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Hedgie Degorce calls up old friends to set up a fund at Lansdowne's offices

PATRICK Degorce, a former fund manager at US banking giant Merrill Lynch, is launching a new fund based in the Mayfair offices of hedge fund powerhouse Lansdowne Partners.<br /><br />Degorce, 40, is being allowed to set up shop with a small team at the firm after contacting Stuart Roden and Peter Davies, former colleagues of his from Merrill Lynch Investment Management who now run Lansdowne&rsquo;s flagship fund. <br /><br />It is thought the hedge fund heavyweight is keen to raise as much as $1.5bn (&pound;925m) over time for the fund, set to be called Theleme, that will focus on investing equities around the world. <br /><br />The name probably derives from the fictional Abbey of Th&eacute;l&egrave;me in the works of French renaissance writer Rabelais &ndash; a utopia with no rules in which inhabitants behaved virtuously since there were no constraints leading them to desire pleasures they had been denied. <br /><br />In fund management terms this will likely translate to an &ldquo;unconstrained&rdquo; management style in which investments are targeted on their own merits, and fund benchmarks are ignored, in an effort to avoid falling into market traps. <br /><br />A source close to Lansdowne said Degorce is to set up at the firm&rsquo;s exclusive Davies Street office, a stone&rsquo;s throw from the famous Cipriani restaurant, and will use some &ldquo;back office functions&rdquo; but he will not share stock research with the firm<br /><br />PATRICK DEGORCE<br />SET TO BE BASED AT THE OFFICES OF LANSDOWNE PARTNERS<br />FRENCH native Patrick Degorce served as an officer in the French Navy in his twenties, before making an unorthodox leap into the financial services sector.<br /><br />He worked his way up to becoming a fund manager at Merrill Lynch Investment Management, the UK funds arm of the US investment banking giant, where he worked for seven years building a formidable reputation.<br /><br />He left Merrill to help legendary activist hedge fund manager Christopher Hohn found his philanthropic The Children&rsquo;s Investment Fund Management (TCI) firm in 2004.<br /><br />The activist group, which gives some of its profits to children&rsquo;s charities, buys stakes in undervalued firms and forces management to shake them up. <br /><br />Degorce grabbed headlines while at TCI when in 2007 he sent a letter to Dutch bank ABN Amro calling for the firm to be broken up after the management, he said, had &ldquo;failed to deliver&rdquo; on plans to cut costs.<br /><br />The letter led to the breakup of the bank and its subsequent disastrous takeover by Royal Bank of Scotland. <br /><br />When Degorce left TCI last January no formal reason was given, but reports suggested it was due to &ldquo;ill health&rdquo;.<br /><br />The firm, with Degorce on board, made giant profits in a &ldquo;shorting&rdquo; attack on doomed UK lender Northern Rock, betting that the bank&rsquo;s shares would fall. But in 2008 it reported it had suffered its biggest ever annual loss.