It was Albert W. Hsu who pushed Anchor Point Capital Management LLC into the limelight when he was arrested and charged with allegedly trying to have his ex-mistress kidnapped and sexually assaulted. But it will be Timothy J. Crowe who saves the fledgling hedge fund-of-funds manager if he can.
Mr. Hsu, the firms chief investment officer, managing director and co-founder, was arrested on March 2 at his home in New Caanan, Conn. He did not enter a plea at his arraignment on March 5 in Norwalk (Conn.) Superior Court, said Cindy Dillon, deputy court clerk. His case was continued until March 23 and moved to Stamford Superior Court from Norwalk.
At press time, Mr. Hsu remained incarcerated at Bridgeport Correctional Center. He could not be reached for comment.
Robert S. Bello, an attorney with Bello Lapine & Cassone LLP, Stamford, Conn., who is representing Mr. Hsu, declined to comment. The phone was not being answered at Mr. Hsus New Canaan home.
Industry sources agree that Mr. Crowe, Anchor Points managing director, chief executive officer and co-founder, seems up to the task of saving the young, Coral Gables, Fla.-based firm.
Mr. Crowe did not return repeated calls seeking comment about the Hsu arrest or the future of Anchor Point. Mr. Crowes son, Matthew Crowe, the firms manager of investor relations, also did not return repeated phone calls.
No longer with the firm
In a letter dated March 7 and obtained by Pensions & Investments, Mr. Crowe told clients that Mr. Hsu was no longer employed by the firm. He said Anchor Point employees were shocked and deeply saddened by the recent legal problems that have befallen Albert Hsu and that he has not had contact with Mr. Hsu or his attorney since the arrest. Mr. Crowe also said in the letter that Anchor Point clients as well as consultants and friends have all been contacted and to a person, each has been very supportive and encouraged us to persevere through this challenging period. We intend to do so.
Sources said Mr. Crowes long investment experience as a foundation manager might end up being Anchor Points saving grace.
Messrs. Crowe and Hsu founded Anchor Point in mid-2005. Mr. Crowe spent 15 years at the Miami-based John S. and James L. Knight Foundation. He retired from the then-$1.9 billion foundation as vice president and CIO early in 2005, along with many members of his nine-member in-house investment staff.
Mr. Hsu left his position as U.S. investment officer of the then-$3 billion Atlantic Philanthropies, New York. He had also worked at the Ludwig Institute for Cancer Research, New York; at Xerox Corp., Stamford, Conn.; and Common Fund, Westport, Conn.
Its difficult to learn much about Anchor Point Capital. The firm does not have a website. Anchor Point does not report data for P&Is manager surveys; it is not registered with the Securities and Exchange Commission as an investment adviser; it does not report information about its funds to major industry hedge fund databases.
Press reports and industry sources estimate Anchor Points assets under management to be several hundred million dollars.
According to 13-F SEC filings, the firm manages an onshore and an offshore version of the Anchor Point Capital Flagship Fund and the Anchor Point Capital Global Macro Fund. A source with knowledge of the firm said the offshore version of the Flagship Fund has returned 12% since inception in January 2006.
One source, who asked not to be named, said Mr. Crowe is considered a thoughtful and credible investor, but we thought it was odd that they (Messrs. Crowe and Hsu) had ever gotten together. We did not know Albert well, but Mr. Crowe was well thought of and that was what drew us to take a closer look.
Jay A. Yoder heads a similarly young specialist asset management firm, Tuckerbrook Alternative Investments LLC in Marblehead, Mass., which has $95 million in assets under management. Questions about the firms stability are among those most often asked by prospective clients, Mr. Yoder said.
Its a question we are asked all the time, and its one thats very important to institutional investors. When I was managing (endowment) assets, I preferred to invest with people I had known for years or based on referrals from people I had known for years, Mr. Yoder said.
Mr. Yoder said Mr. Crowes extensive investment experience, his long stint as a CIO and his successful track record at Knight will help them survive. Anchor Point was not a one-man shop. It was a two-man shop. And one thing in their favor is that they are managing a portfolio of hedge funds, not securities, so there are not really day-to-day investment responsibilities.
But Mr. Yoder warned that bearing responsibility for both the investment management and administration of any firm is difficult. Tim and Anchor Point can survive doing this short term. But these both are full-time jobs, requiring different skill sets. They probably will need to recruit either a CEO or a CIO.
Mr. Yoder and hedge fund-of-funds managers agreed that while operational stability and so-called key-man risk the risk of losing a critical employee or team are most often thought of in relation to individual hedge funds, they also are extremely important issues for institutional investors in funds of funds.
Key-person risk is something that alternatives fund-of-funds manager Strategic Investment Group is constantly being assessed on, said Deborah Boedicker, principal. The Arlington, Va.-based firm is 20 years old, but questions from institutions about operational stability and succession planning, should something happen to President and CEO Hilda Ochoa-Brillembourg, remain standard.
We all came out from a plan sponsor culture, and that fiduciary responsibility is something were accustomed to, Ms. Boedicker said.