Woodbine Said to Return Cash After Missing Target

May 27, 2014 9:46 am ET

(Corrects name of consultant in fourth paragraph and name of firm in sixth in story that ran on May 24.)

May 24 (Bloomberg) -- Joshua Berkowitz, who started hedge- fund firm Woodbine Capital Advisors LP on the heels of producing a 121 percent gain as a trader for billionaire George Soros in 2008, is returning client money after failing to meet performance goals, a person briefed on the matter said.

The manager told clients in a letter yesterday that he will give back their capital at the end of the month, said the person, who asked not to be identified because the information is private. Todd Fogarty, a spokesman for New York-based Woodbine at Kekst & Co., declined to comment on the plans.

Berkowitz, 48, whose macro fund sought to profit from economic trends, said in the letter that his fund hadn’t produced the high returns that he had hoped to deliver, the person said. Woodbine, which Berkowitz started in 2008, has seen assets decline to about $400 million from a peak of $3 billion four years ago.

“They were the most disappointing fund that I had steered my clients to based on how he conveyed to me how he manages money and because of his reputation at that time,” said Vidak Radonjic of Beryl Consulting Group LLC in Jersey City, New Jersey. “He just wasn’t in tune with the markets.”

The hedge fund gained 15 percent from January 2009 through the end of last year, the person said. Macro hedge funds returned about 17 percent in the same period, according to data compiled by Bloomberg.

Berkowitz had a 33 percent annualized return while at Soros’s hedge-fund firm Soros Fund Management LLC, where he worked from 2005 to 2008, and for the first seven months at Woodbine, according to the firm’s marketing documents.

SAC, Goldman

The fund manager started trading at Woodbine in January 2009 with about $180 million after leaving Soros. He had previously worked at Steven A. Cohen’s SAC Capital Advisors LP and spent six years as a proprietary trader at Goldman Sachs Group Inc., according to the documents.

Woodbine said in a December letter that it was betting on Japanese equities, investing in financial and real estate stocks there. The Nikkei 225 Stock Average has lost 11 percent this year.

The firm also said it was betting on the dollar versus the yen, Canadian and Australian dollars and Turkish lira. The dollar has fallen about 3 percent against the yen.

Several other New York-based hedge-fund firms have shuttered in 2014. In January, Scout Capital Management LLC, the $6.7 billion firm run by James Crichton and Adam Weiss, said it was closing after 15 years following Weiss’s decision to step back from managing money for investors. The same month, Bob Karr’s $5.1 billion Joho Capital LLC said it was liquidating after 18 years so that Karr could focus on philanthropy.

About 296 hedge funds liquidated in the first quarter, the most since the first quarter of 2009, when there were 376, according to data from Hedge Fund Research Inc.