Dan Waters and Mike Kelly’s FrontPoint Partners to wind down majority of hedge funds

May 23rd, 2011
| More
FrontPoint Partners, the hedge fund rocked by an insider trading scandal in November 2010, has announced that it will be winding down the majority of its funds due to investor redemption requests. According to an article on NY Times Dealbook, the firm was at the center of a major insider trading investigation due to the actions of portfolio manager Joseph F. Skowron, who ran the health care portfolio at FrontPoint. Mr. Skowron allegedly paid cash to a French doctor for insider information on clinical drug trials.

FrontPoint Partners made efforts to reassure investors, including terminating the entire healthcare team. However, investors still withdrew over $3.5 billion, about half of the hedge fund’s assets under management at that time. Steve Eisman, a star portfolio manager at FrontPoint known for profiting handsomely from calls made during the financial crisis, also announced he was considering leaving the firm due to backlash from the firm’s scandal in his own funds.

FrontPoint recently raised over $1 billion for a midsize lending fund, which will remain open. The hedge fund has stated that it will not be going out of business, and co-Chief Executive Officers Dan Waters and Mike Kelly recently announced they had bought back majority ownership from Morgan Stanley.
For Detailed Investor Profiles on these Investors, click below:
FrontPoint Partners
Related People: Daniel Waters; Gil Caffray*; James G. Webb; Michael John Kelly; Paul Ghaffari*; Philip Duff*
Related Entities: FrontPoint Consumer and Industrials; FrontPoint Financial Services; FrontPoint Healthcare; FrontPoint Quantitative Macro; FrontPoint Volatility Opportunities; Morgan Stanley Investment Management
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Hedge Fund Launches and Hedge Fund Closings

More Recent Headlines

Steven Cohen’s SAC Capital Management to start Quantitative Trading hedge fund

The Vultures are Circling Around the Euro

Bill Hwang’s Tiger Asia down 16% YTD

Timing is everything, Munib Islam Returns to Daniel Loeb’s Third Point Partners

OakTree Capital Management to go public on NYSE

Convexity Capital suffers “Disappointing” First Quarter

Carl Icahn sees large returns on Biogen Idec and Genzyme bets

John Paulson set to earn up to 78% return on investment in Lehman Brothers bonds

Daniel Chan, Former Citi Portfolio Manager, Launches Emerald Orient Investment Advisor with $25M

Renaissance Technologies’ troubled hedge funds experience Resurgence in 2011