomberg) -- PointState Capital, the macro hedge fund started by former traders for billionaire Stan Druckenmiller, is looking for new investors as it struggles to rebound from last year’s double-digit loss.

The $6 billion firm’s main SteelMill Fund dropped about 19% in 2018 and has barely made money this year, climbing less than 1% through September, according to people familiar with the firm. PointState has rarely opened to new money since it began trading in 2011.

Now the firm is competing with the likes of ExodusPoint Capital Management in raising money amid a broad-based flight of capital following years of mediocre industrywide returns and high fees. Clients have pulled $77 billion from hedge funds this year, twice as much as in all of 2018, according to data compiled by eVestment.

PointState, run by Zach Schreiber and Josh Samuelson, was one of the biggest launches ever, starting with about $5 billion -- $1 billion from legendary investor Druckenmiller and $4 billion from other clients of his Duquesne Capital.

A representative for the New York-based firm declined to comment.

At its peak, PointState managed $10 billion, and it has given back $2 billion to investors over the years, the people said. The SteelMill Fund, which runs most of the firm’s capital, had several strong years early on, posting returns of more than 20% in 2013 and 2014 and rising about 13% in 2015. Since then performance has been more muted and it has lost money in two of the last three calendar years.

ExodusPoint Capital Management, which launched last year with a record $8 billion in assets, aims to gather more than $2 billion starting in the second quarter of 2020, people familiar with the matter said last week. The firm was co-founded by Michael Gelband, the one-time heir apparent to Millennium Management founder Izzy Englander, and Hyung Lee.

Argentina Fund

At PointState, about 70% of the investor assets is managed by Schreiber and Samuelson, and the rest by teams focusing on anything from energy, materials and commodities to credit and distressed investing, the people said.

The firm told potential investors last week that it’s also considering starting a new Argentina recovery fund. The firm previously launched two other Argentina funds, one focused on credit and another more diverse portfolio investing in credit, public and private equity.

Other opportunistic portfolios it has created for clients include a distressed energy fund and side-pockets on select trades, the people said. Side pockets are typically portfolios of securities that are hard to sell immediately.

The firm has had much of its exposure in equities in the last several years. Last year’s loss was caused in part by a position in oil stocks that tumbled along with oil prices in the fourth quarter.

To contact the reporters on this story: Nishant Kumar in London at nkumar173@bloomberg.net;Katherine Burton in New York at kburton@bloomberg.net

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, ;Shelley Robinson at ssmith118@bloomberg.net, Christian Baumgaertel, Marion Dakers

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