Looking back on Passport's pulsating energy fund

By Rob Copeland

Tue Nov 27, 2012

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Absolute Return also revisits Arcadia's search for a new partner.


One year ago
>> Multistrategy fund Arcadia Capital Advisors began liquidating its positions and searching for new capital after the end of its capital contract with MD Sass-Macquarie Financial Strategies. "I'm talking to other players that might come and join us, so we might continue," founder Richard Rofe said at the time, giving a deadline of April 1, 2012, to secure new capital or shut down.

Rofe departed in March, according to his LinkedIn profile, and said in a telephone conversation this week that the firm is now being run by MD Sass. A representative for MD Sass, however, said the fund is no longer alive.

Regardless, Rofe has since taken an entirely new tack: In March, he became president and CEO of SeaMax America, the importer of a seaplane manufactured in Brazil. "We plan to reintroduce the only SLSA [amphibious seaplane] that you can actually buy and fly!" he wrote on the website. It wasn't the first large career shift for Rofe, who previously co-founded a chicken product brand called "Wow Wings." 

See also: Liquidations to yield asymmetric returns when properly handicapped - Octavian in liquidation

>> Absolute Return highlighted three funds up more than 20% for the year through the end of November 2011: The QIM Tactical Aggressive Fund, the Fort Global Diversified fund and the Chichester Commodities Fund

QIM has continued to roll, gaining 8.71% this year through the end of October, and Fort has also pushed forth, up 4.45%. Chichester, though, has hit a wall: Its commodities strategy is down 9.22% this year, almost twice as bad as the 5.53% drop for the Absolute Return Commodities Index.

Five years ago
>> John Burbank's then-$3.5 billion Passport Capital launched a $25 million energy hedge fund expanding on a component of its flagship global equity strategy.

The new fund, the Passport Energy Strategy, turned in a month of good performance before plunging in 2008, dropping 48.33% in what was admittedly not an easy year for energy funds (see full performance here). Now-managing $70 million, it had three subsequent positive years before falling steeply again this year; it is down 17.52% through the end of October.

Burbank's flagship fund (performance data here), which had a miserable 2011 that some investors blamed on over-hedging, has done much better in 2012. It gained 9.3% through the end of October, compared with a 5.28% rise for the Absolute Return Global Equity Index. That fund manages $1.3 billion, while the firm overall manages $3.3 billion, slightly down from five years ago.

Katrina Dean Allen, an external spokesman for Passport, declined to comment.

See also: Passport liquidates materials fund - Passport shakes up team

ISSN: 2151-1845 / CDC10004H