New York–based hedge fund firm Lazard Asset Management was seemingly about to take off in 2003. That year the firm reached its highest ever spot on Alpha’s Hedge Fund 100 ranking at No. 39, managed $3.8 billion and was propelled by all-star investor William von Mueffling, who had produced an annualized return of 58 percent from August 1998 to December 2002 in the Lazard European Opportunities fund. But von Mueffling felt his compensation didn’t fairly reflect the high returns he helped generate, and with Lazard unable to meet his demands, the star investor left and founded his own New York–based Cantillon Capital Management. Lazard then began to tumble, as many managers and client-investors followed von Mueffling to his long-short hedge fund firm. Firmwide assets at Lazard plummeted by nearly $3 billion, to $900 million…