Cantillon Capital Management will shut two funds with a combined $1.35bn (€1.05bn) of assets because it cannot see how they can make money, Financial News reported.
New-York based Cantillon, set up by former Lazard hedge fund manager William Von Mueffling, “told investors it would close its $1bn technology and $350m healthcare funds, raising questions over high valuations in the two sectors,” the article said.
“For Cantillon to manage a fund, the investment universe must give us the opportunity to achieve annualised returns of at least 15%, net of all fees,” Cantillion said in a statement. “It may be difficult to achieve an acceptable rate of return for either of these products without taking a significant market risk.”
The Cantillon manager found it increasingly difficult to find companies whose share price he did not consider overvalued, Financial News said. Cantillon could not find enough shorts to properly implement its investment philosophy.
“This is a fascinating indicator that there are too many market participants (active Hedge Funds) all with the same strategies. No wonder Hedge Fund returns are so poor,” opines FinTag.