Melissa Ko Back in the Game with Covepoint Capital

by StockJockey

Tuesday, July 15, 2008 - 9:18 am

Bear Stearns Asset Management had several viable strategies outside of Ralph Cioffi’s doomed credit-based funds, with Melissa Ko’s Emerging Markets Macro Fund perhaps the most successful

Ko’s style, which makes the usual macro bets, is not for the feint of heart, although she seems to have balls of steel and ice in her veins. A 18% down month in the spring of 2006 was only a blip in a year that saw her post gains of 25.7%:

Melissa Ko, a former star trader at Bear Stearns, has formed a new hedge fund called Covepoint Capital with nearly $1 billion in assets, according to a letter the firm sent to investors on Monday....Covepoint is the latest hedge fund to become independent from the former Bear Stearns Asset Management (BSAM) division, a collection of funds which held about $27 billion in assets when JPMorgan Chase & Co (JPM-NYSE) bought the crippled investment bank on May 30. Reuters

Her contract with Bear might have led to a messy divorce from JP Morgan; it is possible Jamie Dimon retains some of the economics in Covepoint as the 40-something mother takes on alpha males on a global stage.

A consummate marketer, Ko should be able to raise assets if she gets off to a quick start; the current environment is tailor made for global macro strategies.

Although she is no Peter Thiel, but than again who is?

Ko, former Bear trader, launches hedge fund
Reuters
--------------------------------------------------------------------------------------------------------------
The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

Comments:

Why exactly is it relevant that Ko is 40-something mother? Would you typically refer to male traders as 40-something fathers?

Posted by on 07/15/2008 at 02:50 PM

No, but I would give her credit for being a well respected member of the investment community who is holding her own and then some in the world of alpha males.

There are plenty of horror stories out there; she is not one of them.

Hats off, glad to see her sort things out post-Bear.

Knock em dead Melissa.

Posted by on 07/15/2008 at 10:28 PM

Melissa Ko has a terrible reputation on the street. The three senior portfolio managers whom have worked with her since she started the Bear EM Macro Fund three years ago have all left, two just recently. Her simple strategy consists of being long and leveraged high yielding EM assets which has worked well since it has been a one way market for several years. However, you dont need to pay hedge fund fees for that easy to replicate strategy. Now that there is some volatility in the markets, and good traders should shine, her fund is losing money. the fund has lost over half its assets and I would be surprised if the fund still exists this time next year.

Posted by on 07/16/2008 at 11:06 AM

Had not heard that per se; although Jeff Lane apparently wanted to blow her out after he came in. Thought she was to heavy in the beta trade, and might eventually blow up.

After Cioffi, it is tough to see how you could further damage the franchise.

Will keep tabs on her, might have to leave the performance attribution to you.

Probably will only see gross/net numbers.

Posted by on 07/16/2008 at 11:30 AM