Louis Moore Bacon built Moore Capital Management LLC into one of the biggest and most successful hedge funds over more than two decades. His record investing in new firms run by former traders is less stellar.
Salute Capital Management, run by Lev Mikheev, is the third hedge fund backed by Moore and run by one of his ex-traders to liquidate in the past four months. Mr. Mikheev returned to Moore two weeks ago after his 2-year-old fund lost 11% last year, said a person with knowledge of the matter, asking not to be named because the information is private.
Mr. Bacon, whose New York-based firm oversees about $15 billion, invests client and partner money in former employees' startup hedge funds and is often their biggest backer. The faltering spinoffs show that once-successful traders don't always flourish running their own hedge funds, just as a half-dozen alumni from Goldman Sachs Group Inc. have struggled to make money for clients since striking out on their own.
“You often see traders not functioning as well as they did in their old jobs, where they had the benefit of top-down input from senior people,” said Daniel Celeghin, a partner at money manager consultant Casey Quirk & Associates LLC, Darien, Conn. “Being able to run a portfolio well is not the same as running a business well.”
William Tung and Tim Leslie also have told clients they were liquidating funds they started after leaving Moore.
Mr. Mikheev, who managed about $300 million at Salute Capital, rejoined Moore's business in London as a portfolio manager.