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July 17, 2019  

Another Equity Manager Throws in the Towel

Kane Street Capital has ceased operations after nearly 10 years of trading.

The New York equity manager finished returning most, if not all, limited-partner capital in June. It had about $150 million of assets, on a gross basis, at yearend 2018.

The firm’s flagship vehicle, Kane Street Fund, began trading a concentrated portfolio of global stocks on Sept. 1 2009. By 2015, it was running a little more than $180 million, on a gross basis — a level it maintained for several years.

There’s no word on why managing partners Gal Harel and Matthew Prince called it quits. But like many other long/short equity managers, Kane Street struggled to stand out amid a steady climb in stock prices.

With a roughly flat return last year, Kane Street did manage to beat both a 4.4% decline in the S&P 500 Index and a 7.2% drop for the HFRI Equity Hedge (Total) Index. But the Kane Street Fund returned 6.1% in 2017, versus a 21.8% rise in the S&P and 13.3% gain for the HFRI index. Kane Street performed well early on, notching double-digit increases in four of its first seven years of trading. It had only one down year, 2011, when it lost 2.4%.

Prince was among the founding members of Kane Street, as was chief financial officer Alan Feder. Both previously worked together at private equity shop ZS Fund. Earlier, Prince worked at Angelo, Gordon & Co. and GEM Realty Capital.

Harel joined Kane Street in 2013.