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Herb Wagner's decision to leave Baupost Group shows how tough it is for hedge funds to keep ambitious, talented people.
Baupost's Seth Klarman
Photo credit: (Bloomberg)Does news of Herb Wagner's decision to start his own investment company, after two years as Seth Klarman's co-portfolio manager at the Baupost Group, to start his own throw a temporary hitch into Klarman's succession plans?
Probably not, given Klarman's plan to maintain his current role for the foreseeable future.
However, at the very least it does once again underscore the difficulty hedge funds have retaining top people -- no matter what the long term plans call for -- if they have ambition to run their own show.
The 55-year-old Klarman had begun thinking more seriously about the firm's long-term viability five years ago, internally referring to succession planning as "progression planning" even though he had no health problems and had no idea when that future day would come that he would stop working.
In June 2010, the hedge fund luminary started to share overall portfolio management duties with Wagner, who at the time was managing Baupost's public investment group, which oversees all corporate and mortgage debt, structured products and equity investments.
Wagner, who spent 13 years at Baupost, became co-portfolio manager of the Boston-based firm -- which has $25billion in assets - on July 1, 2011, sharing responsibilities with Klarman. Wagner had been...