London-based, event-driven hedge fund firm Samson Rock Capital is winding down a part of its $800m-plus portfolio run by co-founder Satpreet Brar, who is leaving the business, according to a report by Bloomberg.
The report cites an investor letter seen by Bloomberg as revealing that the firm is liquidating all its index rebalancing trades that made money by betting on stocks entering or exiting major indexes.
According to a the letter, the fund will now focus its investments on the mergers and acquisitions strategy run by co-founder Raphael Kain, while retaining a $40m allocation to a special situations fund.
Samson Rock joins a growing number of hedge fund firms including ExodusPoint Capital Management, Point72 Asset Management, Millennium, Management, Balyasny Asset Management, and Citadel, in exiting a trade that has struggled recently having been one of the most reliable I the past 20-plus years.
The strategy, which seeks to exploit the ‘index effect’, where stocks that are added to or deleted from major equity benchmarks subsequently rise or fall as passive funds with trillions of dollars in assets buy or sell to track the gauges, has been profitable for Samson Rock since it launched in 2019.
Last year the fund posted it’s best ever performance with a 13% gain, according to unnamed Bloomberg sources, although the fund is reportedly down 2% this year to the end of October.
