11/09/2011

Despite Turnover, Talpion Nets Big Backer

A large institutional investor is set to park $150 million with Talpion Fund Management, an equity-focused shop headed by former Highbridge Capital honcho Henry Swieca.

The investment, teed up for the Nov. 15 subscription period, would be followed by another $50 million — half due before yearend and half next year. Together, the commitments would boost Talpion’s assets under management to more than $600 million, from about $425 million now.

The inflows are notable for several reasons, starting with the fact that the New York firm has yet to conduct a formal marketing campaign. What’s more, Swieca seems to have gained the trust of an institutional backer despite heavy staff turnover in recent months. When Swieca began converting Talpion from a family office into a hedge fund manager late last year, he embarked on an aggressive hiring spree that boosted headcount to about 35. But a combination of layoffs and resignations has cut the roster by 7-8 staffers.

The turnover has led to speculation that Swieca may be having second thoughts about starting a hedge fund business. But a person familiar with his thinking said he’s committed to rebuilding Talpion’s staff and raising additional capital. Indeed, the firm is currently looking to fill its first in-house marketing position.

In the meantime, large investors apparently are willing to invest with Talpion on the strength of Swieca’s reputation. Highbridge, a J.P. Morgan subsidiary that is among the world’s largest hedge fund operators, was founded in 1992 by Swieca and Glen Dubin. They sold a controlling stake to the bank in 2004 with the expectation that they’d both stay on board for at least five years. Dubin continues to run the operation.

Talpion’s debut hedge fund, Talpion Equity Partners, takes a fundamental, research-driven approach to investing in mid- and large-cap stocks, among other securities. The fund was up 2% for the first 10 months of this year, compared to a 1.3% gain for the S&P 500 index.

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