Crossover hedge funds that invest in fast-growing public and private companies may have lost tens of billions of clients’ money last year, but that hasn’t deterred some managers from planning to bring more of them to market in the coming months, according to a report by Financial News.
The report cites unnamed sources as confirming that Patrick Fu,, who co-led Sequoia‘s hedge fund until October 2021 before leaving in March, is planning to raise as much as $1 billion for his new crossover fund, Los Angeles-based Dandelion Capital Management, with a Q3 launch targeted. Sequoia Capital Global Equities lost about 41% last year in its worst-ever showing.
Kristov Paulus meanwhile, a former senior investor at Boston-based Whale Rock Capital Management who left at year-end, is planning to launch Kultura Capital Management in San Francisco in the second half of this year, despite Whale Rock having lost 43% in its crossover fund last year through November.
Other big crossover losers in 2022 include Tiger Global Management – down 56% in its flagship hedge fund and 67% in its long-only fund – while D1 Capital Partners lost about 30% in the share class in which half of clients’ money can be invested in private companies. Coatue Management and Viking Global Investors, among the best crossover performers, lost about 19% and 23%, respectively.
In comparison, stock-picking hedge funds lost an average 2% last year on an equal-weighted basis, according to Goldman Sachs Group.
