12/07/2011

Duma Deja Vu: Walji Unwinding Firm — Again

For the second time in two years, Nadeem Walji has closed the doors of his fund shop.

In 2009, the Duquesne Capital alumnus pulled the plug on his Duma Capital Partners, a once-$500 million multi-strategy firm that got walloped by financial-crisis redemptions. Now, Walji is unwinding Duma Capital Management, a $100 million global-macro operation he launched with backing from Atticus Capital founder Timothy Barakett.

As of late last month, Walji’s new firm was on track to return $90 million of investor capital from Duma Liquid Opportunities Fund, with the remaining $10 million held back pending an audit.

What happened? Apparently, Walji feared he couldn’t grow the firm quickly enough to attract the kind of investment talent he wanted. “The management came to the conclusion that it would be most prudent to return all capital as soon as possible so that Duma’s investors may reallocate for 2012,” said Duma spokesman Konstantin Shishkin.

Before starting his own business, Walji managed money first at Soros Fund Management and then at Duquesne under Stanley Druckenmiller, himself a Soros alumnus. Walji was a star trader and partner at Duquesne, where he ran more than $500 million.

In 2005, he founded Duma Capital Partners, whose flagship fund delivered returns of 7.7% in 2006, 22.8% in 2007 and 6.2% in 2008 — a year when the average hedge fund lost 19%. Despite the strong performance, liquidity-strapped investors barraged Duma with redemption requests in late 2008 and early 2009, whittling assets under management to about $100 million.

Even as he was unwinding the original Duma, Walji told investors he planned to launch a successor vehicle. After managing his own money for a while, he began trading the global-macro fund in late 2010 on behalf of a few associates. The vehicle officially launched in April with seed money from Barakett, who had shuttered his once-$20 billion fund operation in 2009 to focus on family and philanthropic interests.

Back Print