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September 26, 2018  

Partner Conflict Topples Profitable Fund

A rift between the two partners of Arrow Ridge Capital is forcing the TPG Capital-backed hedge fund to shut down, despite solid returns.

Vikram Arora and Andy Shah, who launched San Francisco-based Arrow Ridge in late 2016, found themselves unable to reconcile after clashing over the fund’s investment approach. The firm is working to return capital to investors as quickly as possible, a TPG spokesman said in a statement to Hedge Fund Alert. It is believed that Arrow recently was trading about $130 million.

The disbanding of the partnership came as Arrow Ridge was outpacing the market in late summer, with a year-to-date gain of 17%. The firm, which also was up substantially in 2017, invested in shares of U.S. technology and consumer companies.

TPG, a major buyout firm based in Fort Worth, Texas, provided Arrow Ridge’s founders with startup capital and operational support.

Before launching Arrow Ridge, Arora and Shaw worked together for about five years at Sequoia Capital Global Equities, a stock-trading arm of venture capital giant Sequoia Capital. But Arora and Shaw reached a point where they simply couldn’t work together anymore, according to TPG.

“The co-founders of Arrow Ridge have decided to part ways and, as a result, will be unwinding the fund,” TPG said. “Despite strong performance, the co-founders expressed differences of opinion in the execution of the fund’s style and strategy, and determined it was in the best interest of its investors to wind down operations. As such, we will be seeking to return capital to investors as quickly and efficiently as possible. We wish Vikram and Andy the best in their future endeavors.”

Before joining Sequoia, Arora was an investment analyst at Coatue Management, and before that worked at TPG from 2007 to 2009. Shah had been employed at Google and previously worked at financial consultancy Oliver Wyman. Also on board at Arrow Ridge was chief financial officer Alicia Gavello, who earlier worked at Point Lobos Capital and Partner Fund Management.