The Liquidations Begin: Three Hedge Funds Shut Down After Summer Rout

Banjo · Oct 6, 2015

If the last two months have taught us anything (other than that Fed is panicking) it’s that “hedge” funds sometimes aren’t so good at hedging.

http://www.zerohedge.com/news/2015-...three-hedge-funds-shut-down-after-summer-rout

marketsurfer · Oct 6, 2015

Hedge funds are so the investor can hedge their portfolio. Most don't hedge themselves, that woukd defeat the purpose of potential outsized returns.

debitspread · Oct 6, 2015

"The fund was down 6% last year and 7% this year through August after it suffered mounting losses in the spring and summer."

Lousy performance, but hardly seems shut-down worthy.

romik · Oct 6, 2015

Close all of them, they are greedy, after a quick buck, overcommit, need to generate a big return to generate big commissions, etc.

Butterball · Oct 6, 2015

Oh wow 3 tiny hedge funds are closing. Yawn at the 'massive' $250m liquidations. The Zerohedge clowns are pathetic.

NoVoodooHere · Oct 6, 2015

debitspread said:
"The fund was down 6% last year and 7% this year through August after it suffered mounting losses in the spring and summer."

Lousy performance, but hardly seems shut-down worthy.

sure it is, high water mark means this particular "manager" cannot get paid until he makes 15%, and the "team" likely realizes, they are incapable of that (?)

It's not about the investor, ya-know?

Chuck Krug · Oct 7, 2015

Where are all the clients' 2 and 20's?

debitspread · Oct 7, 2015

NoVoodooHere said:
sure it is, high water mark means this particular "manager" cannot get paid until he makes 15%, and the "team" likely realizes, they are incapable of that (?)

Well, supposing they run at 15 vol, that's one year at 1 Sharpe. Not too tough a climb. More likely, they had redemptions, leaving them with too little income to cover ongoing costs.

NoVoodooHere · Oct 7, 2015

debitspread said:
Well, supposing they run at 15 vol, that's one year at 1 Sharpe. Not too tough a climb. More likely, they had redemptions, leaving them with too little income to cover ongoing costs.

Yeah but the equation changes if they realize they are incapable of the upside vol:eek:

newwurldmn · Oct 7, 2015

debitspread said:
Well, supposing they run at 15 vol, that's one year at 1 Sharpe. Not too tough a climb. More likely, they had redemptions, leaving them with too little income to cover ongoing costs.

But the loss in confidence by their investor base might have been too tough to climb from. First two years after you launch you lose money, it makes investors question your ability.