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Contract Impasse Forces John A. Levin & Co. to Shut Down Event-Driven Funds

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NEW YORK (–After failing to negotiate contracts with its event-driven investment team, John A. Levin & Co. Inc. said in a regulatory filing that it will wind up the funds, returning assets to investors.

As of June 30, Levin’s event-driven funds represent 17% of the firm’s US$12.4 billion in assets and their performance for the first six months of the year represented 44% of the firm’s advisory revenue, according to an 8-K report Levin filed with the Securities and Exchange Commission on Oct. 18.

Levin was unable to come to terms on a compensation package for managers Frank Rango and Henry Levin. As a result, Levin President and Chief Executive John C. Siciliano said both men were expected to leave the firm, along with their investment teams.

Mr. Rango is the co-senior portfolio manager for the Purchase Associates LP fund and senior portfolio manager for the Purchase Associates II LP fund, both event-driven merger arbitrage funds. Mr. Levin is co-senior portfolio manager for the Purchase Associates LP fund.

“The decision to wind up the funds was made following negotiations with all key event-driven investment personnel regarding compensation arrangements going forward,” Mr. Siciliano said in a statement. “While we are disappointed that we were not able to reach an agreement with any of them in a timely manner, the firm remains committed to offering a range of alternative investment strategies to our clients. We appreciate the efforts made over many years by Frank Rango, Henry Levin and their entire investment team, as they played a key role in establishing our firm as a well-known provider of alternative investment strategies.”

John A. Levin & Co. is a subsidiary of publicly traded holding company BKF Capital Group Inc., which recently has faced discontent from hedge fund shareholders over the generosity of its executive compensation.

Levin also manages the Island Drive Partners LP fund, a long/short equity fund and the RCL Capital LP and RCL Capital Offshore Ltd. funds, which also follow a long/short equity strategy.

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Contact Bob Keane with questions or comments at [email protected].