Current news for this fund:

Cooper Hill Partners - CLSP Healthcare hedge funds


Count of distinct funds: 3
Capital base: $300M
Loss: about 10%

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We're posting this entry retroactively on Feb. 13, 2008. FinAlternatives has more on the state of the $300M worth of funds at Cooper Hill when they were closed last October:

Since inception more than 10 years ago, the firm’s funds have trounced the Nasdaq Biotech Index and the Russell 1000 Healthcare Index, with annualized returns of 26.1% through August. But 2007 has not been kind: Through Sept. 11, the firm’s CLSP, CLSP II and CLSP Overseas funds are down 10.9%, 10.8%, and 10.3% respectively year-to-date. All three funds are estimated to be down 1.5% in September.

The hedge fund world can be merciless: 10 years of 26% average returns, then down 10% and clients withdraw in droves. We're not sure how "hedged" this fund actually was—perhaps more modest returns in up years would have given investors more cause to stick around for a mild downturn. However we lack significant details (another being whether the three CLSP funds were the only ones shut down with the closure), so take that analysis with a grain of salt. Below is more from the same article on the circumstances of the implosion:

“Our poor performance this year generated significant withdrawals, with redemptions of roughly 15% of assets in the September quarter-end, constraining our ability to fund and execute on our fundamental investment ideas,” said Alexander Casdin, portfolio manager, in a letter to investors. “The decline in our assets has caused a significant strain on our infrastructure that was built for a much higher asset base. The volatility caused by our down performance combined with our heightened awareness of the funds’ quarterly liquidity detracted from our goal of finding and maintaining significant positions in winning multi-year ideas.”

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Important: This fund is on our list of hedge funds that have "imploded" (see also ailing lenders). However, please note that "imploded" is a somewhat subjective. The "imploded" list contains hedge funds (or other unregulated and autonomous speculative investment funds) which have gone through some sort of permanent adverse change. This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid mark-downs in net asset value; or abnormal "bail-out" by corporate parents or peers in order to avoid write-downs and provide liquidity. The funds are of any type and sector.