• $67 million hedge fund Prescience Point predicted in April 2017 that trucking giant Celadon was going to zero.
• Some 2-1/2 years later, the short-seller's call turned out to be prescient. The Indianapolis-based company told its 3,800 employees on Monday it was shuttering.
• Eiad Asbahi, the founder of the Louisiana-based fund, told Business Insider that a number of things signaled possible issues at Celadon, including its accounting practices, nepotism among hires at the executive level, and the use of a regional firm for its auditor. 
• Click here for more BI Prime stories. 

The biggest bankruptcy in truckload history was unsurprising to a small Louisiana-based hedge fund. 

Celadon Group filed for Chapter 11 bankruptcy on Monday and plans to shutter the company entirely, the firm's CEO said in a statement. That comes roughly 2-1/2 years after Eiad Asbahi's Prescience Point Capital Management predicted the firm's stock price would fall to zero. 

Late last week, the US Securities and Exchange Commission charged two former Celadon executives with accounting fraud: former president and chief operating officer William Eric Meek, and former chief financial officer Bobby Peavler. 

While Asbahi original prediction that the firm would go to zero in a quarter or two did not materialize that quickly, his call of an eventual bankruptcy was still prescient. He told Business Insider that there were multiple red flags that led to his firm taking a short position against the trucking firm, which grossed $1 billion a year as recently as 2015.

Celadon could not be reached for a comment. The company's attorney did not immediately respond to a phone and email inquiry.

Read more:Thousands of truck drivers have lost their jobs this year in the trucking 'bloodbath.' Here's what's behind the slowdown in the $800 billion industry.

"Some of the most prominent," according to Asbahi, included: "numerous, severe accounting discrepancies"; transactions between the company and an off-balance sheet entity called 19th Capital; the selection of a regional auditor, BKD; and several hires of vice presidents and managers who were all in the same fraternity at Franklin College. 

'Actually worthless' 

Asbahi told Business Insider that while initially sniffing out opportunities in the transportation sector, his interest in Celadon piqued after industry insiders pointed to unusual happenings the crossborder trucking company. That "prompted us to start digging into the company's financial statements," Asbahi told Business Insider.

What caught Asbahi's attention initially were transactions between Celadon and an off-balance sheet entity called 19th Capital, according to his 2017 report.

Celadon's leadership disclosed in a 2016 earnings report that it would form a new off-balance sheet entity allowing the retirement of an asset financing group called 19th Capital. The company valued the entity at more than $27 million, or 4.5 times times its initial investment from just over a year ago.

Asbahi speculated the entity, based on truck valuations, was "actually worthless." Nevertheless, the retirement triggered a management payday of around $4.6 million.

That 19th Capital discovery was part of a larger scheme that the SEC centered much of its case on. Peavler and Meek, the two former C-suiters charged by the SEC, allegedly inflated the values of trucks the company bought and sold to bolster its net income and earnings per share. These truck prices were valued at double or triple fair market value, the SEC wrote.

The scheme allegedly cost shareholders more than $60 million.

'Nepotism and a lack of accountability are rampant'

Asbahi was an outsider to trucking — and unfamiliar with the industry's characteristics.

The $800 billion industry's largest companies are often helmed by the children of the founders or have descendants dominating the boards. Those in the trucking often view "family-owned" fleets as a positive, rather than a red flag for favoritism. 

Instead, Asbahi highlighted that was a potential downfall of Celadon. A former employee featured in his 2017 report said Celadon leadership "fostered a toxic work culture where nepotism and a lack of accountability are rampant," Asbahi wrote.

After the death of founder Steve Russell, the top management became dominated by men who had graduated in the mid-2000s from Franklin College, a liberal arts college 20 miles south of Indianapolis with just over 1,000 students. Many of these men were former fraternity brothers, according to the former employee.

Family members were in key positions, including the founder's son as president of logistics and the former CEO's 29-year-old nephew running the international business.

Read more:Bankrupt trucker Celadon told laid-off employees that they've lost health insurance and won't receive unused-vacation-time pay — read the full letter here

Because of these collegiate or blood relations, the former employee told Asbahi that there were no consequences for poor work performance. "You have a very incestuous organization that is unlike any other public company that I've ever seen," the former employee said in the report. 

The aftermath

Asbahi followed his initial 35-page report, in which he called the trucking company "a house of cards on the brink of collapse," with two more in 2017.

The New York Stock Exchange delisted Celadon in April 2017 after the trucking giant said it would need to amend reports dating back to mid-2014. Most of the banks covering Celadon dropped their coverage; the company has not filed a quarterly report since before the short-seller report.

In lieu of a typical earnings call, former CEO Paul Will hosted a conference call in May 2017. He announced a new COO and president, intentions to file a 10-Q in several weeks, and a plan to overhaul the auditing process. 

These new hires were "both substantive and symbolic of re‐focusing our company on core trucking operations," Will said. "We took these actions because the trucking business is a main driver of cash generating opportunity and it was underperforming our standards."

In June 2017, Will stepped down. CFO Peavler left the following year. Celadon's stock began a free fall from around $9 per share in 2017 to the low single-digits in 2018 to pennies this month.

Not once did Celadon or its new leadership get in touch with the Baton Rouge-based financier, he said. 

"We did not have any interaction with the company either before or after the report," Asbahi said in the email. "Given our confidence in our thesis and the severity of the fraud being perpetrated, we felt that contacting management would be a fruitless exercise. Celadon executives made zero attempts to contact or meet with us after the report was published." 

Are you a former Celadon employee? Email the reporter at rpremack@businessinsider.com. 

Learn more about why truck drivers are saying their industry is in a "bloodbath"— and what key executives think need to change

A truckload giant just filed for bankruptcy, and it leaves nearly 3,000 truck drivers jobless

America's largest truck-engine manufacturer just announced 2,000 layoffs — and it's another sign of the trucking 'bloodbath' that's slamming the $800 billion industry

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We asked C.H. Robinson's new CEO everything about the brokerage giant's strategy for the years ahead — from tech recruiting in Minnesota to the trucker shortage to the trucking recession. Here's the full interview.

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• Hedge fund manager David Kowitz was ordered to pay Sotheby's roughly $6.6 million after a judge ruled against the investor in a case involving an allegedly fake painting.
• The lawsuit concerns the $10.8 million sale of "Portrait of a Gentleman," a painting attributed to Dutch artist Frans Hals. The 2011 sale was consigned by art dealer Mark Weiss and Kowitz's art vehicle, Fairlight Art Ventures.
• The London judge ordered Weiss to pay a $4.2 million settlement to Sotheby's in April, and Wednesday's ruling found Fairlight must repay the remainder of the $10.8 to the auction house.
• Visit the Business Insider homepage for more stories.

Hedge fund founder David Kowitz is on the hook for roughly $6.6 million after a London judge ordered the investor to pay Sotheby's for an allegedly fake painting, Bloomberg reported Wednesday.

The case involves the $10.8 million sale of "Portrait of a Gentleman," a painting attributed to Dutch artist Frans Hals. The 2011 sale was consigned by art dealer Mark Weiss and Kowitz, who founded Indus Capital Partners and owns art investment firm Fairlight Art Ventures.

The Dutch Golden Age painting fell under scrutiny when art experts hired by the auction house found it included synthetic paint pigments first used four centuries after Hals died. Sotheby's reimbursed the painting's buyer and sued Weiss and Fairlight.

Weiss paid $4.2 million to settle the lawsuit in April, and Judge Robin Knowles ruled Wednesday that Fairlight owes the remainder of the $10.8 million sum, including costs and 5% interest, according to Bloomberg.

Sotheby's called the painting an "unequivocal" fake in February 2017, telling The New York Times that, although Weiss conducted his own investigation into the painting, "none of these further tests would change its conclusion."

Knowles claimed the case hinged more on the artist than the piece itself, Bloomberg reported. He noted that the court wouldn't judge the value of the work in case such a statement would change its worth, forgery or not.

"Whether by Frans Hals or not, it is to be hoped that its intrinsic qualities will not be ignored, and that it may be enjoyed for what it is, which is a fine painting," the judge reportedly said.

Sotheby's expressed its approval of the ruling, saying in a statement it was "successful on every front" and "glad to see our position completely vindicated by the court."

Kowitz couldn't be reached for comment.

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• With 2020 quickly approaching, Business Insider is polling experts to find out what finance and real estate will likely look like a decade from now.
• The public markets are no longer the kingmakers they were for legendary stock-pickers like Julian Robertson and Peter Lynch. The savviest discretionary managers are diving into the private markets to boost their returns. 
• Over the next 10 years, insiders, consultancies, and banks all expect this migration to less efficient private markets to accelerate.
• With fewer public companies and an IPO slowdown, the private market opportunities for hedge funds like Tiger Global and Coatue have become more attractive, even as sky-high valuations have plagued investors that dove into companies like WeWork.
• Investors, according to a recently released note from Carlyle, are leaving their public markets exposure to quant funds and passive indices, and searching for alpha in the less efficient private markets. 
• "The lines are blurring between hedge funds and private equity, and I expect the industries over time to converge," said Don Steinbrugge, founder of consultancy AgeCroft Partners.
• Click here for more BI Prime stories. 

The smart money is getting out of the public markets.

Private equity, once an obscure part of the alternatives space, will have more assets than the better-known hedge fund industry by 2023, according to Preqin. Institutional investors, meanwhile, are shifting more of their portfolios to the private markets, according to EY, in part due to underperformance of active managers in the public markets.

With 2020 quickly approaching, Business Insider is looking ahead and polling experts to learn what Wall Street will look like in 2030. Over the next 10 years, insiders, consultancies, and banks all expect this migration to less efficient private markets will continue and accelerate.

Passive investing, which topped half of all mutual funds assets for the first time in 2019, will only continue to rise, they say, and finding an edge in the public markets will become nearly impossible thanks to advances in computing power and data-processing.

We've already seen the effects of this sea change on value investors, who have struggled to make money using a strategy pioneered by legends like Benjamin Graham and Warren Buffett. In 10 years' time, nearly all big discretionary managers could see a public market void of obvious plays. 

Managers are already diving into the private markets

Already top stock-picking hedge funds — managers who made their names and their billions with concentrated bets on well-known, public companies — are seeing the light.

Viking is growing its private markets team after putting more than a half of a billion dollars to work in the private companies during the first half of this year, while Tiger Global and Coatue have become some of the biggest early-stage investors. Point72 and Two Sigma have built out venture capital arms, and Lone Pine is opening up another of its funds to private investments.

One of the top-performing hedge funds this year, Mudrick Capital, can thank its large stake in Juul for its success, though that may be in peril thanks to the rash of vaping-related deaths in the United States. Billionaire Joseph Edelman's Perceptive Advisors closed its first venture capital fund with $210 million from institutional investors and family offices, the firm announced in December.

