Hedge fund White Elm to shut down, after posting double-digit returns

Hedge fund White Elm to shut down, after posting double-digit returns
Written by:
Andia Rispah
9th December 2019
  • White Elm Capital, a hedge fund, is returning money to the outside client at the end of the year.
  • White Elm is the latest in a growing number of hedge funds to shut down as raising and retaining capital and running a hedge fund is becoming ever more difficult.
  • White Elm's outside investors will get most of their money back by the end of January 2020.

White Elm Capital, a hedge fund, is returning money to the outside client at the end of the year. The 12-year run of picking stocks for pensions, endowment, and wealthy families comes to an end.

Mathew Iorio, its founder, wrote in a letter on Friday.

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Iorio, whose fund which is having one of its best years ever with a nearly 30% gain after fees, said now was the right time to end the fund.

He said the decision was “very difficult” but said he was “happy to be returning capital when we are performing at the top of our game.”

White Elm is the latest in a growing number of hedge funds to shut down as raising and retaining capital and running a hedge fund is becoming ever more difficult.

Last month Louis Bacon, one of the industry’s best-known managers, said he would stop investing outside money in his Moore Capital Management after 30 years in the business.

According to the letter, White Elm’s outside investors will get most of their money back by the end of January 2020. The letter also indicated that all current clients had earned money White Elm.

The hedge fund was launched in 2007 and traces its roots to Tiger Management- one of the industry’s most successful funds ever.

White Elm managed more than $1 billion in assets at its peak and has seen returns fluctuate.

According to a regulatory filing at the end of 2018, the firm oversaw $328 million in assets.

White Elm has had strong returns recently with gains averaging 15% a year as bets on financial and business services companies and technology firms paid off.

The hedge fund’s most recent regulatory filing shows that the firm owned stakes in TransDigm Group, Visa, Mastercard, and Autodesk at the end of September.

This year, the fund has gained 28.73% through the end of November, beating the average hedge fund’s 8.6% return, according to Hedge Fund Research data.

Iorio wrote that he wanted to deliver long-term returns that beat the broader market, and “we have achieved what we set out to do.”

Before opening his firm, Iorio, 49, worked at Lone Pine Capital, a hedge fund founded by Stephen Mandel, who got his start at Julian Robertson’s Tiger Management. White Elm is often called a Tiger Grand Cub.

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