NEW YORK, NY (HEDGECO.NET) – The New York based asset manager, Andor Capital Management LLC, the eighth-biggest hedge fund manager in 2003, lost almost half its assets in July according to publishedreports. The problem started when the firm�s technology portfolio lost about 46% of its assets amounting to about $3.5 billion. Investor withdrawals in the Andor portfolio escalated following thedeparture of two of Andor�s technology portfolio managers. Subsequently, Andor management decided to fold the portfolio.
Prior to the losses and departures, Andor management urged investors not to leave, however as computer and telecommunications shares plunged, investors began to withdraw their assets from the portfolio. David Carlsen, co- manager of the Buffalo Science & Technology Fund explained that people were pricing in too much growth in technology shares. Carlsen�s technology portfolio gained 2 % in July.
Individuals knowledgeable with Andor�s problems explained that the fund had fallen so much behind, that following the �high water mark� provision the managers in the portfolio could not charge or asses further performance fees until the fund reaches its previous achieved returns and exceeds such level. Translated into numbers, the managers in the strategy must achieve more than 26% per year in order to charge performance fees. They decided to fold the fund instead. Andor management declined to comment when contacted.
Andor said last month that co-portfolio manager Christopher James was leaving the investment firm as well as John Regan. Both managers left the firm to start their own hedge funds. Following these announcements, Andor gave investors the chance to pull out their money from its four remaining technology funds. As a result, Andor cut down the number of analysts from 52 to 22, and subsequently closed some of its offices in London, and Seoul. Andor still maintain offices in New York San Francisco, Taiwan, Tokyo and Connecticut.
Dan Benton, who previously worked for Pequot Capital Management, founded Andor in 2001. He split with Arthur Samber, the founder of Pequot Capital, to start Andor Capital.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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