"The demand for less liquid securities will grow over time as more and more view it as an area that investment firms have an edge and where high returns can be generated relative to liquid markets," said Don Steinbrugge, founder of consultancy AgeCroft Partners.

"The lines are blurring between hedge funds and private equity, and I expect the industries over time to converge."

Mutual funds are even getting in on the private market action, though with a close eye from the Securities and Exchange Commission. Fidelity is in Juul, WeWork, and Airbnb, and T. Rowe Price and Franklin Templeton have invested in unicorns as well.

Active managers have turned to the private space for several reasons — like exploding valuations and the shrinking roster of public companies — but the biggest is that it's just hard to make money in an arena that's becoming more efficient everyday.

'It's much harder to beat a computer'

Passively managed mutual fund assets have shot past their actively managed peers; an IMF report states that the total assets tracking an index reached $4.25 trillion this year.

Beating the market is a zero-sum game for active investors, said Jamie Dinan, founder and chief executive of York Capital Management, at the Project Punch Card conference in December. The rise of passive, he said, has upped the competition because it took away clueless investors that didn't know what they were doing.

"It's much harder to beat a computer or a really intelligent person," he said. 

And quants are finding new areas to exploit much quicker now thanks to increased computing power, advancements in artificial intelligence and machine learning, and an explosion of new, alternative data streams that have quickly become a necessary cost for managers hoping to keep their heads above water.

Investors in hedge funds are concerned that they're paying large fees to get the same type of returns that retail investors can get for free — and that hedge funds in the public space are simply following each other.

Crowding has gotten worse the last three quarters, according to Goldman Sachs' hedge fund tracker. Amazon, Facebook, and Alphabet make up 5% of all hedge funds' long portfolios, Goldman says, and those three stocks have been among the top five positions in hedge funds for the last 14 quarters.

And public market options are shrinking by the day, with mergers and buyouts — like Elliott and Francisco Partners recent discussions to take LogMeIn private for $4 billion — outpacing IPOs.

The private markets are flooded with money, while the biggest unicorns have struggled out of the gate once public, or didn't even make it to the IPO, like WeWork. Now companies like Palantir are pushing back their public offerings.

For underfunded pensions, the private markets are the only place to make eye-popping returns once common of hedge funds.

A Natixis survey of 500 institutional investors managing more than $15 trillion found that 37% are increasing their allocation to private debt next year while 28% are bumping up their allocation to private equity. The top talent is going with the dollars too, as hedge funds are finding tough competition to reel in for the smartest investors from the private side. 

'We aren't going back'

Dev Kantesaria, CEO and founder of stock-picking hedge fund Valley Forge Asset Management, believes the story of the next ten years will be the impact of "relentless market share gain by passive strategies."

The bloated hedge fund industry — which has thousands of funds chasing similar trades — is expected to shrink, and Kantesaria expects those assets from closed hedge funds to flow into passive products.

"Once you're indexing, you don't get those investors back very easily," he said knowingly: Kantesaria serves on the board of a hospital that recently put a good chunk of its endowment into a Vanguard index fund, and "we aren't going back."

The size of individual hedge funds that are used to beating the overall market may be holding them back, says Chris Walvoord, global head of hedge fund research and portfolio management at Aon.

"A lot of traditional hedge fund firms are becoming more institutionalized. They can't do the things they used to," he said.

"Investors are still in the process of getting heads around what hedge funds are able to do at certain sizes."

Walvoord is not completely dismissing active managers trying to outperform in equities — "there will still be opportunities for people to look in the nooks and crannies"— but in 2030, it will be tougher.

A recent note from Carlyle's global head of research Jason Thomas states unicorns' preference of private money over the public markets and the lack of young, growing public companies have created a "new paradigm for portfolio management."

"Investors rely on private markets for 'alpha,' while passive allocations deliver more efficient and targeted 'beta,'" he wrote.

This shift might force investors to rethink the term alternative investments.

"Rather than an 'alternative' asset class, private capital represents the 'active' portion of institutional portfolios, responsible for diversification, excess returns, and important signals about changes in the broader investment opportunity set," Thomas wrote. 

SEE ALSO: The booming private market has some hedge funds spreading into private equity's domain. Now a tug-of-war has broken out over talent.

SEE ALSO: Hedge funds are getting swamped by alternative data. Some want to fast-track how they buy it and focus back on trades.

SEE ALSO: The SEC is stepping up scrutiny of mutual funds that have poured money into unicorns like WeWork and Airbnb

Join the conversation about this story »

NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.

• Julian Robertson's network is one of the most sprawling in any industry — the billionaire has seeded dozens of hedge funds, many of which have had their own spin-offs, creating a web of hundreds of names. 
• Funds related to Robertson currently manage, conservatively, more than $230 billion in assets, with names like Tiger Global, Lone Pine, Coatue, Maverick, Viking Global, and D1 Capital highlighting the list. 
• Even more fascinating are the connections between some of the most well-known people in finance thanks to Robertson. Pharma Bro Martin Shkreli and "The Big Short" character Steve Eisman, for example, are both a part of the wide-stretching network. 
• We reported earlier this year that yet another grandcub is on its way, with the former co-chief investment officer at Viking Global Ben Jacobs in the process of starting his own fund, which sources said will be called Anomaly Capital. 
• We've mapped out these connections with a searchable graphic. You can hover over the boxes to see more about the individual funds. 
• Click here for more BI Prime stories. 

Nearly two decades after Julian Robertson closed Tiger Management to outside investors, his fund still constantly pops up in headlines and conversations within the hedge fund industry he helped pioneer. 

The billionaire North Carolina native's sprawling network of spin-offs and seeded start-ups is almost overwhelming, and has spawned fellow billionaires like Chase Coleman, O. Andreas Halvorsen, Philippe Laffont, and several others.

Names like "Pharma Bro" Martin Shkreli, "The Big Short" main character Steve Eisman, and Ken Griffin's ex-wife Anne Dias-Griffin are among the hundreds of names that have been seeded, spun-off, or came from a fund that's connected to Robertson. 

Names like former candidate for governor in Connecticut David Stemerman and Tiger Asia founder Bill Hwang, who was convicted of insider trading in 2012. Like B. Robertson Williamson Jr., Robertson's nephew who co-founded Williamson McAree Investment Partners and died in a car crash in North Carolina in 2012, and Gilchrist Berg, who has been running Water Street Capital for more than 30 years thanks to an initial investment from Robertson in 1987.

And we still spend plenty of time tracking where Tiger descendants are headed (and what money will follow them there.)

We reported earlier this year that yet another grandcub is on its way, with the former co-chief investment officer at Viking Global Ben Jacobs in the process of starting his own fund, which sources said will be called Anomaly Capital. 

Business Insider decided to try and get a handle on what the entirety of the Tiger family tree looked like. For the project, we considered funds that were started by an employee of Robertson's at Tiger or were seeded by Robertson to be a Tiger Cub, while funds that spun-off of those firms were Tiger Grandcubs. There were even a handful of Great-Grandcubs, which were started by alumni of Grandcub firms. 

The list is massive. Hundreds of names and nearly 200 different firms, many of them already closed or shut down, like John Griffin's Blue Ridge Capital or Stemerman's Conatus Management. Inactive funds' assets were not included in the total count of assets managed by funds connected to Robertson, which Business Insider conservatively estimates at about $230 billion. 

That number also doesn't include another connection Robertson has to a big-time fund manager because it's always been a family one and not a financial one: His sister, Blanche Bacon, is married to the father of Moore Capital founder Louis Bacon, another North Carolina native who recently announced he is closing his long-running macro fund. 

Below is a searchable lists of all the firms in the graphic. You can hover over the boxes to see more about the individual funds. The list was compiled using past media reports, original reporting, social media searches, and publicly available data. 

Anyone we missed or know of a new addition to the family tree on the way? Email bsaacks@businessinsider.com for all tips and comments.

Join the conversation about this story »

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• The hedge funds to watch in 2020 are a mix of big names, newcomers looking to make a splash, and a long-time industry player giving it another shot. 
• Big-name macro managers like Brevan Howard will be in the spotlight thanks to the tricky geopolitical puzzle posed by 2020 and the closure of long-time macro player Louis Bacon's Moore Capital.
• Newcomers include former Viking chief investment officer Ben Jacobs and his planned fund Anomaly Capital, as well as former Cantor Fitzgerald boss Shawn Matthews' Hondius Capital.
• Click here for more BI Prime stories. 

Investors are fleeing the hedge fund industry, pulling out billions more every quarter than they are putting in.

But there are still managers who are thriving, as well as big names that are re-entering the space or picking it up again after a tough stretch. Despite the tough launch environment, new funds are popping up with promising pedigrees and big backers. 

Still, the realities of the industry have hit both big and small funds.  Industry experts — like billionaire Stanley Druckenmiller — expect the manager count to continue to shrink. Returns have largely underwhelmed investors thanks in part to the increasingly efficient public markets, which have forced more funds to dive into the murkier private space, where returns can jump sky-high and then be cut down in record time. 

The managers to watch in 2020 are all battling the same headwinds — they are just attacking it from their own perspectives. 

SEE ALSO: What it's like to launch a hedge fund when even the biggest managers are struggling and long-short equity is a 'dirty word'

SEE ALSO: We mapped 4 generations of Tiger Management descendants: it shows Julian Robertson at the center of a quarter-trillion-dollar web that links billionaires, the Pharma Bro, and a 'Big Short' main character

SEE ALSO: Hedge funds are losing to private equity in a tug-of-war over investors' portfolios, and experts say it's only going to get worse

Cinctive Capital

One of the biggest launches of 2019, Cinctive Capital is trying to break into the ultra-competitive multi-strategy space where funds like Millennium, Citadel, and Point72 battle for talent and assets. 

The founders of Cinctive of course know this, with ties to many of the biggest names in the industry. Rich Schimel and Larry Sapanski worked for billionaire Steve Cohen at Point72's predecessor SAC before founding their own fund, Diamondback, in 2005. 

Diamondback grew to nearly $6 billion in assets but was targeted by federal authorities as a part of the insider trading crackdown that forced Cohen to leave the industry for two years. One Diamondback portfolio manager was convicted of insider trading, but the charge was overturned on appeal. The bad press, though, forced Diamondback to close. 

Schimel then worked for Ken Griffin at Citadel, leading the now-closed Aptigon unit, while Sapanski set up his own fund, which he converted into a family office. Now, with seed money from one of the country's biggest pensions and more than a dozen PMs, Cinctive is looking to break through in 2020 during its first full year of trading.  

Brevan Howard

Alan Howard's renewed commitment to investing has investors excited about the potential for long-running macro fund Brevan Howard in 2020. 

With the U.S. presidential election and the continued fall-out from a possible Brexit, macro fund managers with the golden touch will be in high demand as investors look to navigate their portfolios through political uncertainty. 

Howard, the billionaire co-founder of Brevan Howard, gave up his CEO gig to focus his energy entirely on the investment side of things after the fund lost more than $20 billion in assets since 2013. 

