Former Giant Stark Investments Closing Shop

April 14, 2013 James Heinsman Hedge Fund News

After twenty years of managing other people’s money, the one-time mega firm, Stark Investments, is winding down its operations and getting out of the money-management business.

The financial crisis, recession, client redemptions and other influences have convinced the managers at this Wisconsin-based hedge fund that closing down is a better answer than continuing to flounder. At its best Stark had over 400 people on salary and managed over $14 billion in assets. At the end of 2012 only 50 employees were left managing a mere $2.1 billion worth of funds.

Closing shop will not be instantaneous. At a recent filing with the Securities and Exchange Commission Stark said it intends on closing down all of its funds except for one, and would let-go even more of its staff. Stark expects the ‘winding down’ to take a bit of time because the assets the funds control are “primarily illiquid, hard-to-value securities/assets,” according to Stark’s filing statement.

Every dark cloud has a silver lining. One former senior partner from Stark, Michael Keough, launched a new hedge fund company in March with over $40 million in assets called Racon Capital Partners. Other former employees of Stark have been hired by local financial companies, including Artisan Partners, Heartland Advisors and U.S. Bank.

“There are a lot of smart people from Stark who are going to go out and work for other funds or start their own funds, and there will be successes that come out of these spinoff firms,” said Matt Rose, a consultant at the Alpha Investment Consulting Group in Milwaukee.

Alpha Investmetn Consulting Group, Matt Rose, Michael Keough, Racon Capital Partners, SEC,

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