Paolo Pellegrini to return investor capital
By Josh Friedlander
Fri Aug 20, 2010
The Paulson protégé is stepping back from managing investor capital given challenging market conditions.
Paolo Pellegrini announced today that he will be returning
all outside investors’ capital in his global macro
firm PSQR Capital by the end of September, citing the
additional work necessary to profit from his bearish
The PSQR Master Fund was down about 11% through July 31. The
fund, which launched in April 2008 and opened to outside
investors in December 2009, had previously produced substantial
outperformance, having gained 40% in 2008 and 61.6% in
"While my views on global economies haven’t
changed, I’ve concluded that substantial
additional work is required to position the Fund to profit
consistently from those views," said Pellegrini in a letter
sent to his investors this morning.
All outside capital will be returned by September 30, the
letter said. Pellegrini plans to continue managing his own
capital in the fund, and wrote that if he reopens in the future
he will honor investors’ high-water marks. It was
unclear what would happen to PSQR’s staff. The
firm declined to comment.
Paolo Pellegrini is best known as the architect of the short
subprime bet while co-managing the credit opportunity funds at
John Paulson’s Paulson & Co. Pellegrini
foresaw the credit bubble as early as 2005 and worked to devise
the trades that turned Paulson into the fourth-largest hedge
fund firm in the country.
Paulson credit fund co-manager prepares his own fund
PSQR Hires Ex-Merrill Economist
Druckenmiller's final letter
ISSN: 2151-1845 / CDC10004H