Since 2013, the firm's master fund has not returned more than 12.4% in a year, and lost money in 2014, 2015, and 2017. 

Marcato Capital

While Bill Ackman had a record-breaking 2019, one of his proteges is limping into 2020.

Mick McGuire, who founded the San Francisco-based Marcato Capital in 2010, has lost a huge chunk of his assets; the firm managed more than $3 billion in 2015 after the successful activist campaigns against Sotheby's and Buffalo Wild Wings. 

This summer, The Wall Street Journal reported that Marcato's assets had fallen to roughly $250 million as investors were turned off by a disastrous 2018, when the fund lost 42%. The reason for the crash was a failed bet Terex Corporation, according to the report. 

While activists like Third Point's Dan Loeb had a solid year, the field is still prone to big swings between sky-high returns and bottoming out. McGuire's former boss, the billionaire Ackman, is a great example, as his fund produced its best year on record after losing money the last three years. 

Hondius Capital

Hondius Capital, started by former Cantor Fitzgerald broker-dealer head Shawn Matthews, is also on the radar for investors looking for new blood. 

Matthews' macro fund made money in a turbulent August for the hedge fund industry, sources say, which has generated more interested in the Stamford-based manager. 

It's Matthews' first fund, after he ran the broker-dealer for the boutique bank for ten years, and he received seeding from his former employer to start it. While Matthews originally planned to raise $500 million, a regulatory filing from July of this year put the firm's assets at less than $150 million. 

Anomaly Capital

O. Andreas Halvorsen has lost two chief investment officers in the last three years, and the most recent departure is going to be one of the most important managers to watch in 2020.

Ben Jacobs, who took over as co-CIO when Daniel Sundheim left Viking Global Investors in 2017, is launching his own fund, which sources have told Business Insider will be named Anomaly Capital, in the second half of next year. 

Sundheim's launch of his D1 Capital in 2018 was one of the biggest in hedge fund history, with $4 billion in assets before trading. The appetite from investors for Jacobs' new offering might be a signal into the broader health of the industry — traditionally, people have clamored to get into well-pedigreed funds like this. 

Perceptive Advisors

Perceptive Advisors founder and billionaire Joseph Edelman is one of the most well-known healthcare investors in the world, so eyes will be on his fund as the U.S. presidential election revolves around the future of health insurance. 

But his firm also had a newsworthy 2019; after the firm's $1.3 billion Life Sciences fund lost money in 2018, it has returned more than 30% this year through the end of November, despite losing 9% in August. At the end of the year, firm also announced a new venture fund, seeded with $210 million. 

The venture fund will focus on start-ups in the biotech space, and is another example of hedge funds leaking into the private space. 

Point72 Asset Management

In Steve Cohen's first full year of trading outside capital again after his ban from managing outside capital, Point72 performance was solid, besting several of his fellow multi-strategy giants.

But it was news outside of monthly returns that heralded Cohen's full return to the industry. He got entangled in the war for talent in the industry, with a story in The Wall Street Journal noting that he refused to shake the hand of an employee leaving to join rival Ken Griffin's Citadel. He was revealed as the buyer of a $91 million Jeff Koons' sculpture, a three-foot-tall stainless-steel rabbit. 

And Cohen is in the process of buying the New York Mets, his childhood team. After the news about the Mets purchase became public, Cohen told investors that while owning the Mets has been long-time dream of his, it will not distract him from the fund. 

Appaloosa founder David Tepper turned his fund into a family office soon after buying the Carolina Panthers, as he wanted to dedicate more energy to the team, but several big-name finance folks continue to run their businesses while owning a sports team, like Avenue Capital and Milwaukee Bucks' co-owner Marc Lasry. 

Mudrick Capital

Jason Mudrick eponymous firm was flying high at the beginning of 2019.

The firm's big bet on vape-maker NJOY Holdings pushed returns to the top of the industry, but a rash of vaping deaths and subsequent regulatory scrutiny has depressed the valuations of all the major vaping companies, including Juul, which has faced the most backlash. 

Mudrick, who invests in distressed securities, bought a majority stake in NJOY in 2017 when the bankrupt company was valued at $40 million, a move that looked like a stroke of genius when the company's valuation jumped to $2 billion in May. While it's unlikely the company falls back to its pre-Mudrick valuation, it no longer looks like the home run it once was. 

• Julian Robertson's network is one of the most sprawling in any industry — the billionaire has seeded dozens of hedge funds, many of which have had their own spin-offs, creating a web of hundreds of names. 
• We've mapped out these connections with a searchable graphic. You can hover over the boxes to see more about the individual funds. 
• We reported earlier this year that yet another grandcub is on its way, with the former co-chief investment officer at Viking Global Ben Jacobs in the process of starting his own fund, which sources said will be called Anomaly Capital. 

Nearly two decades after Julian Robertson closed Tiger Management to outside investors, his fund still constantly pops up in headlines and conversations within the hedge fund industry he helped pioneer. 

The billionaire North Carolina native's sprawling network of spin-offs and seeded start-ups is almost overwhelming, and has spawned fellow billionaires like Chase Coleman, O. Andreas Halvorsen, Philippe Laffont, and several others.

We've mapped out all of these connections with a searchable graphic. You can hover over the boxes to see more about the individual funds. 

The list is massive, with hundreds of names and nearly 200 different firms, many of them already closed or shut down. Funds related to Robertson currently manage, conservatively, more than $230 billion in assets. 

Here's our exclusive Tiger Management family tree — it shows Julian Robertson at the center of a quarter-trillion-dollar web that links billionaires, the Pharma Bro, and a 'Big Short' main character

Anyone we missed or know of a new addition to the family tree on the way? Email bsaacks@businessinsider.com for all tips and comments.

SEE ALSO: What it's like to launch a hedge fund when even the biggest managers are struggling and long-short equity is a 'dirty word'

SEE ALSO: Humans are beating machines, and Pershing Square and Greenlight are crushing it. Here's how hedge funds performed in the first half.

SEE ALSO: Hedge funds are losing to private equity in a tug-of-war over investors' portfolios, and experts say it's only going to get worse

SEE ALSO: By 2030, the machines running a huge chunk of public markets will only be smarter and private equity and hedge funds will collide

Join the conversation about this story »

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• The convicted pedophile Jeffrey Epstein told associates that he considered marrying Celina Dubin, the 24-year-old daughter of his ex-girlfriend Eva Andersson Dubin and the hedge-fund billionaire Glenn Dubin, a source told Business Insider.
• According to financial records reviewed by Business Insider, Epstein named Celina Dubin as a beneficiary of a trust that he also used to pay lawyers, models, and other associates in his orbit.
• He told associates that marrying Celina would permit him to leave her his vast fortune, including his private island, without paying estate taxes, according to the source. There is no indication that the two had a romantic relationship.
• A different source familiar with Epstein's finances told Business Insider he used trusts and other accounts to send money to alleged coconspirators and apparent victims of his sex-trafficking operation as recently as this year.
• The existence of the trust raises questions about whether the executors of Epstein's will — who were named as beneficiaries — have conflicts of interest and what, if any, money is available to the 26 women suing his estate. 

Jeffrey Epstein died a bachelor, but the convicted pedophile told associates that he considered marrying the 24-year-old daughter of his ex-girlfriend, Business Insider has learned.

The woman, Celina Dubin, is the daughter of the physician and former Miss Sweden Eva Andersson Dubin and the billionaire hedge-fund manager Glenn Dubin. Eva Andersson Dubin dated Epstein for 11 years, beginning in the 1980s, before she married Glenn Dubin in 1994; Epstein told associates that he introduced the couple. 

As recently as 2014, according to one source close to Epstein, he told associates that if he ever married, it would be to Celina Dubin, who was 19 at the time and who once called him "Uncle Jeff." There is no evidence that Epstein ever had a romantic relationship with Celina Dubin, and his intent appears to have been financial. Epstein told associates that he wanted her to inherit his fortune, including his private island in the Caribbean, the source said, and that marrying her would be a way to avoid inheritance taxes.

The source provided Business Insider with handwritten notes, taken after the fact, recounting the conversations.

Around the same time, in 2014, Epstein named Celina Dubin as a beneficiary of a trust, according to financial documents provided by a different source and reviewed by Business Insider. She was removed as a beneficiary in 2015, and the Dubins said they were not aware of the trust's existence. It's unclear how much money was in the trust while Celina was a beneficiary, but it totaled about $50 million in 2019, according to the source, who is familiar with Epstein's finances.

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The Dubins are prominent socialites and philanthropists in New York City and Palm Beach, Florida. Eva Andersson Dubin was for many years the in-house physician for NBC, and she founded the Dubin Breast Center of the Tisch Cancer Institute at Mount Sinai Health System. Glenn Dubin cofounded the hedge fund Highbridge Capital Management and now runs a quant fund called Engineers Gate.

Celina Dubin is attending the Icahn School of Medicine at Mount Sinai. She graduated from Harvard University in 2017 and was named one of the "15 Hottest Freshmen" in her class by The Harvard Crimson in 2014. She has been photographed on the red carpet at numerous charity events and written for Departures magazine.

In August, Business Insider reported that the Dubin family has been tied financially, socially, and philanthropically to Epstein for decades. In 2009, after Epstein's release from jail on charges of soliciting a child for prostitution, the Dubins wrote an email to his probation officer saying they were "100% comfortable" with Epstein spending time with Celina Dubin, who was 14 at the time, and their two other minor children. Since Epstein's July arrest, however, the Dubins have sought to publicly distance themselves from the sex offender.

The existence of the trust and Epstein's interest in leaving his vast wealth to Celina Dubin suggest that his relationship with the Dubin family was more complex than had been previously known.

In a statement, the Dubin family spokesman Davidson Goldin told Business Insider: "Glenn saw him perhaps once a year in large group settings and had no business interactions with him whatsoever after 2007. Eva and Celina Dubin accepted less than a handful of invitations to gatherings that included the founder of Microsoft and a DNA pioneer. The Dubins are horrified by Jeffrey Epstein's despicable conduct. Had they been aware of it, they would have cut off all ties instantly."

Epstein established the irrevocable trust in 2004

Epstein, who died by suicide in August, created the irrevocable trust — a common holding structure to reduce tax liabilities — in 2004. He transferred that trust from JPMorgan to Deutsche Bank, along with other entities, in 2013. The trust contained about $50 million as of 2019 — or close to 10% of the total value of Epstein's declared wealth — according to the source familiar with Epstein's finances.

The trust, and others like it, appears to have been used in part to facilitate payments to women in Epstein's orbit. It named six people as beneficiaries and two as trustees — people who administer the account on behalf of the beneficiaries — according to a 2014 document viewed by Business Insider. The trustees were Epstein's New York-based accountant Harry Beller and Virgin Islands-based lawyer Erika Kellerhals, both of whom worked with Epstein on various organizations he set up. Neither responded to requests for comment. 

