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April 10, 2019  

Field Street Shutters Fund, Lowers Headcount

Global-macro heavyweight Field Street Capital has liquidated a fund that suffered crippling losses last year.

The New York firm, founded in 2007 by former Lehman Brothers executive Rod Gancas, finished returning investor capital from its Field Street Global Investments fund in the last several months. The vehicle had about $220 million under management at the start of 2018, but lost half its value in May due to a wrong-way bet on Italian debt.

The wind-down leaves the firm with just one other vehicle: the flagship Field Street Partners, which had about $4 billion under management a year ago. The firm’s headcount, meanwhile, has shrunk by about a third in the past year or so.

Field Street is among the most highly leveraged firms in the industry, with gross assets of $73.6 billion as of Feb. 28 — down from $93 billion at yearend 2017. It’s unclear whether the decrease was the result of redemptions, investment losses, reduced leverage or some combination of those factors.

Field Street Global Investments was holding a sizable long position in Italian debt when fresh concerns about the country’s political stability sent bond values plummeting in May 2018. The fund, which employed leverage of about nine times equity capital, lost 15% in the first three weeks of the month, then fell even more precipitously — for a one-month loss of 50%, Bloomberg reported.

At the same time, a number of other prominent global-macro shops including Brevan Howard Asset Management and Element Capital booked hefty profits in May because they had been short Italian debt.

Field Street’s professional staff has shrunk from 60 in the first quarter of 2018 to less than 40 today. Among the latest departures: client-relations manager Jesse Silver, who has since joined Mariner Investment; portfolio manager Kevin Breen, now working at Citadel; and portfolio manager Jayraj Chokshi, now at Brevan Howard. Fixed-income strategist Benjamin Martens, rate-product trader Maximilian Niddam and research head Boris Senderovich also have left in recent months.