A well-known activist hedge fund that had the backing of billionaire
has lost more than 90% of its assets.
Marcato Capital Management LP’s assets fell to around $250 million at midyear from $3.2 billion in 2015, people familiar with the numbers said. Marcato’s decline in assets is due to poor performance and client redemptions, the people familiar said. In recent months, Marcato founder
Richard “Mick” McGuire
sold investment positions to meet redemption requests, though he has no plans to shut his firm, according to a person familiar with his thinking.
Mr. McGuire, 42, launched his San Francisco-based firm in 2010 after working for Mr. Ackman’s Pershing Square Capital Management LP. Both firms are activist investors, advocating for change at companies.
Mr. McGuire’s firm was backed by some prominent clients, including Mr. Ackman and
which invested $100 million.
has since pulled its money, a person familiar said. Mr. Ackman declined to comment through a spokesman.
Marcato’s flagship fund lost 42% last year, counting a losing bet on crane maker
More recent performance figures for that fund weren’t available. Another of Marcato’s funds lost about 20% last year and has gained about 1% this year, the people said.
In better times, Marcato was known for double-digit returns. In 2013, Marcato gained 26% pushing for changes at companies such as auctions house
The firm was involved in other high-profile fights including at Buffalo Wild Wings Inc. and Ugg’s owner
Marcato is one in a series of once-darling investors that have recently fallen in performance.
Mr. Ackman is among them. The billionaire ran one of the most successful funds before a pair of disastrous bets and redemptions pared his fund by roughly $9 billion from its 2015 peak. This year, Mr. Ackman is doing better.
Pershing Square Holdings
a proxy for the firm’s private hedge fund, is up about 50% through July.
Activist hedge funds are up 9.3% this year through July, according to HFR, though they are trailing the S&P 500, which gained 20%.
—Cara Lombardo and Corrie Driebusch contributed to this article.
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