Celina Dubin was removed from the trust in 2015 and never received any payments from it, according to the source familiar with Epstein's finances. Three of Epstein's longtime female associates were also beneficiaries in 2014. All three were listed in the trust document as residing in New York City at 301 E. 66th St., the Upper East Side building home for years to members of Epstein's entourage— young models, girlfriends, pilots, lawyers, and, in the 1980s, Eva Andersson Dubin. 

Two of the women named as beneficiaries married each other in 2013 at Epstein's direction so that one, who was from Eastern Europe, could gain legal residency, Business Insider previously reported. Both are adults and have since divorced. 

None of the three women have come forward publicly, and because they may be victims of sexual abuse or trafficking, Business Insider is not naming them. 

Rounding out the list of the beneficiaries in 2014 were two longtime Epstein attorneys, Richard Kahn and Darren Indyke. They're named on dozens of documents related to Epstein entities, including businesses and foundations, in various executive roles, including president, director, and treasurer.  

Neither Kahn nor Indyke responded to requests for comment. 

Epstein moved money to alleged coconspirators as recently as this year 

The source familiar with Epstein's finances told Business Insider that Epstein also used other trusts and accounts held at Deutsche Bank to move money to people in his orbit, including women who have been identified both as victims and as coconspirators in his sex-trafficking scheme, as recently as this year.

"Deutsche Bank is closely examining any relationship with Jeffrey Epstein, and we are absolutely committed to cooperating with all relevant authorities," a bank spokesman said in a statement. 

Ghislaine Maxwell, a longtime Epstein confidante who has been accused of recruiting women and girls for him, was named as a beneficiary on multiple trusts, the source said. Maxwell, who is reportedly in hiding, could not be reached for comment, though she has denied all allegations of wrongdoing in the past. Her lawyer did not respond to a request for comment.

Nadia Marcinko, who was described as Epstein's "sex slave" in police records and alleged by multiple accusers to have participated in sex acts with Epstein and underage girls, was the recipient of payments earlier this year, the source said. So was Anouska de Georgiou, a British actress who this year publicly said she was a victim. Neither responded to requests for comment.

In recent years, Epstein also sent money to about a half dozen women in Russia who appeared to be models, the source said, describing some of the transactions as apparent tuition payments. 

Before he died, prosecutors accused Epstein of using his vast wealth to "influence individuals who were close to him during the time period charged in this case and who might be witnesses against him at a trial." In particular, they cited large money transfers to two unnamed potential coconspirators — one received $100,000; the other obtained $250,000 — in late 2018.

Deutsche Bank terminated its relationship with Epstein in 2018 after reporting in the Miami Herald reignited public outrage over his crimes, according to The Wall Street Journal. As the bank wound down Epstein's accounts in the summer, the source familiar with Epstein's finances told Business Insider, most of the $50 million in the trust of which Celina Dubin had been a beneficiary went to an Epstein account at FirstBank Puerto Rico, which took over most of Epstein's banking. A representative for FirstBank did not respond to a request for comment. 

It's legally possible that the beneficiaries of the 2004 trust, including Celina Dubin, didn't know they were beneficiaries at all, according to William LaPiana, New York Law School's professor of wills, trusts, and estates. 

LaPiana said Epstein could have used money from the trust to buy gifts for the beneficiaries — and the source close to Epstein said he loved to buy presents for close companions and high-profile contacts. 

'The one who never failed him'

The Dubins' long history with Epstein dates back to the 1980s, when he dated Eva Andersson Dubin for more than a decade — his longest relationship and first serious girlfriend. Eva married Glenn Dubin in 1994. The couple had three children, starting with Celina Dubin.

Epstein became particularly close to Celina Dubin, according to a dossier that Epstein's defense attorneys prepared for him in 2007, before he pleaded guilty to soliciting a minor for prostitution in Florida. The document, which was first published by The Palm Beach Post in October, relies on statements gathered from close Epstein associates, including Eva and Celina Dubin, who was 12 years old at the time.

"Jeffrey has enjoyed an especially close relationship with Celina, 12," the dossier said. "Celina wrote glowingly of their weekly science lesson when 'Uncle Jeff,' as she calls him, takes time from his personal and business schedule to go over to her apartment and discuss science and mathematics lessons she is learning at school."

The document quotes Celina Dubin recalling the time her father was too busy at work to accompany her to a father-daughter dance day at her ballroom-dancing class. "I got to the class alone," she wrote, "but then soon enough a quick phone call to Uncle Jeff didn't leave me standing there, alone for more than 10 minutes. Uncle Jeff substituted for my father that night, and the way he rushed to the class felt exactly like having my father there." 

Some information in the dossier is at odds with recent claims the Dubins have made about their relationship with Epstein. For instance, multiple sources have told Business Insider that Epstein was Celina Dubin's godfather. But, through spokespeople, the Dubins have repeatedly denied it, both to Business Insider and to other outlets. (Vanity Fair, for instance, quoted a "source close to the Dubins" saying "the Dubins are Jewish and Jewish people do not typically do godparents.")

The dossier, however, contains repeated unambiguous statements from Eva Andersson Dubin to the contrary. "Today [Jeffrey] is a very close and important friend to my family. He is the godfather of my three children and is close friend of my husband as well."  She later added: "I could not ask for a better friend or godfather to my children."

Goldin, the Dubins' spokesperson, said Eva Andersson Dubin was mistaken, writing in an email: "None of the Dubins' three children have any godparents."  

In 2009, Epstein's former house manager, Alfredo Rodriguez, attempted to sell Epstein's "little black book" for $50,000 to an attorney representing one of Epstein's accusers. The lawyer alerted the FBI, and Rodriguez was arrested in a sting operation on charges of obstruction of justice. Agents seized both the address book and handwritten notes, which included email addresses and phone numbers for key figures, that Rodriguez had prepared for the attorney to aid him in his case. The notes included a phone number for the Dubins with the notation: "Eva Andersson (Dubin). (Former model and mother of naked pic)."

Rodriguez died in 2015. It's unclear what picture his notes referred to.

Epstein told associates he was at the hospital when Eva Andersson Dubin gave birth to Celina, the source close to Epstein said. That person said the financier characterized Celina Dubin as his sole heir, telling others that the young woman was "the only one who never failed him."

The source said there was nothing untoward about their relationship. 

"Epstein did not visit Eva in the hospital when any of her children were born," Goldin in an email said. 

Eva and Celina Dubin were invited to meet with prominent guests, including DNA pioneer James Watson 

When Epstein was arrested in July, the Dubins' spokesperson at the time said Eva was shocked by the latest round of allegations, saying that their relationship had faded after his release from jail in 2008.

"She's a very loyal friend and didn't abandon him after 2008, but the frequency of their contact was less," the representative told The New York Times in July. 

But the Dubins did not keep Epstein at arm's length. The source close to Epstein told Business Insider that Eva and Celina Dubin were at his home within the past year.

Epstein spent at least one major holiday with the family. In 2009, just months after his release from jail, they invited him to a Thanksgiving celebration at their Palm Beach home, Business Insider previously reported. 

Eva and Celina Dubin were often invited for dinner when Epstein hosted a prominent guest, the source close to the financier said. Some of these meetings have been documented in recent months: Eva Andersson Dubin attended a celebrity-filled party for Prince Andrew in 2010 at Epstein's New York mansion, according to The New York Times. In 2011, Eva and Celina Dubin met with Bill Gates and Epstein, again at Epstein's New York home, The Times reported. 

One previously unreported meeting took place within the past two years, a different source with knowledge of the matter said. At Epstein's New York mansion, Eva and Celina Dubin met with James Watson, the scientist who helped discover DNA and has been stripped of awards after repeatedly making racist remarks. Watson, who is in his 90s, could not be reached for comment, and his sons did not respond to requests for comment.

"Dr. Watson was at an introductory meeting ... that included a physician, medical students and several other attendees for discussion about his work and accomplishments," Goldin said in an email. The meeting was not over dinner or lunch, he added.

Smaller clues in Epstein's footprint also point to his relationship with Celina Dubin. His Spotify account included a 2011 playlist called "celina," largely with music from the DJ David Guetta. Epstein was publicly linked to another Celina — Celina Midelfart, a Norwegian businesswoman who dated Donald Trump. Midelfart was on Epstein's private plane several times in 1996 and '97, according to flight records, but has not been publicly tied to him since then.

Epstein and Celina Dubin were connected philanthropically too. In 2009, when Epstein wanted to contribute to Eva Andersson Dubin's breast-cancer organization — the Dubin Breast Center of the Tisch Cancer Institute at Mount Sinai — he understood that a public donation from a registered sex offender might not be welcome. Business Insider previously reported, citing a source familiar with the donations, that Eva Andersson Dubin established a new nonprofit, called the Celina Dubin United Fund, to serve as a pass-through. In 2013, according to the source familiar with the matter, Glenn Dubin learned about the arrangement and asked his wife to wind it down.

Though the foundation was named for her and administered by her mother, Celina Dubin was unaware of the setup, the source said. 

Some of Epstein's other philanthropic activities overlapped with Celina Dubin's interests, including a 2016 $10,000 donation to the Icahn School of Medicine at Mount Sinai, where Celina is now a third-year medical student. That year, Epstein also donated $50,000 to Harvard's Hasty Pudding Institute, according to tax documents from his foundation. Epstein published a press release in 2014 touting his donations to the theater club, which counted Celina Dubin as a member when she was a Harvard undergraduate. 

(Epstein had another connection to Hasty Pudding: He was friendly with the organization's chairman, the billionaire real-estate magnate Andrew Farkas, though he does not appear to have donated to the group before Celina Dubin went to Harvard.)

The Dubins have either denied or said they have no recollection of a host of allegations surrounding the Epstein saga, some of which were made under sworn testimony and unsealed in recent months, including an accusations that they hired a college student trained in erotic massage by Epstein for a massage at their Palm Beach home; that Glenn Dubin had sex with the Epstein accuser Virginia Giuffre after she gave a massage to Eva, and that they hired a Swedish teenager as a short-term nanny after she said she was forced into sexual activity on Epstein's island. 

"Glenn and Eva Dubin are outraged by the allegations in the unsealed court records, which are demonstrably false and defamatory," a spokesperson said in September, when the records became public. "The Dubins have flight records and other evidence that definitively disprove that any such events occurred."

New possibilities for Epstein's accusers

It's unclear whether the 2004 trust still exists. But experts contacted by Business Insider said a trust like it could be used to shield Epstein's assets from the 26 women who are suing his estate over allegations that they are victims of an extensive sex-trafficking operation. 

New York Law School's LaPiana said that Epstein's accusers might have grounds to try to access whatever money remains in the trust or others like it, which could amount to tens of millions of dollars — if lawyers can find it.

