Executives from the firms didn’t return calls seeking a comment or declined to comment.
Investors have enthusiastically backed new funds before only to be disappointed.
Arvind Raghunathan, former head of Deutsche Bank AG’s global arbitrage business, started his Roc Capital Management in July 2009 with more than $1 billion, only to return client capital four years later because of losses.
Pierre-Henri Flamand, a former Goldman Sachs Group Inc. proprietary trader, flamed out even more quickly. He opened his Edoma Partners in 2010, immediately raising $2 billion. Poor performance forced him to close shop just two years later.
Yet clients continue to seek out the next superstar.
“Finding that young talent is always at a premium,” said Evanston’s Blitz. “You are seeing household name hedge funds becoming big institutions––it might be good for business but not for investors looking for differentiated returns.”