The setback marks a change in fortunes for the duo who started their hedge fund with $1.3 billion in July 2021 and closed it to new money on the first day of trading to control the amount of capital the fund ran.
It also shows the challenges that traders — especially long and short equity fund managers — face to replicate their success when they move out of established multi-manager hedge fund powerhouses like Citadel and Millennium to start on their own. Equity hedge funds tracked by Bloomberg were on an average up 6.6% through July this year.
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“Our largest investors remain very supportive in what has been a challenging few months for the fund,” Caroline Bradley, a member of FIFTHDELTA’s Executive Committee, told Bloomberg News.
FIFTHDELTA manages about $1.5 billion. The firm has seen additional flows from Day 1 investors during the months of losses, Bradley said, adding that new customers have subscribed as recently as Aug. 1.
The fund’s capital-raising success two years ago stood out amid outflows from the strategy as a whole. That year, investors pulled $16.5 billion from the strategy and a further $55 billion have gone out since then, according to data compiled by eVestment.
O’Keeffe and Charbaghi, who worked together for about seven years at billionaire Ken Griffin’s hedge fund firm, focus their bets on industrial and technology stocks globally. Their fund made 12% last year.
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