In mid-November, the executors of Epstein's estate, Indyke and Kahn, asked a judge in the US Virgin Islands to create a fund to compensate Epstein's accusers. Overseen by the New York-based attorney Jordana Feldman and the famous mediator Kenneth Feinberg, who worked on similar funds for victims of the September 11 terrorist attacks and other incidents, the fund would pay out accusers confidentially. In return, the women would give up their right to litigation, and the estate would have no say in which accusers received payments. 

Earlier this month, the lawyers asked a judge for "expedited approval" of the fund.

Arick Fudali, an attorney for the Bloom Firm, which is representing five Epstein accusers, said the very existence of the 2004 trust raises questions about what exactly is in Epstein's estate. He said it could also point to conflict-of-interest issues, since the estate's executors — Kahn and Indyke — were beneficiaries of the 2004 trust, at least as of 2014. 

"All the plaintiffs are frustratingly in the dark about the details of this program, what's in the estate, and what it includes," Fudali said. "[The trust] adds to the list of factors we're considering as to what route we'll choose. There's no precedent with a man like Jeffrey Epstein. He's the most prolific predator of our time. He's a real monster and destroyed the lives of countless women."

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• Several countries implemented negative interest rates to boost their economies in 2019, but the billionaire investor Stanley Druckenmiller told Bloomberg TV on Wednesday that the policy tools interfered with the US's economic balance.
• Druckenmiller called negative rates "the most anti-capitalist idea I could ever dream up," adding that "the financial crisis happened because of bubbles created by easy money."
• The former hedge-fund manager also critiqued President Donald Trump's trade-war policies, accusing the administration of cherry-picking the firms that have to pay tariffs and those that are exempt.
• Visit Business Insider's homepage for more stories.

Negative interest rates surged in popularity through 2019 as central banks worked to curb economic recession, but the billionaire investor Stanley Druckenmiller thinks they're a scourge to money managers.

President Donald Trump has repeatedly called for negative rates in the US, most recently tweeting that it "would be sooo great" if the Federal Reserve further cut its benchmark interest rate.

Druckenmiller rebuked the claim, saying in a Bloomberg TV interview on Wednesday that he believes the Great Recession was fueled by cheap borrowing costs and that negative rates would harm US markets.

"I will go to my grave believing that the financial crisis happened because of bubbles created by easy money," the former hedge-fund manager said. "And then this crazy president saying we need negative rates to compete with negative rates in countries where they clearly aren't working."

He added: "It's the most anti-capitalist idea I could ever dream up."

Read more:14 top Wall Street experts unveil their stock-market forecasts for 2020 — and tell you where to put your money

Negative interest rates encourage consumer spending by putting a price on savings deposits. Positive rates pay depositors in monthly interest, and negative rates oblige account holders to pay a monthly fee for their savings. The policy tool was initially used in short bouts to drive economic recovery, but more nations have sustained negative rates in bids to prop up economic growth.

The Fed lowered its rate three times in the second half of 2019, the first rate cuts since the financial crisis. While the central bank's actions helped boost US stocks to records through the end of the year, Druckenmiller said the policy complicated previously simple investments.

He told Bloomberg TV that the Fed had now moved too far in easing the interest rate and should now begin raising it as uncertainty from Brexit and the US-China trade war fades.

"This administration, with wondering about where the hell the next bomb is coming from, just doesn't allow me to take some of the positions I've taken historically where I just thought it was a one-way bet," the billionaire said.

Druckenmiller has a history of disagreeing with the Fed. He called for the bank to pause its rate hikes in a Wall Street Journal column last December, and he profited from his bet that the Fed would begin rate cuts this year.

The billionaire investor also railed against Trump's trade-war actions, accusing the administration of picking favorites with its tariff exemptions. While the "phase one" deal between the US and China should prevent further trade-war escalations, Druckenmiller said the handling of existing tariffs still interfered with capitalism.

"When you have a president of the United States who puts hundreds of billions in tariffs and then goes and picks and chooses individual economic actors who pay those tariffs and those who don't, it might as well be the politburo," Druckenmiller told Bloomberg.

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• M Science has cut several people from its 20-person data-science team this week, sources told Business Insider, and the firm's head of sales has been demoted to a part-time role.
• The cuts to the data-science team include the former Palantir data scientist Dipanjan Sen, while the former Citadel programmer Ajay Krishna is transitioning out of his role as head of data science and engineering.
• In this year alone, the firm has lost execs like its longtime head of sales, Mark Trowbridge, and its head of strategy, Daniel Entrup. 
• Click here for more BI Prime stories. 

A pioneer alternative-data seller is going through major upheaval. 

M Science's origins date back to 2002 as one of the first sellers of nontraditional data to financial firms in what has become a red-hot and fiercely crowded space. 

Now the company has cut several people from its 20-person data-science team, several sources said, including Dipanjan Sen, who was the data-science team lead and a former data scientist at Peter Thiel's Palantir. Ajay Krishna, the head of data science and engineering at the firm and a former employee at Ken Griffin's Citadel, is transitioning out of his role.

Gerard Varjacques, the company's global head of sales, has transitioned to a part-time role, according to several sources, with M Science CEO Mike Marrale picking up his responsibilities.

The firm has created a chief-technology-officer position for the first time, which will be filled by the former Google employee Ben Tallman, who joined M Science in February as the head of engineering and infrastructure.

Varjacques was also hired in February after the departure of Mark Trowbridge, the longtime head of sales. The firm's head of strategy, Daniel Entrup, also left the firm this year. 

Jefferies and M Science declined to comment.

Krishna led a pivot in the data-science group when he joined M Science at the beginning of 2017, sources said, as the company began to build out a data-science team separate from the research function. Krishna's team began to build its own data products to sell, most prominently Swipe, a database that tracks consumer transactions and predicted spending habits using a machine-learning model.

M Science struggled to sell the product, a source familiar with the dataset said, as competitors were already entrenched in the space. The source told Business Insider that Swipe's data was also often delayed compared with competitors.

"We are changing the transaction data landscape with M Science's SWIPE," Krishna said in a statement announcing the launch in July 2018. "Using extensive feature engineering and machine learning, we identify key drivers from the data to provide multiple viewpoints to our clients."

M Science has more than 15 years of experience in the alt-data space

Established as Majestic Research in 2002, the company was one of the first to focus on the collection and analysis of nontraditional datasets, specifically credit-card usage.

Tony Berkman, cofounder and then-CEO of Majestic Research, is considered by some to be the godfather of alternative data. He now serves as a managing director at Two Sigma.

In October 2010, Majestic Research was acquired by the brokerage ITG for $56 million. Less than six years later, ITG spun off Majestic Research, renamed M Science, to Leucadia National Corp., a division of Jefferies, for $12 million, though it was not announced which parts of Majestic Research remained at ITG. 

In recent years, M Science has doubled down on its efforts in the alternative-data space. The company had a string of product announcements in 2019, the most recent of which came in December and was a dataset focused on the adoption of 5G and the devices connecting to the network. 

But as investors, particularly quantitative hedge funds, have gotten more sophisticated in their digestion of alternative datasets, M Science's black-box-type product has been a tougher sell, according to a second source familiar with the matter.

Quants found it difficult to incorporate the company's aggregated datasets into their models without knowing what was inside them to ensure there was no overlap with other datasets they were already using, the second source said.

The market for alternative data, which Deloitte projects will exceed $7 billion in 2020, has become crowded, and there have been some shakeouts already. Investors' increased demand for unique nontraditional datasets has not necessarily guaranteed success for all of those in the space. 

In September, Business Insider reported the alternative-data company Thasos fired two-thirds of its staff, and its then-CEO and cofounder, Greg Skibiski, stepped down after the firm faced issues making money selling to its main financial clients. 

In addition to the competition that comes from new startups entering the space, traditional data companies are have also moving into alternative data.

In 2018, Nasdaq acquired the alternative-data company Quandl. Shortly thereafter, Bloomberg announced the launch of its own alternative-data store.

Got a tip? Contact Dan DeFrancesco via email at ddefrancesco@businessinsider.com, Signal (646-768-1650) or direct message on Twitter @dandefrancesco. Contact Bradley Saacks via email at bsaacks@businessinsider.com, Signal (919-816-5537) or direct message on Twitter @SaacksAttack. 

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• The $3.3 trillion hedge fund industry saw several big names call it quits in 2019, as Appaloosa founder David Tepper and Moore Capital chief Louis Bacon both decided to turn their funds into family offices, while Bridgewater's co-CEO Eileen Murray announced she is leaving her post next year. 
• Other names, like BlueMountain co-founders Stephen Siderow and Andrew Feldstein, were partially pushed out of the industry thanks to poor performance.
• In the last couple years, big names like Jonathon Jacobson, Leon Cooperman, Jason Karp, John Griffin, Eric Mindich, and more have closed down their funds. 
• Click here for more BI Prime stories.

Jonathon Jacobson, the billionaire founder of Highfields Capital Management who returned outside capital last year, reportedly wasn't having fun anymore when he closed his fund. 

David Tepper, however, looks like he's having the time of his life. 

The billionaire founder of Appaloosa Management announced that he was turning his fund into a family office in May, with the understanding that he'd be spending more time focusing on the football team — the NFL's Carolina Panthers — he recently bought. 

Not only has he put his stamp on Panthers already, firing the firm's long-time coach, but Tepper has also brought a Major League Soccer team to Charlotte. According to The Charlotte Observer, Tepper — who was known for having a set of brass testicles on his office desk at New Jersey-based Appaloosa — teased the mayor of Charlotte at the announcement ceremony for the new team, imitated Elvis, and predicted that the soccer games will be "a little bit of a party."

"Charlotte loves a party. And we're going to bring them a party," he said. 

While not every big name that has stepped back or left the hedge fund industry this year is living it up like Tepper, there are still notable things on the horizon for people like Eileen Murray and Louis Bacon. 

David Tepper

Tepper is probably the biggest name heading out of the industry, and one of the few remaining managers who made big bets on any asset class he found favorable. 

While the May announcement stated he was returning outside capital, a Bloomberg piece from October notes that Tepper will keep the fund open for roughly 15 investors who will have between $1.25 billion and $1.5 billion in the fund. The article described it as a part of the process for Tepper to transition to a family office. 

Already, there have been people leaving Tepper's orbit to start their own fund. Andrew Casino, a partner at the firm, has started Baymount Capital in Florida, and Peter Rosenblum will launch 140 Summer Partners next year. 

Eileen Murray

Bridgewater co-CEO Eileen Murray, the most senior woman in the male-heavy hedge fund space, did not end up becoming the first woman to lead one of the major American banks, despite her name being floated for the Wells Fargo job. 

But she did announce she is leaving Ray Dalio's shop next year, where fellow co-CEO David McCormick will become the sole CEO. 

She's not retiring, but instead moving onto "the next chapter of her career."

At the Project Punch Card conference in December, she declined to say what exactly she is going to do beyond saying that'll "be with people I really like" on a topic she is passionate about.  

