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Crake Raises $1.6 Billion in Biggest European Hedge Fund Startup

Crake Raises $1.6 Billion in Biggest European Hedge Fund Startup

(Bloomberg) -- Martin Taylor, who shuttered Nevsky Capital more than three years ago, has returned to the industry with the biggest hedge fund startup in Europe this year.

His London-based Crake Asset Management has raised about $1.6 billion and started trading on Oct. 1, according to a person with knowledge of the matter. The fund has commitments to take in another $150 million, though it’s closed it to new money for the next two years, said the person, who asked not to be identified because the information is private.

Taylor stands out in an industry facing accelerated outflows as investors revolt against years of mediocre returns and high fees. Investors pulled about $64 billion from the industry through August this year, which is already 71% more than the whole of last year, according to data compiled by eVestment.

Taylor’s success was underpinned by his track record at Nevsky and fees that are well below the industry average. His fund at Nevsky posted an average 18% annual gain during its start in 2000 through January 2016 -- nearly 10 times more than the average for peers.

Taylor offered the lowest fees to the investors who committed the most quickly. His new fund, which bets on stocks, originally planned to charge 0.5% in management fees and 10% for performance on the first half of the funds raised and 1% for management and 12.5% for performance for the rest. Since the capital raised was about 10% more than Taylor’s target, he has further reduced the fees, the person said. Hedge funds traditionally stick to a so-called 2% and 20% fee model.

Crake Chief Executive Officer Richard Walker declined to comment.

Only 289 new funds were launched globally in the first half of the year, making it the slowest start in at least a decade, according to Hedge Fund Research Inc. In Europe, new funds have raised an average of $45 million, with the previous biggest startup amassing $800 million in new capital, according to data compiled by Eurekahedge.

Globally, Crake is also close to being one of the biggest debuts this year, following the $2 billion Woodline Partners launch in August and the $1 billion raised by Cinctive Capital Management last month.

--With assistance from Patrick Henry.

To contact the reporter on this story: Nishant Kumar in London at nkumar173@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Keith Campbell

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