By Juliet Chung
Steve Eisman, who emerged as one of the stars of the financial
crisis with a winning bet against mortgages, is shuttering his
hedge-fund firm, according to people familiar with the matter.
Emrys Partners LP, which Mr. Eisman founded a little over two
years ago, bet on and against stocks and had at one point reached
about $200 million. It was wound down at the end of June, one of
the people said.
While Emrys gained 3.6% and 10.8% in 2012 and 2013,
respectively, its performance lagged behind that of the bull
market. It was down this year, one of the people said.
Mr. Eisman declined to comment Thursday.
Mr. Eisman's profile grew at the hedge-fund where he previously
worked, FrontPoint Partners, which was once owned by Morgan Stanley
and where he had managed more than $1 billion. Besides his bet
against mortgages, he was known for shorting, or betting against,
for-profit education companies and lobbying against the industry in
Washington. He was featured in the best-selling book about the
financial crisis, "The Big Short."
He started Emrys in March 2012 after leaving Frontpoint, which
in 2010 was ensnared in an insider-trading probe involving a former
hedge-fund manager there. Frontpoint closed under the weight of the
scandal.
According to a regulatory filing, Emrys employed eight
people.
The trade publication Hedge Fund Alert earlier reported the
closure.
In a May regulatory filing, the firm wrote it believed that
"making investment decisions by looking solely at the fundamentals
of individual companies is no longer a viable investment
philosophy."
Instead, Emrys echoed what many stockpickers have said in recent
years about larger factors affecting their ability to invest as
they had historically. "While individual company analysis will
always be important," it said, "the health, or the change in the
health, of the financial system is the starting point of all
analysis."
Write to Juliet Chung at juliet.chung@wsj.com
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