PointState’s Josh Samuelson Exits Fund He Co-Founded in 2011

(Bloomberg) -- PointState Capital said Josh Samuelson will leave the firm he co-founded with the backing of Stan Druckenmiller, following a year in which the hedge fund failed to recover from a double-digit loss in 2018.

Samuelson, 46, “has decided to retire from investment management,” co-founder Zach Schreiber said in a letter to clients Friday. Samuelson will stay at PointState “for several months” during a transition, Schreiber said, and will remain an investor in the firm.

Zach Kurz, a partner at $6 billion PointState since 2017, will assume many of Samuelson’s responsibilities and also become deputy chief investment officer, Schreiber said in the letter. Greg Ley, a portfolio manager specializing in industrials, materials and energy, is also leaving the firm to pursue an “entrepreneurial opportunity.”

Samuelson’s exit leaves Schreiber as the sole remaining founder of the firm that was started by seven former Druckenmiller staffers in 2011 after their boss closed Duquesne Capital Management.

The upheavals at PointState mark the end of a year in which several well-known managers have called it quits, and many firms have struggled to make money -- a theme for much of the past decade.

PointState has fared worse than many of its peers. It lost 19% in 2018, in part from a wrong-way bet on oil stocks that tumbled in the fourth quarter.

While equities were the firm’s biggest exposure in the first three quarters of this year, losses in other strategies, including corporate debt and currencies, eroded those profits. PointState’s return this year is less than 1%, though it’s gained 3.6% so far in December.

PointState’s Josh Samuelson Exits Fund He Co-Founded in 2011

Since the end of 2015, the fund is down about 18% through the third quarter, even as global stocks have returned 45%.

Schreiber also said in Friday’s letter that the firm had “selectively reduced headcount” to simplify the business and help generate the risk-adjusted returns that clients expect. He didn’t provide further details. PointState had 90 employees as of November.

Early Promise

PointState started with about $5 billion -- $1 billion from Druckenmiller and $4 billion from clients of Duquesne, where Schreiber had been a top money-making portfolio manager.

The firm posted returns of more than 20% in both 2013 and 2014, when it made about $1 billion from a bet against oil. Assets climbed to a peak of $10 billion.

Yet Schreiber couldn’t keep the original team in place. By the end of 2018, only he and Samuelson remained.

In November, seeking to replace money it had lost on trades and through redemptions, the firm opened to new investments. At the time, PointState told potential clients that about 70% of assets were managed by Schreiber and Samuelson, and the rest by teams focusing on everything from energy, materials and commodities to credit and distressed investing.

Investors in the share class that can withdraw money on a quarterly basis have until January 31 to say if they want to redeem at the end of March, Schreiber said in the letter.

©2019 Bloomberg L.P.

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