Despite continuing to grind out positive returns, both talent and assets departed from Carlson last year
Having suffered a heavy loss of talent, mediocre returns and massive redemptions, Carlson Capital is now picking up the pieces. The firm brought in the big guns of McKinsey & Co. to revamp the management structure and make compensation more egalitarian, but some investors wonder if what they perceive to be a major problem remains unchanged: the strategy.
Carlson's travails look like a story of personnel issues run amok, for there is no better explanation for the firm's recent struggles. "How do you lose so many investors when you've never, in a full year, lost money?" asks one competing manager. The answer is that smart money does not take kindly to multiple defections.
Twelve-year-old multistrategy shop Carlson Capital held $4.7 billion in assets under management at year-end 2004 but suffered heavy redemptions...