Louis Bacon

Billionaire Louis Bacon told investors in December that he is returning outside capital after nearly 30 years running Moore Capital, named after Bacon's middle name. The letter to investors stated that the flagship fund returned over 21,000% since inception, despite disappointing returns over the last couple of years.

The firm plans to launch individual funds run by "our best performing portfolio managers" in macro and long-short equity, but Bacon himself will step back from managing the money. Bacon named two portfolio managers, Joeri Jacobs and Erik Siegel, who have had success in running individual funds on the Moore platform before. 

Bacon's next move is unknown, though he is a big conservationist. He gave a 90,000-acre ranch to conservation efforts in 2012.

The macro closures didn't stop at just Bacon though; a trio of traders that used to work for Moore and started the fund Stone Milliner in 2012 are returning capital to their investors after a run of poor performance. 

Thomas Kempner

The co-founder of one of Europe's biggest hedge funds, Thomas Kempner is retiring when the calendar changes, he announced in April of this year. 

Kempner had been running Davidson Kempner since 2003, when co-founder Martin Davidson retired after starting the fund in 1983. Kempner had co-run the firm with Tony Yoseloff since 2018 in preparation for Kempner's retirement.

Kempner will consult and keep his family's wealth in the firm until 2024, according to a letter to investors that Bloomberg saw. 

Andrew Feldstein and Stephen Siderow

BlueMountain's co-founders closed several hedge fund strategies and became a part of insurer Assured Guaranty this year.

Andrew Feldstein, who has been described as one of the generation's top fixed-income investors, is now Assured Guaranty's asset management head, but closed BlueMountain's flagship fund to focus on CLOs. Stephen Siderow, Feldstein's co-founder, is leaving the firm at the end of the year.

Prior to the sale, the firm had also closed its discretionary long-short strategy as well as its systematic equity fund. 

When the manager announced the closure of its flagship fund, the $2.5 billion Credit Alternative fund, the firm said it would focus on launching strategies "aligned with the firm's focus on collateralized loan obligations (CLOs) and structured finance."

"Such strategies will include the areas of CLO equity tranches, as well as asset-backed securities focused on private debt investments in specialty finance companies and assets," it said.  

Marcos López de Prado

Marcos López de Prado was one of the biggest wins in the talent war by AQR when the Greenwich-based manager snagged the machine-learning expert in 2018. 

Less than a year later, the academic left Cliff Asness's firm. Bryan Kelly, a fellow academic from Yale, was put in charge of AQR's artificial intelligence unit. 

"During my tenure, I enjoyed collaborating with the innovative team at AQR on machine learning tools and techniques, and I am confident that AQR will continue to succeed for decades to come," López de Prado, a principal at the firm, said to Bloomberg after he left AQR.

He has since founded True Positive Technologies, which partners with asset managers to help them get "to the 21st century,"according to the firm's website. 

Stephen Mandel Jr.

Tiger Cub and billionaire Stephen Mandel Jr. is still managing the business of his long-running hedge fund, Lone Pine Capital, but announced at the beginning of 2019 that he was stepping back from managing money. 

His firm, which recently told investors its thoughts on value Investing's future and healthcare in the United States, manages $19 billion across several funds. 

Mandel has flown under-the-radar compared to more colorful contemporaries, but the industry has recognized his talent for stock-picking.

In a Barron's story after he announced he would not longer be investing, fellow billionaire hedge fund manager Seth Klarman told the publication that Mandel was "the best industry analyst I've ever met, who became the best long-short hedge-fund manager of his generation." 

• The Bank of England says it is investigating how hedge funds were able to pay thousands of pounds to listen to broadcasts of its briefings before they were made public.
• The misused audio of briefings gave the traders a head start of a few seconds on market-moving information, The Times reported.
• The central bank discovered an audio feed handled by one of its third-party suppliers was "misused" and shared with a market news service, which sold access to traders for £2,500 to £5,000 ($3,278 to $6,555) per press conference on top of a subscription fee, the newspaper said. 
• "This wholly unacceptable use of the audio feed was without the bank's knowledge or consent, and is being investigated further," the BOE said in a statement.
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The Bank of England says it is investigating after a report that hedge funds paid for access to briefing broadcasts that the rest of the public heard on a delay, giving the traders early access to market-moving information.

The central bank discovered one of its third-party suppliers was misusing an audio feed of its press conferences and distributing it to high-speed traders, following inquiries by the Times of London.

The feed gave the traders a head start of up to eight seconds on rivals watching the official broadcast, The Times reported. 

Comments made by the bank's governor, Mark Carney, and other senior officials often move pound and bond markets. In the algorithm-driven world of trading where buying and selling occurs in tiny fractions of a second, eight seconds can be a significant leg-up in gaining an edge.

"We have recently identified that an audio feed of certain of the Bank press conferences — installed only to act as a back-up in case the video feed failed — has been misused by a third party supplier to the Bank since earlier this year to supply services to other external clients," the Bank of England said in a statement.

The unnamed supplier shared the feed with a market news service that sold access to traders for £2,500 to £5,000 ($3,278 to $6,555) per press conference on top of a subscription fee, The Times reported.

The Bank of England has disabled the supplier's access to the audio feed, it said. "This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further."

The third-party supplier "will no longer play any part in any of the Bank's future press conferences," the BOE said.

The bank added the decisions of its policy committees weren't compromised by hackers. It is scheduled to set UK interest rates today for the final time this year, although no changes are expected.

Here is the Bank of England's statement in full:

"Following concerns raised with the Bank, we have recently identified that an audio feed of certain of the Bank press conferences - installed only to act as a back-up in case the video feed failed - has been misused by a third party supplier to the Bank since earlier this year to supply services to other external clients. This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further.

On identifying this, the Bank immediately disabled the third party supplier's access. As a result, the third party supplier did not have any access to the most recent press conference and will no longer play any part in any of the Bank's future press conferences.

The Bank operates the highest standards of information security around the release of the market sensitive decisions of its policy committees. The issue identified related only to the broadcast of press conferences that follow such statements."

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• The hedge fund industry saw more closures than openings for the fifth year in a row in 2019, Bloomberg reported Monday, citing data from Hedge Fund Research Inc.
• Investors are quickly fleeing the high-risk funds for cheaper vehicles as the record-long bull market continues to boast steady gains.
• The S&P 500 is up about 29% year-to-date, while the Bloomberg Equity Hedge Fund Index has only gained 10% in the same period.
• Among the funds closing their doors to outside investment in 2019 include Appaloosa, Moore Capital, Vinik Capital Management, and Arrowgrass.
• Visit the Business Insider homepage for more stories.

The hedge fund industry saw more closures than openings for the fifth year in a row in 2019 as dismal returns and lofty fees pushed investors away, Bloomberg reported Monday, citing data from Hedge Fund Research Inc.

The $3.3 trillion industry saw major players like Appaloosa founder David Tepper and Moore Capital CEO Louis Bacon turn their funds into family offices in 2019. Tepper announced in May he'd turn his focus to the NFL's Carolina Panthers, a team he recently bought. He is also backing the creation of a Major League Soccer team in Charlotte, North Carolina.

Bacon told investors in December that he'd return outside capital after helming Moore Capital for three decades. In a letter to investors explaining his decision, the CEO noted Moore returned more than 21,000% since its creation in 1989. The firm still plans to launch individual funds run by its portfolio managers.

More than 4,000 funds have liquidated assets over the past five years, according to Bloomberg, citing Hedge Fund Research data. Of the five consecutive years of net fund closures, 2016 marks the only year with more closures than 2019.

Investors fled the high-risk funds for cheaper vehicles amid the record-long bull market. Members have pulled $81.5 billion from hedge funds in the year through November, Bloomberg reported citing eVestment data, more than twice the amount pulled from funds in 2018.

Here are some of the biggest firms to shut their doors to outside investment in 2019:

• Appaloosa Management
• Moore Capital
• BlueMountain's flagship and quant funds
• Arrowgrass
• Vinik Asset Management
• Amplitude

Hedge funds were also unable to match the S&P 500's rapid growth through the year. The index is up roughly 29% year-to-date and on track to post its best yearly gain since 1997.

The hedge fund industry, which relies on risky investments to outperform the general stock market, struggled to keep up. The Bloomberg Equity Hedge Fund Index is up just 10% this year.

Now read more markets coverage from Markets Insider and Business Insider:

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Buzzy UK challenger bank Monzo is in talks to raise $130 million in new funding as London's fintech race heats up

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• There are fewer public companies to invest in, and hedge funds have been desperate to match the surging markets, forcing many managers into the same trades and stocks. 
• In the 2010s, the stock that generated the most alpha for hedge funds was Apple, according to Novus, a portfolio analytics company. Other well-known tech names like Amazon, Facebook, Netflix, and Microsoft were among the top 10. 
• Investors increasingly list crowding as a concern, fearful of paying top-quartile fees for returns that matches the rest of the industry's. 
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The hedge fund trades of lore — like George Soros' big bet against the pound or John Paulson's wager against US housing  — were moves that no one saw coming, and examples of the cunning instinct of an expert of the markets. 

These days, though, the stock market moves making the most money for hedge funds are ones that don't require years of experience deciphering balance sheets or a Wharton degree.

Apple has been the stock that has generated the most alpha for hedge funds in five of the last 10 years, including 2019, according to Novus, a portfolio analytics company.

Amazon was the stock that produced the most alpha for managers in 2015, and was also the third-best stock pick for the decade by hedge funds. The top pick was Apple, and Facebook, Netflix, and Microsoft were among the top ten.

It's not just that these companies grew rapidly over the last ten years, benefiting all shareholders. Hedge funds lost their touch in finding little-known companies set to explode, according to Novus data.

On average, funds lost money on trades in companies with market caps below $2 billion over the last decade.

"We can see that stock-picking success has a relatively proportionate relationship to market cap," a Novus blog post reads. 

Hedge funds, which ended the decade with another year of outflows and big-name closures, have struggled to beat the surging market for years now, and while the industry's high fees steadily tick down, they're still expensive compared to cheap index funds.

Just to keep pace, hedge funds have piled into some of the biggest names in technology, canceling out their advantages over one another. 

JPMorgan's survey of more than 200 institutional investors from last year found that half of respondents listed crowding as their primary concern, with 82% blaming "limited opportunities" for the industry's recent underperformance. 

The limited opportunity set is struggling to expand. The private markets are flush with cash — including from some of the same hedge funds that are struggling to break free in the public markets— and unicorns with no plan for turning a profit anytime are not interested in putting up with the scrutiny that has cut the valuations of Uber and Lyft, and nearly bankrupt WeWork. 

Hedge funds that have been riding the momentum trades in tech and telecommunications for years are exposed to a market reversion or a quick unwinding of trades by quants slams the sector.

September 2019 had big-name managers like Coatue, Lone Pine, and Winton Group losing big in a matter of days because of a drop in momentum stocks. 

