Wallace Absolute Fund Dumps Founder After 95% Plunge

Richard Wallace has been ousted from the hedge fund he founded after the Sydney-based listed asset manager made losing bets throughout the financial crisis.

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The fund reported a net loss of A$28.3 million ($19.9 million) in the six months to Dec. 31 after it didn’t “adequately hedge” and “was too highly concentrated in illiquid stocks,” it said in its earnings report last month. The fund’s shares have lost 63 percent on the Australian stock exchange this year after plunging 81 percent in 2008.

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By contrast with the listed entity, Wallace Australia Opportunities is the best performing Australia-based hedge fund in the past 12 months, according to Bloomberg data on 184 funds. The $46 million dollar equity-market-neutral fund has returned 58 percent in the past year, Bloomberg data show.