Although Coffey’s primary fund was down roughly 2 percent on the year, the exact timing of his exit was ironic, given that it had risen 9 percent for the month of September, said the people familiar with the matter. A spokesman for Coffey said he was not available for an interview.Coffey, 41, has liquidated the primary fund he managed, GC Moore Emerging Macro, and returned some $100 million to investors, say people familiar with the matter. He has passed the reins of two other funds he managed to colleagues at Moore, the fund company he joined in 2008, these people said. In a letter to investors, Coffey attributed his departure to the demands of his growing family, according to someone familiar with the letter, saying that he could no longer commit to trading with the same intensity he once did.
Why Are Hedge Funds Becoming Less Profitable?
Charlie Morris, head of absolute return at HSBC Global Asset Management, tells CNBC, that the super normal profits of the hedge fund industry aren’t here to stay although the very good hedge funds will continue to do well.
Coffey, an Australia native, joined Moore amid much fanfare in 2008. Considered a wunderkind on the London hedge-fund scene, he had reportedly generated returns of 60 percent in 2006 and 51 percent in 2007 at his prior firm, the London money manager GLG Partners, where he managed billions of dollars. Upon hiring Coffey, Louis Bacon, the secretive founder and chief executive of Moore, rewarded him with a significant title – co-chief investment officer of the European business. (Read More: A Secretive Hedge Fund Legend Prepares to Surface)
It was a signal moment for Bacon, himself an actively engaged strategist and trader who had never before telegraphed a clear succession plan. When Bacon’s longtime lieutenant Christopher Pia left Moore late in 2008 amid a regulatory probe into metals trading, Coffey was increasingly regarded as the heir apparent. But he never delivered on the returns, say people familiar with Coffey’s results, and former Moore employees say Coffey’s brash personality at times rankled colleagues.
Late last year, Coffey undertook a partial spin-out of Moore, renaming his main fund GC Moore Emerging Macro to differentiate it as a joint venture with the fund company. Although he still had capital from Moore, he also began taking in third-party investments. He remained a Moore employee. (Read More: For Hedge Funds, a Half Percent Is the New Move)
Some hedge-fund investors and Moore insiders regarded the move as a push out the door for Coffey, but Bacon was adamant in his support for the trader. In a letter distributed to Moore investors last November, Bacon called Coffey “steadfast” in his “efforts…to grow and succeed in their business at Moore.” He also noted that “turbulent markets” had been a challenge to navigate.
In his own letter to investors this week, Coffey expressed a desire to spend more time with his wife, children, and his home country, Australia.
Contributed by Kate Kelly to CNBC