Nevsky $3 bln fund faces closure-source
LONDON (Reuters) - A $3.3 billion fund run by Nevsky Capital managers Martin Taylor and Nick Barnes is likely to be wound down over the next 12 months after they decided to step aside, a source with knowledge of the situation said.
Nevsky Capital said on Wednesday Taylor and Barnes had given notice they would stop running the long-short equity Nevsky Fund Ltd from March 3, 2011, as the global remit of the fund was becoming increasingly demanding, exacerbated by recent market volatility.
They will continue to manage Nevsky Capital's long-only mutual fund business with a team of emerging market specialists.
Nevsky Capital said: "(The fund managers) feel that whilst their current capability to run the fund with the same intensity as in the past remains undiminished, they are concerned that this may not be the case beyond March 2011."
The directors of the emerging markets focused Nevsky Fund, for which Nevsky Capital is employed as the investment manager, said in a letter to shareholders they would keep their options open on future management and operation of the Fund.
Nevsky Capital, however, has decided against hiring external managers or appointing new managers from within the Nevsky Capital team, as the fund had been marketed as being managed by Barnes and Taylor.
The source said this would support a conclusion that the fund was likely to be closed at the end of the notice period.
Barnes and Taylor have delivered strong performance, with annualised returns of close to 26 percent since inception in 2000, and total compound returns of more than 750 percent. That compares with a return of just over 200 percent for the MSCI Global Emerging Markets index in the period.
News of their decision is likely to spark redemptions from investors in the fund, but Nevsky Capital said there should be no problems meeting client demands.
"We have no view as to the size of immediate redemptions. The Fund is, however, invested in liquid instruments, as it has consistently been since its inception. It is believed that the Fund should be able to meet any such redemptions as they occur in accordance with the terms of the Fund," it said. (Reporting by Raji Menon; Additional reporting by Joel Dimmock, editing by Will Waterman)
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