The hedge fund boss who made the biggest ever single donation to a UK university at the start of this year suffered a tough 2018, newly published accounts show.
Winton Group, the hedge fund group run by billionaire David Harding, saw a drop in all key metrics last year. Assets under management, revenue, and profits all fell sharply and the number of staff fell by close to 20%.
“2018 proved to be a year of change for Winton,” Harding wrote in the accounts. He said a “sharp reversal of equity markets in February” provoked the firm to reassess its investment strategy “take more risk in non-trend following quantitative strategies.” The course change proved to be costly and complex, and prompted some clients to pull funds.
Net revenue fell by 27% to £188m ($229m) in 2018, accounts filed with Companies House show, and underlying pre-tax profit fell by 36% to £78m. Assets under management at the firm declined from $28.5bn to $23.6bn.
Winton let go of almost 100 people in response. The company closed offices in Oxford and San Francisco, and reduced employee headcount from 367 to 453. The reduction was partly due to asking staff to relocate to London and some deciding to leave.
“We are sorry to have said goodbye to valued colleagues but are conscious that a healthy company is one that is constantly able to introspect analytically and reform itself in response to evolving internal and external pressures,” Harding wrote.
Winton Group includes Harding’s hedge fund Winton Capital Management, his venture capital business, and other subsidiaries.
Despite the slump in profits, revenue, and assets under management, the highest paid director’s pay rose from £1.1m to £1.5m. The director is not named but is likely to be Harding, who is the founder, CEO, and chief investment officer at Winton.
Dividends paid to shareholders rose by 14% to £66.9m. A further £12.5m was paid to investors in March of this year.
Harding made headlines in February when he donated £100m to the University of Cambridge, which was biggest single gift made to a university in the UK by a British philanthropist.
Harding, who studied natural sciences at Cambridge in the 1980s, was a pioneer of so-called “quant” hedge funds, which use mathematical models to spot market inefficiencies that can be taken advantage of. He helped to cofound what is now Man Group (EMG.L) in 1987 before founding Winton Capital in 1997.
The tough performance in 2018 represents an extension to the ongoing slump Winton has been suffering over the last few years. Assets under management peaked at $33.7bn (£27.6bn) in 2015, while pre-tax profit peaked at £487m in 2014.
Harding is worth an estimated $1.5bn, according to Forbes. He campaigned for Britain to remain in the EU and donated £3.5m to the “Britain Stronger in Europe” campaign.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.