Opalesque Industry Update - Steve Eisman, who ran the biggest hedge fund at FrontPoint Partners, is leaving after the ailing hedge fund firm announced the closure of most of its portfolios, including a fund run by Eisman, various media reports said citing several sources.|
According to the Wall Street Journal, Eisman indicated as early as January his willingness to leave FrontPoint and has even started talking with potential investors about managing their money.
FrontPoint has decided to close some of its strategies after massive redemptions rolled in during the past months as investors have expressed their reaction to one of the firm’s now-former traders being accused of insider trading. The company has not been accused of any wrongdoing and pledge cooperation with the ongoing probe.
A separate report by CNBC has identified FrontPoint's one-time health-care portfolio manager Joseph "Chip" Skowron, as the manager who is currently facing charges of insider trading. He was arrested by authorities and was charged with paying off a doctor in exchange for illegal tips on drug trials.
Since May, FrontPoint has received redemption requests from investors, forcing the company to wind down most of its funds keeping only the FrontPoint Quant Macro Fund, the FrontPoint Strategic Credit Fund, the FrontPoint Rockbay Fund and the recently launched FrontPoint Direct Lending funds open.
Known for his big bets against subprime mortgages and for-profit colleges, Eisman has managed about $1.3bn at FrontPoint since joining the firm in 2004.
The Journal said a spokeswoman for Eisman has refused to comment on the report.