April 11, 2018 / 2:15 PM / 6 months ago

Hedge fund Folger Hill to merge with Schonfeld

BOSTON, April 11 (Reuters) - Folger Hill Asset Management, a hedge fund run by former SAC Capital Advisors LP executive Sol Kumin, will merge with Schonfeld Strategic Advisors after a period of sluggish returns.

“It became clear that the best path forward for the Folger Hill team was to combine forces,” Kumin wrote in a letter to investors dated April 10 and seen by Reuters on Wednesday.

Schonfeld has been a key investor in Folger Hill’s Asia fund and the move will let “the majority of our staff and investment teams prosper,” Kumin wrote.

Kumin said he will become chief strategic officer at Leucadia Asset Management, which backed Folger Hill. Leucadia will also make an investment in Schonfeld’s fundamental equities fund.

Business Insider first reported the news.

Folger Hill was launched in 2014 after Kumin left billionaire investor Steven A. Cohen’s SAC where he had been chief operating officer. Kumin quickly raised more than $1 billion in assets for the firm which had many portfolio managers pursuing a variety of strategies.

Folger Hill’s Asia fund, which returned roughly 2.7 percent last year and had helped offset some stumbles in Folger Hill’s U.S.-focused business after investor redemptions, will continue to operate. The U.S. fund is being liquidated, the letter said.

Folger Hill employed 45 people in Asia and all their jobs will be preserved. Many of the firm’s U.S.-based employees, who work in offices in Boston and New York, are also expected to move to Schonfeld. (Reporting by Svea Herbst-Bayliss)

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