DIRECTOR GOES SURFING
By ZACHERY KOUWE
September 28, 2006
SourceA week after Amaranth lost $6 billion on natural gas, another billion-dollar hedge fund is closing its doors after investments turned sour.
New York-based firm Narragansett Asset Management, run by 41-year-old Joseph Dowling III, told investors in a letter earlier this month that it has liquidated about 80 percent of its holdings and will return a "substantial" part of the $1 billion fund to investors by the end of September.
Narragansett's returns over the last two years have not been up to snuff and, through the first eight months of this year, the firm is down 2 percent, Dowling said in the letter.
While most of Narragansett's employees are being shown the door, the firm will technically remain open while Dowling, an avid surfer, goes on vacation for 12 to 18 months.
"Toward the end of my sabbatical, I expect to take a fresh look at our historical investment results and fine-tune my investment strategy and portfolio management before returning," he said in the letter.
Sources inside Narragansett said traders and other employees, who have some of their money tied up in the fund, are fuming at the way Dowling suddenly dropped the bomb on them earlier this month.
Last November, Dowling actually opened the fund back up and collected about $250 million from 67 investors, according to public filings.
Dowling did not return calls for comment. It's unclear who Narragansett's investors are but sources said Swiss bank Credit Suisse had invested in the firm through a fund-of-funds.
Dowling cut his teeth as a healthcare investor with Texas investor Richard Rainwater and Thomas Frist of hospital giant HCA. He also worked at Larry Feinberg's Oracle Partners, a private investment firm that placed bets on health care and bioscience companies.