Hedge fund closes

Mar 21, 2008 (The Stamford Advocate - McClatchy-Tribune Information Services via COMTEX) -- NO MATCHES FOUND. | news | PowerRating | PR Charts -- A longtime Stamford hedge fund that trades in futures markets has closed its firm and liquidated its assets because of struggling performance.

Cornerstone Quantitative Investment Group, a registered commodity trading adviser and commodity pool operator with about $500 million in assets under management, informed investors last month it was shutting down the firm, an employee confirmed yesterday.

The firm, founded in 1995 by its two principals, John Eckstein and Adam Dunsby, was able to liquidate its positions quickly and return assets to its investors, said the employee, who would not give his name.

The fund was receiving phone calls this week from interested investors, but was not accepting any new capital, the employee added.

The shutdown was confirmed by Sol Waksman, president of Barclay Hedge, an alternative investment database and research firm that had been following the performance of Cornerstone.

"We got the same letter that went out to their investors," Waksman said.

The fund had eight employees at its 1 Station Place office in Stamford, according to the Cornerstone official.

Commodity trading advisers are regulated funds by the Commodity Futures Trading Commission, an independent agency of the government.

Cornerstone was trading in a number of futures markets, including fixed-income currency, equity, and commodities like metals, energy, grains and livestock, according to published reports.

According to Barclay Hedge, Cornerstone's International Value Fund, a quantitative global macro approach that launched in 1997, lost 15.2 percent last year, at which time assets totaled about $250 million. In January, the fund lost 8.18 percent, leaving it with about $183 million in assets.

Cornerstone's Real Commodity Analysis Programme, which made global macro trades in different commodities, lost 17.22 percent last year, though it did return 2.86 percent in January leaving it with $10 million in assets, according to Barclay.

Cornerstone's liquidation comes at a time when other funds focused on futures trading are doing well, according to Barclay.

These funds gained 5 percent in February and 7.17 percent so far this year, according to the Barclay Commodity Trading Advisor Index.

The last time the Barclay CTA index started this strong was 1997 when it was up 7.48 percent by the end of February, according to the report.

Cornerstone is at least the second lower Fairfield County hedge fund to shut down this year.

Last month, Sailfish Capital Partners, a private multistrategy hedge fund in Stamford, told investors it was liquidating its positions and closing because of poor performance.

Cornerstone's two principals, Dunsby and Eckstein, recently authored a book "Commodity Investing: Maximizing Returns Through Fundamental Analysis," which was released last month by Hoboken, N.J., publisher Wiley.

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