Hedge fund manager David Felman, who ran into trouble three years ago at Andor Capital Management, is shutting down his onetime $600 million fund.
Felman is in the final stages of "liquidating" his Phinity Capital fund, says an employee, who answered the phone Tuesday at the Fort Lee, N.J., shop. The employee, who declined to give his name, would not provide any more details.
A formal liquidation order for Phinity's offshore fund, which is registered in the Cayman Islands, was signed on Oct. 31. Felman, who could not be reached for comment, is listed as the fund's liquidator.
The hedge fund's chief financial officer, Anthony Armenio, left a recorded message on his phone line saying his last day was Oct. 31.
It's not clear why Phinity, which Felman opened for business in September 2004 with $120 million, is shutting down. The fund, which had a minimum investment requirement of $2 million, specialized in investing in health care, technology and financial stocks.
The fund, as of June 30, reported having positions in 13 stocks with a combined value of $336 million. But Phinity had more than $627 million invested in 43 stocks as recently as March 30.
Felman was a former rising star in the hedge fund world. In June 2001, he left mutual fund giant
, where he managed the firm's big mid-cap stock fund, to take a job at Andor, which at the time was an $8 billion fund
At Andor, Felman ran the hedge fund's Andor Diversified Growth Fund, which boasted more than $1.3 billion in assets. But in 2003, Felman's fund ran into trouble and lost more than 17% of its value. The big losses incurred by Felman crushed Andor's overall performance, as it lost its ranking as the nation's second-largest hedge fund.
In December 2003,
Andor cut Felman loose. Today, Andor has about $3 billion in assets under management. But less than year after leaving Andor, Felman had Phinity up and running.
Phinity was an investor in several well-known names including
, of which it owned 40,000 shares worth $16.7 million, and the
Chicago Mercantile Exchange
, of which it owned 50,000 shares worth $24.6 million.
The hedge fund also held 900,000 shares of the
Nasdaq Stock Market
worth $26.9 million and 185,000 shares of
worth $28.7 million.