I hope they had an exorcism
Fluttering through NakedShorts’ email box recently, a summary information sheet for the WR Multi-Strategy Fund, brought to you by the fine folks at WR Capital Mgt LP, resident at 40 Signal Rd in lovely Scamford, Conn. 40 Signal Road?
Writ much larger, of course, as the former mostly-monkey business address of the Bayou family (which still awaits sentencing).
And, it seems the new business home of—Welcome back!—Christopher H. Rose, chief operating officer of the “next generation multi-manager fund of funds combining the strengths of a fund of funds in a managed account platform with active risk management…to maintain a market neutral exposure in all market environments.”
Rose was chief operating officer at another sort-of “next generation multi-manager fund of funds combining the strengths of a fund of funds in a managed account platform,” or words to that effect: MinusFunds. Where he was far from alone in not noticing that $300 million-odd invested in the SPhinX managed futures funds had wandered off to Refco Capital Markets. Until it was rather too late.
But apart from that, the document is a due diligence goldmine. Featuring:
- Walter Raquet, chief executive officer and the WR in the fund’s name, from 1994-2002 “founder, executive vice president and director” of the then long Lancelot, short Galahad, Knight Trading Group. The very same Knight that coughed up $80 million in fines and disgorgement to settle—without admitting or denying—a diversified portfolio of violations, said to have occurred in 1999-2002, centered around wealth transfers by less than chivalrous, if hardly unique, methods. Raquet was not named in the action.
- John Cunningham, WR Capital’s president, “from 2000 to 2003…senior vice president and the financial and operations principal of Knight Securities LP and Knight Capital Markets,” also not named in the action.
- An entirely new investment concept called ‘business alpha,’ apparently a combination of “significant leverage at little cost…efficient financing and management of short rebates (More leverage-Ed) [and]…lower execution cost.” Not to mention:
- Year-to-date performance, through Apr. 13, of 10.35 percent, certainly a creditable return for a fund that is “market neutral with respect to broad equity indices,” invested in un-named sub-advisors including stat arb, multi-factor models, active long-short and value. Probably all that business alpha working its magic.
Coincidentally, WR Capital Management appears to share its principals and business address with HF Access LLC, which offers “a hedge fund investment platform whereby investors can invest in a selection of hedge fund strategies and investments will be made through separately managed accounts.”
Too much information:
WR Multi-Strategy Fund summary information sheet
(Pending the arrival of a polite, but doubtless firm, missive from WR Management’s counsel, Messrs Schulte Roth & Zabel LLP, warning of the imminent arrival at NakedShorts’ door of at least three apocalyptic horsemen should be document not be removed NOW!)
MinusFunds’ coverage on NakedShorts
US Securities and Exchange Commission
In the Matter of Knight Securities LP
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