Hedge Fund Turiya Cuts Jobs After Losing Investors’ Cash

(Bloomberg) -- Turiya Advisors Asia Ltd., the Hong Kong-based hedge fund firm led by former Goldman Sachs Group Inc. trader Davide Erro, is the latest to be hit by industry woes, cutting jobs after losing investors’ money.

Turiya let go of six staff, including two people on its investment team, earlier this month, according to a person familiar with the matter. The firm, which had about 20 staff, is down 20 percent this year, the person said, asking not to be identified because the information is private.

The $3.2 trillion global hedge fund industry is headed for its worst annual performance since 2011 as concerns about rising interest rates, trade and political tensions rock markets and augment asset swings. The HFRI Fund-Weighted Composite Index retreated 2 percent in the first 11 months, contributing to an $11 billion shrinkage in industry assets. Hedge funds with a focus on Asia and stocks are particularly struggling.

The turmoil has forced some of the biggest names out of the business. Philippe Jabre, a money manager since the 1980s, is handing back money to investors, as is Jon Jacobson’s $12.1 billion Highfields Capital Management LLC. Other operators exiting include Richard Perry’s namesake company, Eric Mindich’s Eton Park Capital Management LP and John Griffin’s Blue Ridge Capital LLC. Leon Cooperman, meanwhile, plans to convert his firm into a family office at the end of the year.

Turiya, a long-short equities fund, returned 25 percent last year and Erro remains committed to the business, the person said. While a different approach to investing is under consideration, Turiya doesn’t plan to return capital to clients, or become a family office, the person said. It’s also still hiring in areas where it wants to expand, bringing former employee Simon Kemp back into the fold as head of research in July.

Erro started Turiya in April 2010 with $150 million from employees and institutional investors. It was one of the first Asia-based firms to trade stocks globally. By 2015, assets under management had swelled to more than $3 billion, prompting Erro to return 17.5 percent of funds to investors that year to contain the firm’s size and maintain returns.

Erro was once head of Goldman Sachs’s Asia global arbitrage desk and also used to trade for Deutsche Bank AG.

Turiya is his second hedge fund. In 2005, he led a team of 12 away from Deutsche Bank to set up Hong Kong- and London-based hedge fund Gandhara Capital Ltd. Gandhara oversaw as much as $3.8 billion before closing in 2009 after losing money the year prior, the Financial Times reported at the time. From its inception through 2007, Gandhara was making an annualized 19 percent return.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Paul Panckhurst

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