Scottwood Capital Management - Top Hedge Fund Now A Family Office
Transitioning from hedge fund to single family office seems to be the wave of the future.
Starting out in 2001 with funds from his savings and from longtime clients, Edward Perlman launched hedge fund Scottwood Capital Management and then wooed enough investors to build it into a $950 million powerhouse. Today, he manages his own money in a single family office after quietly returning all of the fund's outside capital to very happy investors.
The long/short fund, which focused on the credit markets, was headquartered in Perlman's hometown of Greenwich, Connecticut, and was known for conservative, bottom-up research and a contrarian approach to finding hidden opportunities in the markets. After a decade of successfully managing other people's money, he now manages only personal assets in his family office. Many other prominent hedge fund managers are following in the same path.
Guided by almost 30 years on Wall Street trading desks, Perlman followed a simple and consistent approach to invest in undervalued and often distressed stocks, bonds, bank loans, and other securities. Investors routinely praised Scottwood Capital Management’s ability to consistently produce excellent risk-adjusted returns and remain entirely un-correlated to the markets and its peers. He ran the fund until last year when he sent back all of his investors' money.
With performance top notch and Scottwood once again navigating difficult market conditions so successfully, Scottwood was able to go out on a high note with its clients, encountering none of the duress, investor withdrawal requests, faltering returns, or loss of employees that usually cause hedge funds to shut down. From inception until the end of winding down the firm, Scottwood scored 12 percent annualized returns and was recognized with awards from hedge fund industry publications.
In 2009, Hedge Fund Week magazine gave Scottwood First Place for “best event-driven fund” in the U.S. and, in 2010, Barron’s magazine ranked Scottwood in its prestigious Penta list of the Top 100 Hedge Funds in the world. Edward Perlman and Scottwood were also featured in news articles in well-known publications such as Bloomberg/BusinessWeek, Business Insider, the Daily News (New York), Hedge Fund Alert and HedgeWorld.