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Hedgeweek Comment: Coffey about-turn reflects changed environment

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Greg Coffey is playing it safe and joining veteran fund manager Louis Bacon as co-chief investment officer of Moore Capital Management’s London-based European operation.

Greg Coffey is playing it safe and joining veteran fund manager Louis Bacon as co-chief investment officer of Moore Capital Management’s London-based European operation. Until last week the star emerging markets manager at GLG Partners, Coffey is joining Moore with a 12-strong team.

His decision to join another firm rather than set up on his own, as was expected after he announced his decision to quit GLG six months ago, reflects the current state of the financial markets and the availability, or lack of it, of credit.

When Coffey walked away from USD250m in GLG share options and other bonus payments, the idea of starting his own business did not look like a reckless punt for a manager who had achieved a 60 per cent return with the GLG emerging markets fund in 2006 and 51 per cent last year. But the Australian’s decision to play it safe and join another fund manager is a warning sign that the market environment is showing few signs of immediate recovery.

New York-based Moore Capital was founded almost two decades ago by Bacon, who has been its sole chief investment officer since 1990. A macro investor, Moore has reportedly added employees and attracted new capital this year even as other managers have been firing personnel amid investor redemptions.

As for GLG, it is reported to be conducting a ‘liquidity review’ of its funds and halting redemptions from its USD1.5bn Market Neutral fund for six months. GLG’s share price is down 63.3 per cent over the past six months, compared with a 27 per cent drop for the Dow Jones Industrial Average. It looks as though Coffey’s judgement remains spot-on.

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