Moore Capital's Canadian Hedge-Fund Unit Lost 15% Last Month

Date: Wednesday, December 5, 2007
Author: Jenny Stratsburg, Bloomberg.com

Moore Capital Management Inc.'s Canadian hedge-fund unit, run by former Amaranth Advisors LLC traders, lost 15 percent in November on stock and convertible- bond bets, two people with knowledge of the firm said.

The Toronto-based unit, which managed $1 billion before the decline, opened a year ago to invest money for other Moore funds. It is overseen by Manos Vourkoutiotis, whom the New York- based firm hired after Amaranth collapsed in September 2006.

Moore, founded by Louis Bacon, has about $13 billion in assets. Its Moore Global Investment Fund Ltd., which invests in global stocks, bonds, currencies and commodities, declined 2 percent in November, trimming its 2007 gain to 15 percent. The benchmark Standard & Poor's 500 Index lost 4.2 percent last month, the most since December 2002.

``November was a tough month, but Moore will want to look closely to see whether the managers in Canada were taking too much risk,'' said Geoffrey Bobroff, an independent investment consultant in East Greenwich, Rhode Island, who isn't a Moore client. ``Assuming clients are invested in more than just this pool, they could be OK.''

The Canadian unit's returns had been mostly unchanged for the year through October, according to the people, who asked not to be named because Moore's investments are private. Moore Canada's loss compares with the industry's average decline of 2.4 percent in November, according to the HFRX Index, an estimate calculated daily by Chicago-based Hedge Fund Research Inc. based on a sample of fund managers.

John Lute, a spokesman for Vourkoutiotis in Toronto, declined to comment. Vourkoutiotis didn't respond to a call and e-mail seeking comment.

Amaranth Casualty

The 38-year-old trader joined Moore after Greenwich, Connecticut-based Amaranth lost a record $6.6 billion on bad natural-gas trades. Vourkoutiotis managed the firm's investments in Canadian debt, equities and derivatives for six years.

Bacon brought on the ex-Amaranth employees to trade a range of securities including distressed debt, convertible bonds and equities. They were hired to help Moore ``establish a significant, rewarding and long-term presence in Canada,'' Elaine Crocker, Moore's president, said in an October 2006 statement.

Vourkoutiotis was one of the first of Amaranth's senior executives to move on after the firm lost 70 percent of its money in two weeks on natural-gas bets overseen by trader Brian Hunter.

To contact the reporter on this story: Jenny Strasburg in New York at jstrasburg@bloomberg.net