08/11/2010

After Dip, Winton Capital Resumes Climb

After losing investors in droves during the financial crisis, commodities giant Winton Capital is in growth mode once again.

Some 300 investors pulled out more than $3 billion in 2008, though not because of performance concerns. Indeed, the London firm's flagship Winton Futures Fund gained 21% that year, while the average hedge fund fell 19%. Instead, redemptions were driven by the so-called "ATM effect" - that is, cash-starved investors tapping relatively liquid strategies such as commodities as if withdrawing from a bank ATM.

The withdrawals dropped Winton's assets under management to around $13 billion in mid-2009, from a peak of $16 billion the year before. But during the past year, an aggressive fund-raising campaign has added about $400 million to Winton Futures Fund. The vehicle now has $4.6 billion under management, down from its 2008 peak of $7 billion. The firm's overall assets stand around $13.5 billion, including managed accounts.

In terms of investor headcount, Winton dropped from about 1,100 limited partners in 2008 to 800 by early 2009. Since then, the firm has added about 100 new investors.

The firm's fund-raising success is attributable to several factors, beginning with performance. While most commodity managers have been whipsawed by the market's volatility this year - with some suffering double-digit losses - Winton Futures Fund was up 3.8% through July 31. The fund fell 4.6% last year. David Harding, who founded the firm in 1997, remains "one of the all-time darlings" among commodity-trading advisors, one investor said.

Indeed, a few investors said they were concerned the firm might grow too large to navigate the choppy market conditions.

Using systematic-trading programs, Winton invests about 30% of its capital in commodity futures and the rest in a broad array of futures instruments. The firm trades in more than 100 commodity- and financial-futures markets around the world.

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