A long-serving former partner at Davidson Kempner Capital Management claims he was forced out of the firm after raising concerns internally, and is now pursuing legal action to obtain documents supporting his allegations, according to a report by Bloomberg.
Michael Herzog, previously a senior trader and partner at the hedge fund, has accused the firm and its chief investment officer Tony Yoseloff of effectively pushing him out after he raised internal concerns he characterises as misconduct.
The report cites court filings in the UK and supporting US legal documents as revealing that Herzog is seeking disclosure of internal records and testimony, arguing these materials are necessary to substantiate his whistleblower claims. He alleges he was constructively dismissed following a series of protected disclosures.
Herzog exited the firm in early 2025 after more than 20 years at the hedge fund, which manages around $37bn.
Davidson Kempner strongly rejects Herzog’s allegations. In a statement the firm said: “Davidson Kempner and Tony Yoseloff, its Managing Partner, unequivocally deny the recent allegations made by Michael Herzog, who left Davidson Kempner of his own volition more than a year ago. This is a classic case of sour grapes in a contractual dispute with a disgruntled former colleague, reflecting his dissatisfaction with historic management decisions. Davidson Kempner and Mr. Yoseloff intend to vigorously defend against these contrived grievances, which appear to be Mr.Herzog’s latest attempt in his long-running campaign to inflate the amounts otherwise payable to him on his departure from the firm.”
Herzog joined Davidson Kempner in 2001 and rose through the organisation to become head of its merger arbitrage and long-short equity strategies. He also played a key role in expanding the firm’s European footprint, particularly through its London operations, according to his filings.
Between 2020 and 2024, Herzog made a series of internal disclosures relating to concerns about senior leadership, which now form part of his whistleblower case. He argues that documents he is seeking through the courts will support those claims.
During his time at the firm, Herzog was involved in several notable investments, including positions in German defence company Rheinmetall AG, where the firm invested ahead of a strong rally following Russia’s invasion of Ukraine.
Since departing Davidson Kempner, Herzog has begun managing capital through a new investment vehicle backed by his own funds, according to previous reports.
Founded in 1983, Davidson Kempner has grown from its merger arbitrage and distressed debt origins into a diversified multi-strategy platform under Yoseloff’s leadership, which began in 2020 following a leadership transition at the firm.
The legal proceedings are ongoing.
