By Irwin Speizer
Photographs by Joachim Mueller-Ruchholtz
The launch of Lucidus Capital Partners could have come at a better time. Spun out of the London office of Bruce Kovner's Caxton Associates by a pair of traders, Darryl Green and Geoffrey Sherry, it started up in July 2009, pursuing a long/short credit strategy that Green had pioneered with Caxton.
But in its first year as a stand-alone fund, Lucidus posted somewhat lackluster results. Green and Sherry had decided that the markets would continue to sputter through much of 2009 and so stayed largely on the sidelines. Instead, markets rallied. Hedge funds that invested aggressively reaped unusually large rewards in 2009, with some funds reporting returns in excess of 100%. The main Lucidus fund, Green T G2, finished 2009 up 4.57%—a figure that includes trading in the strategy prior to its spin-off in July—which was just about equal to the second-worst...