Ladies and gentlemen, today we gather to discuss a chapter in the financial world that often goes unnoticed—the closure of a hedge fund.
Orkun Kilic, the visionary behind Berry Street Capital Management, has made the difficult decision to close the doors of his London-based hedge fund, marking the end of a four-year journey filled with challenges and triumphs.
Berry Street Capital Management, which once boasted over $900 million in assets under management, has faced headwinds in 2023, posting losses of 4.2% in the first nine months of the year.
Kilic’s decision to shutter the fund came as assets under management dwindled to $575 million.
It’s a testament to the volatility and unpredictability that can define the world of hedge funds.
For those unfamiliar with Orkun Kilic, he is no stranger to the financial world.
A former partner at Paulson Europe LLP and a Morgan Stanley alum, he founded Berry Street Capital in 2019 with an initial backing of over $400 million from Schonfeld Strategic
Advisors and Partners Capital.
His vision was clear: to navigate the event-driven strategy landscape and generate returns for his investors.
However, as Kilic candidly points out, the investment landscape has become increasingly challenging.
Rising interest rates and regulatory uncertainties have cast a shadow over the traditional strategies that once fueled success.
Event-driven strategies, which thrive on corporate events like mergers, bankruptcies, and takeovers, have felt the squeeze as regulators intensify antitrust efforts.
The story of Berry Street Capital Management is not unique.
Hedge funds across the globe are feeling the impact of these changing dynamics.
Many have had to rethink their playbooks, unwinding positions that no longer align with the new reality.
They’re focusing more on trading spreads as deal prospects ebb and flow or taking a more cautious approach to scaling their wagers.
Partners Capital, once a supporter of Kilic’s fund, had already parted ways by the time the decision to close was made—a stark reminder of the challenges faced by even well-established funds in today’s climate.
In Kilic’s own words, “The current investment landscape is simultaneously constrained by rising rates and regulatory uncertainty and not conducive to achieving the risk-adjusted returns that we used to generate.
The right thing to do is to return capital to our investors.” It’s a difficult but responsible choice, highlighting his commitment to the well-being of his investors.
As we bid farewell to Berry Street Capital Management, let this be a reminder that the financial world is ever-evolving.
Strategies that once thrived may no longer hold their magic.
Adaptability and a keen eye for changing winds are the hallmarks of successful investors.
Orkun Kilic’s journey with Berry Street Capital may be ending, but his legacy as an astute investor and leader in the financial world will live on.
Let’s wish him and his investors the best as they embark on new paths, navigating the intricate world of finance with wisdom and resilience.
Until Next Time,
Peter Burke
