Friday 15 December 2017

O'Shea's hedge fund takes a hit in Swiss franc move

Colm O'Shea was listed as the 21st highest paid hedge fund manager in the world in 2012 by Forbes magazine
Colm O'Shea was listed as the 21st highest paid hedge fund manager in the world in 2012 by Forbes magazine
Nick Webb

Nick Webb

At least one wealthy Irish investor was whacked by the soaring Swiss franc.

Kerry's Colm O'Shea was listed as the 21st highest paid hedge fund manager in the world in 2012 by Forbes magazine.

It estimated that he'd earned $100m that year as his Mayfair investment house Comac Capital generated returns of 5pc in 2011 as assets under management rose to $5bn.

O'Shea, who'd worked with legendary investor George Soros, had made a fortune betting on US sub-primes as well as the US economy in the financial crisis. In 2008, he made a staggering 31pc for his backers in a year when most funds were splattered by the financial crisis.

However, since then, things haven't been quite so terrific.

The 'black swan' decision by the Swiss National Bank (to end the Swiss franc's cap against the euro) saw the Swiss franc suck helium and float through the roof. Comac was caught out and left without trousers.

It is believed the hedge fund incurred losses of 8 per cent bringing total losses in January to 10pc. O'Shea and his hedge fund have decided to return investor cash.

Comac is not the only hedge fund to have been hit by the Swiss franc, with Everest and Bluecrest also reported to have suffered.

O'Shea isn't closing the flagship fund, but it is now concentrating on managing $150m of "internal capital" - in other words, its own money and that of its partners.

At its peak Comac managed around $5bn in its flagship fund in 2012 but most recent estimates put the funds under management in its key Global Macro fund somewhere closer to $1.2bn just over two year later.

Compared to its peers the returns generated by Comac were weak. In 2012, the Global Macro fund dropped 9pc, with returns in 2013 and 2014 flat.

Cambridge educated O'Shea is well insulated. Just over €20m was divvied up between O'Shea and other "members" of the hedge fund partnership in 2014, with one person - presumably O'Shea - netting €3.46m.

That's well shy of some of the boomtime windfalls. In 2009, the top earner in the partnership received €85m and another €42m the following year.

The media-shy O'Shea rarely says much. Apart from this pearl: "Those who like trading because they like gambling are going to be terrible at it."

William Fry poaching partners from rivals

New William Fry managing partner Bryan Bourke has got his cheque book out. Fry, which has acted for some of the biggest names in town, is bulking up.

Over the last year, it has hired tax partner Ted McGrath from KPMG, with Shane Wallace joining from Deloitte. Senior corporate partner Eavan Saunders was also lured back to Ireland from leading international law firm Ashurst. William Fry also nabbed aircraft financing partner David Maughan from Maples and Calder as it noses more into the lucrative aviation leasing space.

"We are delighted with the growth seen across the firm over the last 12 months and we're confident we have attracted some of the most talented professionals to William Fry," Bourke said last week.

"The firm is in growth for 2015 and we will continue to seek out those individuals whose expertise matches our business needs."

High-level movement between the major legal and accountancy firms is rare, especially among partners.

Last year, Arthur Cox partner Conor O'Dwyer moved to rival group McCann Fitzgerald, where he joined the corporate practice.

This latest hiring round may lead to the start of some more musical chairs at the principal firms as gaps get filled.

 

 

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