Wellington Hedge Fund Manager Who Backed Fintech Unicorns Is Having A Terrible Year
By Nathan Vardi for Forbes
Nicholas Adams has long been one of the most prominent partners at Wellington Management, the Boston-based firm that oversees $943 billion and is known for being the biggest sub-adviser of Vanguard mutual funds. But Adams works in Wellington’s hedge fund business and he is having a very bad year.
For more than 20 years, Adams has run Wellington Management’s Bay Pond Partners, a hedge fund focusing on financial sector stocks that managed as much as $5.9 billion in 2013. Bay Pond Partners is one of the worst performing major hedge funds in 2016.
According to an HSBC report, Adams’ Bay Pond hedge fund was down by 27.9% in the first half of 2016. The report indicates that Bay Pond manages at least $3.7 billion today. In addition to betting on publicly-traded financial services companies, Adams has also been a big backer of fintech unicorn start-ups, particularly in the mobile payments area.
Wellington Management, for example, was the largest investor in Powa, a U.K. mobile payments company that boasted a valuation of $2.7 billion. Powa filed for bankruptcy administration in February. Bay Pond was listed in documents filed with the U.K.’s Companies House as being the Wellington entity associated with Powa, including in Powa’s February administration filings.
Adams also directed Wellington’s investment in Mozido, a mobile payments start-up in Austin, Tex., that has raised $300 million and been valued for as much as $5.6 billion. Wellington is Mozido’s biggest investor. Despite its big fundraising rounds, Mozido has recently been having trouble paying its bills on time—it has delayed making payroll payments to employees several times in recent months and has yet to pay end of year 2015 bonuses. The company, which was the subject of a recent Forbes Magazine article, says its cash flow problems are not a big deal.
Mozido was founded by Michael Liberty, who started out in subsidized housing in Maine and other states before becoming involved in startups and other ventures. He settled an SEC enforcement action in 2008, agreeing to pay $6 million after he denied the charges. Wellington was the initial Series A investor in DaVincian Healthcare, another company Liberty co-founded.
Adams and Wellington declined to comment to Forbes.
First appeared at Forbes