Wall Street Folly

January was not kind to many hedge funds.  It was especially unkind to UK based Richmond Capital LLC which ended December with around $524 million in assets — The fund cratered over 50% in January.  That’s a pretty devastating result:

That makes Richmond, launched by Luca
Bechis, an experienced trader with a track record of posting strong gains, among
the biggest losers in a year that is already proving challenging for a number of
funds.

Richmond fell more than 50% in January,
according to data compiled by Banque Syz & Co., a Swiss private bank, and
other investors with access to details of the fund’s performance. The fund had
€350 million ($524 million) in assets as of December 2007, according to Syz.
It was flat last year, but returned gains of about 24% and 18% in 2006 and 2005,
respectively.

Richmond follows a so-called long-short
strategy, which involves buying a portfolio of stocks, while also betting that
other stocks will fall. The fund, known for its concentrated stock bets, has
come under pressure lately, investors say.

Richmond was founded in 2004 by Mr. Bechis,
who is 41 years old. He previously worked at Egerton Capital Ltd., a
well-established London fund firm founded by former Morgan Grenfell manager John
Armitage. Egerton currently has about $7 billion in assets under management, and
invests in European equities also using a long-short strategy. Egerton’s
European Dollar fund was down 5.2% in January. The fund’s annual return since
inception in 1994 is around 20%.

U.K. Hedge Fund Plunges – Wall Street Journal

Tags: Credit Crunch, Hedge funds