Jon Berg, the U.S. chief executive at $7 billion hedge fund Vega Asset Management, is retiring.
Since there's no formal chief executive at the Madrid-based parent, Ravinder Mehra, Vega's chairman and chief investment officer and the investment brain of the organization, will now effectively run the company.
Berg's functions in the U.S. will be assumed by Michael Mann, currently global head of marketing for Vega. Mann said in a statement: "Jon is one of our industry's innovators, having grown Vega's operations not only in size but also in scope. He has helped us navigate some of the trickiest markets, always with an eye toward providing the best returns for our investors. ... He leaves our organization in a very strong and enviable position."
That the lead U.S. marketer will replace Berg as head of the U.S. business may point to Vega's effort to repair its image after a lackluster performance last year. The giant hedge fund started 2005 with $11 billion and ended it with $7 billion. Vega Select Opportunities Fund, a fund that invests in bonds, currencies and equity indices, had a negative performance of 9% last year. The global macro fund, Vega Global Fund, returned 1.5%. (Global macro strategies make bets using stocks, bonds or currencies, based on macro-economic views.)
Mehra, however, is considered one of the best hedge fund traders ever. He has reported just one down year in 26. In addition, Vega Select, despite its poor performance last year, has posted a 20% return since its inception in 2000. And Vega Global's performance was positive 9% since its inception in 1996.
Berg declined to comment other than to say in a statement: "This has been a great experience for me both personally and professionally, and I look forward to the next phase of my life." A person close to Vega said that Berg is not planning to launch a new fund but simply has personal plans to spend more time with his family and travel. Mann declined to comment.
While Berg's retirement is effective immediately, he will remain a consultant.
In a separate announcement today, Vega is expanding its seeding platform. The firm announced that it has obtained $1 billion of seed capital from BBVA, a Spanish-based financial services firm, for a new joint venture between BBVA and VegaPlus Capital Partners.
VegaPlus is a platform of hedge funds that Vega uses to develop and bring to the market emerging managers. VegaPlus acts in this capacity as an "incubator," a jargon term referring to the scouting and funding as well as the support of new hedge fund talent.
VegaPlus is a $2 billion hedge fund incubator with 10 hedge funds under its umbrella. One of VegaPlus' managers, Larry Seruma, who runs a long/short portfolio, returned 30% last year.
BBVA will take a 51% equity stake in the new venture, while Vega will hold 49% of the new entity.