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.
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’s flagship fund.
It is thought the hedge fund heavyweight is keen to raise as much as $1.5bn (£925m) over time for the fund, set to be called Theleme, that will focus on investing equities around the world.
The name probably derives from the fictional Abbey of Thélème in the works of French renaissance writer Rabelais – a utopia with no rules in which inhabitants behaved virtuously since there were no constraints leading them to desire pleasures they had been denied.
In fund management terms this will likely translate to an “unconstrained” 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.
A source close to Lansdowne said Degorce is to set up at the firm’s exclusive Davies Street office, a stone’s throw from the famous Cipriani restaurant, and will use some “back office functions” but he will not share stock research with the firm
SET TO BE BASED AT THE OFFICES OF LANSDOWNE PARTNERS
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.
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.
He left Merrill to help legendary activist hedge fund manager Christopher Hohn found his philanthropic The Children’s Investment Fund Management (TCI) firm in 2004.
The activist group, which gives some of its profits to children’s charities, buys stakes in undervalued firms and forces management to shake them up.
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 “failed to deliver” on plans to cut costs.
The letter led to the breakup of the bank and its subsequent disastrous takeover by Royal Bank of Scotland.
When Degorce left TCI last January no formal reason was given, but reports suggested it was due to “ill health”.
The firm, with Degorce on board, made giant profits in a “shorting” attack on doomed UK lender Northern Rock, betting that the bank’s shares would fall. But in 2008 it reported it had suffered its biggest ever annual loss.