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By Lawrence Delevingne
NEW YORK, Nov 3 (Reuters) - BlueMountain Capital Managementwill not replace Jes Staley, a managing partner who is leavingto become chief executive officer of Barclays inDecember, the New York-based money management firm wrote in aletter to investors obtained by Reuters on Tuesday.
Staley joined the $22 billion private investment firm in2013 from J.P. Morgan Chase.
"While we will miss Jes and the important contributions hemade in the firm, his departure will not meaningfully impact ourday-to-day business," BlueMountain said in the letter thatsummarized third quarter results. "We have no near-term plans toreplace Jes, whose role was specifically created to leverage hisunique talents and experience."
Like many hedge funds, BlueMountain appears to have beenstung by the sharp slide in shares of Valeant Pharmaceuticals.
The letter said its funds lost money over the third quarterfrom a bet on the stock of an unnamed "specialty pharmaceuticalcompany" that faced a potential subpoena from U.S. HouseDemocrats and whose stock "declined on concerns over potentialgovernmental actions, including the prospect of price controlpolicies."
BlueMountain held more than $112 million worth of Valeantshares on June 30, according to public filings. Valeant has beenunder significant scrutiny in recent weeks following allegationsabout its accounting practices and concerns over price increasesfor its drugs. On Oct. 15, Valeant said it had been subpoenaedby U.S. prosecutors seeking details on its patient assistanceprograms, drug pricing and distribution practices.
"This has continued to be a fluid and volatile situationwith significant developments in October leading to heightenedconcerns and uncertainty over the company's pricing anddistribution practices," BlueMountain said. "We exited our longposition in this stock in October, but remain very close to thisdynamic situation and would not rule out future exposure."
A spokesman for BlueMountain declined to comment.
BlueMountain's Credit Alternatives hedge fund lost 0.85percent in October through the 23rd but is up 2.38 percent for2015, according to a report by HSBC Alternative Investment Groupobtained by Reuters. A benchmark of similar funds, the AbsoluteReturn Credit Index, is up 0.92 percent for the year throughSeptember. A figure including October was not yet available.
A smaller stock-focused vehicle, the BlueMountain Long ShortEquity Fund, declined 2.44 percent last month through October23, per HSBC. It's up 2.43 percent for the year versus a declineof 2.59 percent through September for the Absolute Return U.S.Equity Index. (Reporting by Lawrence Delevingne; Editing by Jennifer Ablanand David Gregorio)
