Attalus Capital LP will exit the hedge funds-of-funds business at the end of the year and move into managing single-strategy hedge funds.
Patrick C. Egan, founder, president and CEO, said Attalus has been building investment teams for the past two years that manage a spectrum of single-strategy hedge funds. To date, strategies include exotic beta, inflation protection and tail-risk hedging.
All of the firm's hedge funds-of-funds staffers will have left the firm by the end of the year, Mr. Egan said; existing funds-of-funds clients will be encouraged to move their assets into the firm's other strategies.
The company has managed hedge funds of funds since its inception in 1998. Assets in those funds rose to a peak of $2.7 billion at the end of 2011, totaled $1.1 billion as of June 30, and fell to $800 million as of Nov. 1.
Attalus has been weathering a spate of terminations over the past year or two, including the $1.8 billion Oklahoma Police Pension & Retirement Plan, which had invested $73 million with Attalus, and the $1.6 billion Oklahoma Firefighters Pension and Retirement System, which invested $52 million. Both funds are in Oklahoma City.
This isn't the first time Philadelphia-based Attalus has switched gears. The firm got out of the private equity business at the end of 2006, when Mr. Egan told Pensions & Investments that private equity was not a successful strategy for the firm.
This article originally appeared in the November 26, 2012 print issue as, "Attalus Capital shifting gears to single-strategy hedge funds".