By Kate Kelly
On the heels of weak performance in 2011, Louis Bacon has to reveal information about $15 billion Moore Capital to the SEC—and he’s not happy about it.
It’s a humbling time for Louis Moore Bacon. The 55-year-old founder of the $15 billion Moore Capital Management — and one of the premier hedge fund investors of the past two decades — just weathered his second down year in the past four after a particularly ragged run in the markets. His onetime heir apparent recently launched his own fund and a spate of negative publicity in the past few years has raised questions about his management.
Amid the tumult, the Dodd-Frank legislation now requires Moore and other large hedge funds to register with the Securities & Exchange Commission and provide details about their risk management, trading, and disciplinary records. Bacon is loath to reveal any of it.
That has prompted him to reconsider the way he has done business for more than 20 years, according to associates. Some, in fact, believe that in the coming years Bacon may transform Moore into what’s known as a “family office,” a far smaller operation primarily managing Bacon’s own capital as opposed to that of outside investors. “Louis has been talking about becoming a family office for at least two years,” says one investor, adding that Bacon considers the new disclosures required by the Dodd-Frank Act to be “a problem.”
Says a Moore official: “We are registering.” The official adds that the company will send an initial round of paperwork to the SEC in coming days.
Additional details on Moore’s inner workings are liable to throw a spotlight on the troubles it has grappled with in recent years. Over the past twelve months, several prominent traders have jumped ship to start their own hedge funds, and employees fear layoffs and additional departures in the coming months, say people familiar with the matter. In 2010, the Commodity Futures Trading Commission fined Moore $25 million, one of the largest financial penalties in the agency’s history, for failing to supervise a trader who allegedly manipulated the metals markets. (Moore neither admitted nor denied liability.)