Still, as one discretionary manager told Business Insider, "you see performance-chasing in places that have been successful" because people both like the companies and need to keep investors happy. Warren Buffett has even increased his stake in Apple in the third quarter of 2019. 

"I just wonder whether everyone stays the course or people get scared out of some of these more consensus positions," the manager told Business Insider. 

Still, the days of uncovering a small gem of a company trading for less than what it is worth — a value investing technique that money managers have ridden to riches for decades — may not last for much longer.

Stephen Mandel Jr.'s Lone Pine Capital told investors that "structural changes in the economy" brought on by technology might make some companies appear like a good investment, even when their time has passed. 

"The backward-looking nature of factor investing thus overstates the value of 'value.' Past is not prologue," the letter reads. The firm said it took advantage of the momentum slide in September to buy more of a favorite name: Netflix. 

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• The hedge funds that dominated 2019 included big names like Bill Ackman, David Einhorn, and Dan Loeb.
• Spin-offs from funds like Citadel, D.E. Shaw, and Viking also made positive headlines, carving out names for themselves in the process.
• On the other end of the spectrum, Ray Dalio's Bridgewater slipped, and one of Pimco's biggest hedge funds stumbled.
• Click here for more BI Prime stories. 

Big names closed shop. Billions were pulled out of the industry. Fees continued to drop. 

But 2019 wasn't all bad for hedge-fund managers. 

Once embattled stock pickers like Bill Ackman and David Einhorn had bounce-back years, with Ackman posting record returns.

Activists like Third Point, Elliott, and Starboard Value saw big campaigns go their way. And Steve Cohen's first full year of trading after his ban from regulators beat several rivals — and the billionaire is set to buy his favorite baseball team. 

That said, there were funds that slipped and stumbled. Short sellers were pressed again as the market surged. Ray Dalio stumbled for the first time in years, and Pimco's flagship hedge-fund offering lost money. 

Hot: Stock pickers that bounced back

Pershing Square, with returns topping 50% for the year, was one of the big winners of 2019, as founder and billionaire Ackman returned the firm to its roots.

With a portfolio that includes only long positions, Ackman is avoiding the drawn-out activist battles that landed him and the firm in trouble during his campaign against Herbalife. 

Einhorn's Greenlight Capital, on the other hand, is not shying away from a fight with one of the most famous CEOs and companies. Notching double-digit returns a year after he lost more than 34%, Einhorn has continued his campaign against Elon Musk and Tesla, culminating in a presentation at the Sohn Investment Conference over the summer, which played a stream of promises by made by Musk. 

While Greenlight's returns surely made investors happy, Musk has so far been unaffected by Einhorn's campaign, as Tesla's stock has shot to more than $440 a share. 

Not: Dalio leads the big names who struggled

Dalio lost money and one of his top executives in 2019.

The billionaire founder of Bridgewater Associates is losing his firm's co-CEO Eileen Murray in the first quarter of this year, and his firm's flagship fund lost 2% through November, trailing rivals like Paul Tudor Jones. 

Meanwhile, Pimco's flagship hedge fund, the $3 billion Global Credit Opportunity fund, fell by double digits through October last year. 

There were big closures as well, like Louis Bacon's Moore Capital and David Tepper's Appaloosa. Another big name, Jeffrey Vinik, realized just how hard the industry is now. He closed his new firm after not being able to raise sufficient capital. 

Hot: Spin-offs from big funds making their own name ...

D.E. Shaw is one of the most famous and successful hedge funds in history. Ken Griffin's Citadel has been so successful that he was able to buy the most expensive apartment sold in US history, and he's not even using it as his main residence. And O. Andreas Halvorsen's Viking Global Investors has an argument for the top Tiger Cub, though funds like Coatue, Tiger Global, and Lone Pine might disagree. 

But in 2019, some of the funds making the most noise were run by alumni of these industry giants. 

Brendan Haley's Holocene Advisors, for example, has pulled in billions of assets since he launched in 2017 after serving as Griffin's equity head. Parvinder Thiara's Athanor Capital is one of the most talked-about new macro shops out there, and he was selected by the Sohn Investment Committee as a rising star.

D1 Capital, started by Viking's former Chief Investment Officer Daniel Sundheim, has surged thanks to a bullish view on Netflix. Sundheim's shop has nearly doubled its assets— from $4 billion to more than $7 billion — in a year and a half. 

Alumni from these shops, particularly Citadel and Viking, have the potential to dominate headlines in 2020 as well. Ben Jacobs, who replaced Sundheim at Viking, is set to launch his Anomaly Capital later this year, while Citadel alumni like Jack Woodruff, Richard Schimel, Michael Rockefeller, and Karl Kroeker launched last year.

Not: ... with one notable exception

A spin-off and protégé of Ackman, Mick McGuire is getting out of the game after a disastrous 2019.

McGuire's Marcato Capital, which made waves when it led an activist campaign against Buffalo Wild Wings, is planning to return capital to investors after a multiyear run of poor performance. 

After nearly a decade, Marcato is closing. 

Hot: Big-name activists taking on big-name companies

Marcato Capital not withstanding, 2019 was a good years for many activists. 

Dan Loeb's Third Point notched returns of 14.6%, driven by the firm's big stake in Sony, which has battled the firm over the future of the company. Elliott Management has found a receptive audience to its campaign against AT&T, as company executives moved quickly to meet demands from Jesse Cohn.  

Starboard Value's investment into Papa John's has also paid off as the stock has soared by more than 50% since the activist fund decided to invest in the pizza chain. This, of course, has not stopped John Schnatter, the chain's founder, from saying the firm changed the recipe. 

Medium: Short sellers in a surging market

To break even as a short seller when the market breaks records is impressive enough, but the double-digit return for Carson Block's Muddy Waters Capital in 2019 did even more. 

Block is expanding his firm and moving it to New York, picking up a bigger media profile on the way there with his faux awards show, the Fidouchies. 

But Block was the exception for short sellers in 2019. One of the most popular companies to short, Tesla, soared, costing investors $2.9 billion. Russell Clark's Horseman dropped 35% and is closing its European fund.

Hot: Steve Cohen is back

Cohen's ban from managing outside money was lifted about two years ago now, but 2019 was the first full calendar year for Point72 to trade with investor capital.

The firm didn't disappoint, besting several multistrategy rivals with returns of about 13% through the end of November.

The bigger news for Cohen came later in the year, when it was announced he would buy his favorite baseball team, the New York Mets. While David Tepper stepped away from the hedge-fund game to focus on his football team, Cohen told investors that the purchase wouldn't distract from his true focus, investing. 

Hedge fund and private equity managers that both own a sports franchise and continue to run their firms include Avenue Capital's Marc Lasry, who co-owns the Milwaukee Bucks, and Apollo's Josh Harris, who owns the Philadelphia 76ers. 

• $50 billion manager D.E. Shaw posted returns of 10.5% for its flagship Composite fund in 2019, according to a source familiar with the matter.
• The firm's 16-year-old, macro-focused Oculus fund returned 11.8%, the source said. 
• Both funds beat the average hedge fund, which returned more than 8%, according to Hedge Fund Research, but trailed well behind the overall stock market. 
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D.E. Shaw, the $50 billion hedge-fund manager founded by computer scientist David Shaw, returned 10.5% in its flagship Composite fund in 2019, a source familiar with the firm's performance said.

That beat the average hedge fund, which returned just over 8% in 2019 according to Hedge Fund Research, but trailed the overall stock market, which returned more than 33% including dividends. The flagship fund nearly matched its 2018 returns of 11.2%. 

The firm's macro-focused fund, Oculus, returned 11.8% last year, the source said.

D.E. Shaw's solid performance came in a year with a fair amount of internal turmoil over a decision to ask employees to sign non-compete agreements for the first time.

Business Insider reported in August that the firm improved the payout before the deadline to sign— a move insiders felt was done to encourage more people to agree to the contract.

The deadline for the non-competes, however, did not cause a mass exodus of talent. 

The firm's flagship Composite fund includes computer-run and human-run components, and has been around since 2001. The fund has posted an annual return of 11.3% since its launch, while the Oculus fund has posted an annual return of 11.7% since its launch in 2004. 

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• Billionaire Larry Robbins' Glenview Capital had a banner year, posting returns of nearly 30% in its flagship fund when the average hedge fund returned just over 8%, according to Hedge Fund Research
• Glenview had lost billions in assets since 2017 after poor performance, though the firm said most of the redemptions have come from its long-only fund. 
• While the firm more than tripled the returns of the average hedge fund, it still trailed the overall stock market, which finished 2019 up 33%, including dividends. 
• Click here for more stories from BI Prime. 

Glenview Capital dominated 2019, finishing the year with returns that more than tripled the average competitor. 

Larry Robbins' 29.91% returns for the year in his flagship fund marked a complete turnaround from 2018, when the firm lost 16% in its flagship fund and investors redeemed billions from the firm's hedge funds and long-only vehicle. 

The $7.1 billion firm is back on the leaderboard in a year when the industry had its best showing, on average, in a decade, posting returns of more than 8%, according to Hedge Fund Research. 

Glenview's flagship fund did not top the overall stock market, which surged 33%, including dividends, in 2019, though the firm's smaller Opportunity Fund posted returns of more than 50% for the year, according to a source close to the firm. 

A spokesman for the firm declined to comment.

At the Sohn Investment Conference this year, Robbins focused his talk on healthcare companies, saying HMOs, or health maintenance organizations, like Cigna and Humana were severely undervalued. He predicted that Medicare-for-all, a policy idea that a majority of Americans support, would never take hold thanks to the Senate's political make-up. 

He wasn't totally bullish on the healthcare industry, though, recommending people to short different pharmaceutical indices because of the President's ability to unilaterally reduce drug prices. He also said he was shorting 3M and Chemours because of the lawsuits they were facing from different states over pollution. 

SEE ALSO: Here are the hedge-fund managers to watch in 2019 as the industry battles poor performance

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• Citron Capital, the new hedge fund led by famed short-seller Andrew Left, gained 43% net of fees in 2019, Reuters reported Monday, citing a letter to investors. 
• The fund includes both long and short positions. In 2019, the average exposure was 75.8% long and 80.3% short, Reuters reported, citing Left's letter to investors. 
• Left also told investors that he's sticking to his bet against Peloton. In December, he gave the company a $5 price target, betting it will fall as much as 83% in a year. 
• Read more on Business Insider. 

Citron Capital, the new hedge fund led by Andrew Left, had a solid first year. 

Left, the famed market-moving short-seller and leader of Citron Research, told investors on Monday that the hedge fund had a net return of 43% in 2019, its first year open, Reuters reported.

The fund contains both long positions on companies Left sees poised to gain, and short positions against companies he thinks will fall. In 2019, the average exposure was 75.8% long and 80.3% short, Reuters reported, citing Left's letter to investors. 

Included in Left's long positions were Bausch Health, RH, and Snap, according to the report. On the short side, Left has bets against Ligand Pharmaceuticals, Jumia Technologies, and Grand Canyon Education. 

