Carlson Capital is bleeding assets in its stock-picking fund following the departure of one of its portfolio managers

Carlson Capital portfolio manager Matthew Barkoff resigned from Dallas-based hedge fund in January, prompting a wave of redemptions, sources tell Business Insider.
Assets at the Black Diamond Thematic fund, which Barkoff helped manage, have fallen to around $250 million from $1 billion as of August 2017.
Carlson lost several senior leaders in 2018, including longtime chief risk officer Michael Palys, treasurer Michael Watson, and head of fixed income Ivan Ross.

Hedge fund Carlson Capital has been hit with client withdrawls from its long-short equity fund following the departure of one of the fund’s two portfolio managers.

Carlson’s Black Diamond Thematic fund, which ended 2018 with $621 million in assets, has shed 60% of its assets since the start of the year after fund manager Matthew Barkoff resigned in January, sources tell Business Insider.

Black Diamond Thematic fund, which had more than $1 billion assets in mid-2017, represents a small portion of Carlson’s overall assets — around 10% as of the end of 2018.

Barkoff did not respond to requests for comment and a spokesman Carlson declined to comment.

Traditional stock-pickers have struggled to find a foothold in a market now dominated by quants and passive index funds, and several hedge funds, including Jana Partners and BlueMountain Capital Management, have axed their long-short equity funds already in 2019.

The field’s reputation has taken such a hit that even a strong start to the year by some of the biggest stock-picking names has not been able to stem the flood of redemptions.

See more: It’s a billionaire bounce back as Einhorn, Ackman, and Edelman all post good January returns, after a brutal 2018

Barkoff, a former portfolio manager for Steve Cohen’s SAC Capital, helped found the fund 8 years ago at Carlson with fellow portfolio manager Richard Maravigilia, who is also a SAC alum. He will remain an advisor to the firm and does not have plans to join another manager, a source with knowledge of the situation tells Business Insider.

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The Black Diamond Thematic fund was the only one of the firm’s five funds to finish 2018 with negative returns, losing 0.57% for the year. In 2017, the fund dropped 22.1% and the firm’s overall assets fell $900 million that year.

Assets for Carlson at the beginning of 2019 stood at $8.1 billion, with roughly $2 billion in CLO investments and $6 billion across the five hedge funds. The flagship multi-strategy fund, Double Black Diamond, began 2019 with $3.2 billion after returning 2.62% in 2018.

Clint Carlson also lost chief risk officer Michael Palys, longtime treasurer Michael Watson and head of fixed income Ivan Ross in 2018.

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