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Blackstone seeded hedge fund Sureview Capital shuts down: sources

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[June 07, 2014]  By Svea Herbst-Bayliss
 
 BOSTON (Reuters) - Sureview Capital, a small hedge fund which received starting capital from one of the industry's most powerful investors, Blackstone Group, shut down last month, people familiar with the matter said on Friday.

The fund was founded by John Wu with seed money from Blackstone Alternative Asset Management in 2011 and last reported assets of $427 million on a regulatory filing.

At the end of the first quarter Sureview, which specialized in picking stocks, listed CBS Corp as its biggest position and said it owned shares in Yahoo Inc and Facebook Inc, all of which suffered losses in March and early April. Sureview, based in Greenwich, Connecticut, did not respond to phone calls seeking comment.

The industry sources requested anonymity because hedge funds are private.

When it launched, Sureview was viewed as a potential new heavy hitter in the $2.7 trillion industry, not only because of Wu's resume, which included working at Kingdon Capital and Tiger Management before that, but more importantly because of Blackstone's seal of approval.

Considered one of the industry's savviest investors, Blackstone invests roughly $55 billion in hedge funds and has raised more than $2 billion for its two so-called seeding funds, which help get new fund managers started. Competition for a piece of those assets, usually distributed in $100 million to $150 million chunks, was fierce, fund managers familiar with the selection process have said. Blackstone has seeded fewer than 20 new hedge fund managers.

Industry analysts have said it is generally expected that not every manager in a seeding fund will mature and that some will shut down.

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Wu had a tough start in 2011 but returns were strong in 2013. This year, the fund struggled during the first quarter, the people familiar with the fund and its performance said.

Running a hedge fund has been especially difficult recently with the industry's performance paling in comparison to the broader stock market.

Hedge funds lost money in April and March, and are up only 1.71 percent in the first five months of this year, according to data from Hedge Fund Research.

(Reporting by Svea Herbst-Bayliss; Editing by Richard Chang)

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