Davidson Kempner Partner Risto Koivula Is Leaving US Hedge Fund

Dinesh Nair and Nishant Kumar, Bloomberg News

(Bloomberg) -- Risto Koivula, one of Europe’s most senior merger arbitrage investors, is leaving US hedge fund Davidson Kempner Capital Management, people familiar with the matter said.

Koivula, a partner at Davidson Kempner, is preparing to depart by year-end and plans to initially take some time off to pursue personal interests, the people said. He’s considering possibilities including setting up his own fund, according to the people, who asked not to be identified as the matter is private.

London-based Koivula started at Davidson Kempner in 2010. Prior to joining the US firm, he was head of risk arbitrage and a co-manager at Tisbury Capital Management. Koivula and a representative for Davidson Kempner both declined to comment.

Merger arbitrage investors typically profit from exploiting the difference between a takeover offer and the current market price, or by pressuring suitors to increase their bids. Davidson Kempner has recently amassed big bets on European deals like Philip Morris International Inc.’s planned takeover of smokeless tobacco company Swedish Match AB.

The fund is also building a stake in Aveva Group Plc to join other investors in pushing Schneider Electric SE to boost its offer for the British firm, Bloomberg News reported earlier in October.

It’s been a tough capital raising environment for hedge fund startups, with investors increasingly migrating toward multi-strategy hedge funds run by several different managers rather than relying on individual star traders. While the likes of Millennium Management and Citadel have prospered, more than 3,500 hedge funds have shuttered over the last five years with more funds closing than starting this year, according to data compiled by Hedge Fund Research Inc.

Still, some managers with a track record of making money are able to attract capital. James Smith, the former head of Elliott Management Corp.’s operations in Hong Kong, started his own multi-strategy hedge fund last year.

Ex-Viking Global Investors portfolio manager Divya Nettimi recently started her own hedge fund with more than $1 billion of commitments, making it the largest launch of a woman-led firm in the industry’s history and among the biggest of any to debut this year.

York Capital’s retreat from the hedge fund business has also triggered a number of launches. Christophe Aurand, the firm’s former co-chief investment officer, and an Asia team led by Masahiko Yamaguchi are among the York Capital veterans that have set out on their own.