Citron Research also recently published a report betting against Peloton, following the stock's December selloff after backlash against an awkward holiday add shook investor confidence. Left slapped the company with a $5 price target, implying that the stock could shed as much as 83% this year from where shares traded on Monday's close. 

He's sticking to his bet against the exercise-bike maker, according to Reuters. His price target of $5 would still value Peloton between $1.5 billion and $2 billion, he wrote in a December note.

Left began laying the groundwork for Citron Capital in 2018, after roughly two decades of investing only with his own money, Reuters reported. While Citron did not disclose how much is currently in the fund, raising outside capital has given Left more ammunition to go against some of the biggest companies in the US, according to Reuters. 

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• Billionaire Bill Ackman's hedge fund returned 58% in 2019.
• The 2019 performance was a fantastic rebound for the fund, which posted negative net returns each year from 2015 to 2018. 
• Here are the top eight publicly disclosed holdings in Ackman's hedge fund, according to the most recent SEC filings. 
• Read more on Business Insider.

After strong performance throughout the year, Bill Ackman's activist hedge fund Pershing Square Holdings ended 2019 with a net performance of 58.1%, the company said in its December portfolio update. 

Some of the outperformance — the S&P 500 returned 29% in the same time frame — was credited to none other than the Oracle of Omaha, Warren Buffett. In 2019, Ackman bet big on Berkshire Hathaway, run by Buffett; in August, Berkshire Hathaway shares accounted for roughly 11% of the fund's net asset value, Ackman told investors.

But Ackman had other bets in 2019 that also fueled the outsized returns for the fund.

Those other bets included  fast-food companies Starbucks and Chipotle, home-improvement retailer Lowe's, and hospitality company Hilton Worldwide Holdings. In December, the fund announced it had purchased a stake in life-sciences equipment maker Agilent Technologies.

Here are the top eight publicly disclosed positions in Ackman's hedge fund, as of September 30, according to SEC filings. The holdings are ranked from lowest to highest value. 

8. The Howard Hughes Corp

Ticker:HHC

Total shares held by Pershing Square: 1,194,793

Investment value at purchase: $155 million 

Source: SEC filings 

7. Agilent Technologies

Ticker:A

Total shares held by Pershing Square: 2,916,103

Investment value at purchase: $223 million 

Source: SEC filings 

6. Starbucks

Ticker: SBUX

Total shares held by Pershing Square: 9,313,890

Investment value at purchase: $823 million 

Source: SEC filings 

5. Berkshire Hathaway

Ticker: BRK.B

Total shares held by Pershing Square: 4,015,594

Investment value at purchase: $835 million 

Source: SEC filings 

4. Lowe's

Ticker: LOW

Total shares held by Pershing Square: 8,613,212

Investment value at purchase: $947 million 

Source: SEC filings 

3. Hilton Worldwide Holdings

Ticker: HLT

Total shares held by Pershing Square: 10,556,805

Investment value at purchase: $982 million 

Source: SEC filings 

2. Restaurant Brands International

Ticker: QSR

Total shares held by Pershing Square: 15,084,304

Investment value at purchase: $1 billion 

Source: SEC filings 

1. Chipotle Mexican Grill

Ticker: CMG

Total shares held by Pershing Square: 1,724,310

Investment value at purchase: $1.4 billion 

Source: SEC filings 

• BlackRock's 23-year-old Obsidian hedge fund bested the average hedge fund, returning more than 13% in 2019 even after losing money in August. 
• The fund, managed by Stuart Spodek, is fixed-income focused. The returns lagged the S&P and the overall bond market. 
• The fund lost nearly 3% in August, Business Insider previously reported.
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BlackRock's long-running flagship hedge fund Obsidian returned more than 13% in 2019, a source tells Business Insider. 

The fund, managed by Stuart Spodek, has roughly $1.7 billion in assets, and beat the average hedge fund, which returned more than 8% in 2019. Obsidian recovered from an August when it lost 3% in the month, putting its returns, at that point in the year, at 7.5%, Business Insider previously reported. 

The fund invests in rates, mortgages, and corporate credit, though its performance trailed both the S&P and the overall bond market. Still, last year was a bounce back one for the fund, which lost money in 2018. In fact, the performance in 2019 was the highest the 23-year-old fund has recorded in at least five years. 

Larry Fink's BlackRock, the world's largest asset manager, has a hedge fund suite that includes equity, event-driven, risk premia, and other strategies, the firm's website states. A spokesman for the manager confirmed the performance figures of the Obsidian fund. 

Read more: Billionaire Larry Robbins' Glenview Capital crushes 2019 with eye-popping returns after a year that lost the firm billions

Read more:$50 billion D.E. Shaw's flagship fund posted a 10.5% return in 2019, besting the average hedge fund

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• Vista Equity Partners paid nearly $100 million to buy alternative data company 7Park Data at the end of 2018. Since the acquisition, the firm has added to the sales team as it attempts to pivot away from selling the reports that the company was founded on.
• Sources tell Business Insider that 7Park added a "customer success" team after the acquisition that focused on selling machine-learning software for raw data instead of reports made by the firm's research team.
• The alternative data company has churned through senior leadership since the acquisition, however, losing COO Jim Sharpe, HR head Cori Weintraub, and data-science lead Ankur Patel in 2019.
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Alternative data's breakout year in 2018 brought interest from deep-pocketed investors hoping to cash in on the gold rush. But with new funding comes high expectations — particularly in the ultra-competitive and increasingly crowded world of alternative data.

7Park Data, an alternative-data seller founded in 2012, can attest to that. Business Insider has learned the New York-based company has seen executive shakeups and a big pivot following its acquisition by Vista Equity Partners in December 2018.

The New York-based startup built its brand collecting raw, unstructured data sets, such as credit card transaction data, and developing insights and research investors could use in their strategies. However, with the new ownership also came plans to expand beyond its roots as it looked to position itself as more of a software-as-a-service provider, helping clients better manage and analyze their own data with artificial intelligence-based products.  

The transition comes as sellers of alternative data consider ways to expand or alter their business to stay ahead of the curve, or risk falling behind.  

Former employees and industry sources paint a picture of a high-pressure environment following the change in ownership, where new hires had a short runway to succeed and veterans were given quotas far beyond their best previous performances. 

Spokespersons for 7Park Data and Vista Equity Partners declined to comment on the record. 

Sources say the firm was bought by Vista for nearly $100 million when it had roughly $15 million in recurring annual revenue. A presentation created by bankers from Raymond James on the company in fall of 2017 included a table that found the "near-term data pipeline" had the potential to be worth between $52 million and $64 million in annual recurring revenue.

The presentation also notes 92% of its revenue from hedge funds like Coatue, Citadel, Tiger, and Balyasny — a challenge for sales staff, a former employee said, because funds can cut ties at a moment's notice. 

There has been a lot of turnover in the sales team, according to multiple sources. Throughout 2019, the business development team was a revolving door with at least five employees departing the team of roughly 12 people. Staff exits last year overall were on par with 2018.  

Jim Sharpe, who joined 7Park Data as chief operating officer in June 2019, left the firm less than six months into his role and doesn't even list the firm on his LinkedIn profile. Cori Weintraub, 7Park's VP of human resources, is also no longer with the firm. 

The data science team wasn't immune to the disruptive force of a new owner, either. Ankur Patel, vice president of data science, left the firm at the end of 2019 after a little more than a year. Patel is now working with a friend on an artificial intelligence consultancy, and in the process of raising money for another startup. 

Sharpe and Weintraub did not return requests to comment in time for publication. Patel declined to comment on the record. 

To be sure, key members of 7Park's management team have remained in addition to founders Brian Lichtenberg and Alex Nephew, who serve as CEO and president, respectively. Eric Christianson, 7Park's chief financial officer, and Nick DeSalvo, vice president of sales, have both been with the company since 2014. Rishit Shah, the chief product officer, joined in 2016. 

A press release on a new product led by former GLG executive Sharpe, an alt-data marketplace called Discover, quoted the then-COO as saying he's "had multiple opportunities to build teams that drive growth from early stage to growth phase and beyond."

"I'm excited to bring that experience to bear as 7Park Data enters a new era, fueled by their partnership with Vista Equity Partners and the immense appetite for analytics-ready data to drive better business decisions." 

Vista's track record

Sources who either spent time at 7Park or working with it point to its acquisition by Vista Equity Partners as a turning point for the alternative data company founded by Lichtenberger and Nephew in 2012. A veteran of the PE space, Vista, which was established in 2000, has more than $52 billion of investments in software, data, and tech companies. 

In that time, the company has had its fair share of big wins. In September 2018, it sold Marketo to Adobe for $4.75 billion, netting over a $3 billion profit in just two years. 

7Park Data represented Vista's first foray into the world of alternative data, and came at a time when the industry was peaking, leading mainstream players to take notice to the business of selling non-traditional data.

A week before Vista's announcement, Nasdaq acquired alternative data company Quandl. A few months later, data giant Bloomberg threw its hat into the ring as well, launching an alternative data marketplace. Fellow traditional data provider FactSet built out its own offering in 2018. 

The rise in value of unique, unstructured data sets such as satellite images or web traffic came as Wall Street's appetite for all forms of data was growing. Previously of interest only to the most quantitative hedge funds, by late 2018 even fundamental firms were considering how incorporate alternative data into its strategy. 

As a result, Lichtenberger and Nephew, who serve as 7Park's CEO and president, respectively, cashed in on the gold rush. The $100 million deal was the culmination of incredible growth for 7Park, which had raised a $6 million Series B in May 2017 at a valuation of roughly $41 million, according to PitchBook. 

However, from the moment the deal was finalized, there was a noticeable shift in how the company operated. Employees were given quotas as much as double their best previous year, according to a former employee.

Alt-data's tough 2019

Higher expectations were coupled with a change in focus for the sales team in 2019, sources said, which had to begin selling software services and tools, while de-emphasizing the research reports that many had made their initial relationships based off of.

Several sellers of alt data had a tough 2019. Success has proved fleeting, especially as the market has become increasingly crowded. In September, Business Insider reported major departures, including the CEO, at alt data company Thasos.

Even the most veteran players have not been immune. Jefferies-owned M Science, one of the earliest sellers of alt data, faced major overhauls of its own and cut data-science jobs in December. 

At the end of 2018, right before the sale to Vista, sources said the firm had roughly 130 financial services clients, which made up roughly 90% of the firm's revenue, all of which paid for the reports generated by the research team. Clients included hedge funds like Tiger Management, Citadel, Coatue, and Balyasny, sources say.

But in the new year, the focus, a source said, was to de-prioritize research, and focus on software. The new "customer success" team, led by Rebecca Gordon, focused on selling software like machine-learning tools, one person said, and helping Vista's other portfolio companies manage their data. 

By the end of 2019 it had 130 customers in financial services, approximately the amount it had to started the year with, and roughly 7% less than 2017. 

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