Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Balestra loses two of three key execs

James Melcher, Balestra Capital
Jin Lee | Bloomberg | Getty Images

Balestra Capital, the hedge fund firm founded by James Melcher in 1979, is set to lose two senior leaders.

Norman Cerk and Matthew Luckett have decided to resign from the firm on June 30, according to an investor letter obtained by Monday evening.

Cerk and Luckett are co-portfolio managers of Balestra's flagship hedge fund. Cerk joined Balestra in 1997 and is head trader. Luckett joined in 2004 and is responsible for portfolio strategy, research and risk, according to the firm's website.

"Over the last few months, it became increasingly clear that we need a single voice and vision regarding the future of the Firm and the portfolio management of Balestra Capital Partners," the letter said. Melcher will resume serving as the sole portfolio manager for the fund. Balestra managed $1.64 billion as of Jan. 1, according to a regulatory filing.

A spokeswoman for Balestra did not immediately respond to a request for comment.

Balestra, which invests based on broad macroeconomic trends, grew to manage more than $2 billion in 2012 after producing several years of outsized gains. The fund was up 199.8 percent in 2007 and 45.8 percent in 2008, according to fund performance obtained by

But returns have been weaker of late; the fund fell 6.08 percent in 2012, gained 7.82 percent in 2013 and is down an estimated 7.8 percent this year through March.

Balestra's recent struggles underscore a difficult environment for so-called "macro" hedge funds. The Absolute Return Macro Index, which tracks funds that use the strategy, is down 0.40 percent through March.

Other prominent firms whose flagship funds fell in the first quarter include $15 billion Discovery Capital Management (down 9.3 percent in March and down 7.1 percent in the first quarter); $13.5 billion Tudor Investment (-0.32 percent/-3.2 percent); $8 billion MKP Capital Management (-0.77 percent/-4.50 percent); and $6.9 billion JPMorgan unit Gavea Investimentos (+0.05 percent/-1.16 percent).

Read MoreThis hedge fund outperformed macro peers

Overall, Balestra's record is stellar: The firm's flagship fund produced net annualized returns of 19.9 percent since inception in 1999.

Read MoreMacro funds got crushed in January on Japan trade

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