Talpins hedge fund returns $6 billion to manage the money
(Bloomberg) — Jeff Talpins macro-trading hedge fund Element Capital Management returned more than $6 billion last year, shrinking its asset base and moving to manage mostly internal funds.
Most read from Bloomberg
The company made its fifth and final recapitalization at the end of the year, reducing its assets to $3 billion, according to a letter to investors seen by Bloomberg News. Now 90% of assets are domestic funds.
The move is part of Element’s plan to have fewer foreign investors. Amid three straight years of declines in which the fund has fallen 20 percent between 2021 and 2023, it has turned to managing lower assets, aiming for higher returns. The fund made 22.5% last year, Bloomberg News reported.
Talpins, one of the hedge fund industry’s most sought-after macro traders, who raised performance fees to 40% in 2019, is among money managers trying to avoid the pitfalls of being too big and too little smart. Many will stop raising new funds, while others such as Citadel, DE Shaw & Co and Point72 Asset Management have switched to returning some of their funds.
Element has been closed to new funds since 2018. About $15 billion has been returned to customers over the past five years, the letter said. Coupled with exits after the fund raised its incentive fee, Element has seen its assets fall from their $18 billion peak.
The firm is gearing up for what it calls “Element 2.0,” which includes new marketing capabilities, expansion into new areas, some hiring, and investments and partnerships with outside fund managers.
“Our journey through Element 2.0 will focus on diversification, innovation and growth,” the firm told clients.
Element is preparing to open an office in Abu Dhabi, expanding into the emirate alongside peers such as Brevan Howard Asset Management, Marshall Waas and Kirkoswald Asset Management. According to the letter, Abu Dhabi is the company’s third international office aimed at enhancing business execution capabilities and talent attraction.
A representative for New York Element, which sent the letter to customers on Tuesday, declined to comment.
