I agree. I would tend to think that the recent rule changes by the SEC and Gov't sticking their hands in the mkts is cause for some of them failing. Any funds that need to short equities are completely fucked. While the Hedge Fund bubble is imploding, it's not entirely their fault in some instances.
Which Hedgefunds are going out of business? SAC, citadel, TCI,and etc?
- Thread starter mahram
- Start date
I agree. I would tend to think that the recent rule changes by the SEC and Gov't sticking their hands in the mkts is cause for some of them failing. Any funds that need to short equities are completely fucked. While the Hedge Fund bubble is imploding, it's not entirely their fault in some instances.
How could Einhorn ride Lehman to zero and be down this much? I can only hope one of those subpoenas went to him.
Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=aXI7LyKLDL9k&refer=home
Anslie, Einhorn Decline as Stock Hedge Funds Post Record Losses
By Katherine Burton and Tom Cahill
Oct. 3 (Bloomberg) -- Maverick Capital Ltd., Greenlight Capital LLC and The Children's Investment Fund Management LLP fell more than 12 percent in September as stock hedge funds posted record monthly losses and braced for client defections.
Lee Ainslie's Maverick Capital declined 19.5 percent and Greenlight Capital, run by David Einhorn, was down 12.8 percent, according to investors in the New York-based funds. Children's Investment, overseen by Chris Hohn in London, fell 15 percent, based on a preliminary estimate.
Stock hedge funds fell an average of 8.6 percent in September, the biggest one-month loss since Hedge Fund Research Inc. began collecting data in 1990. While that was better than the 12 percent decline by the MSCI World Index, a benchmark for global stocks, industry analysts expect investors to increase their requests to pull money from funds.
``The poor performance of certain hedge funds will have repercussions in the allocation processes,'' said Taco Sieburgh Sjoerdsma, head of research at Liability Solutions Ltd., a London-based investment consultant. ``It may lead to substantial shifts between hedge-funds strategies and between hedge funds.''
Other managers with above-average losses for the month included Stephen Mandel, whose main Lone Cyprus fund in Greenwich, Connecticut, fell 14.7 percent. New York-based Third Point LLC, run by Daniel Loeb, dropped 11 percent.
Officials for the hedge funds declined to comment or didn't return calls.
Defense Doesn't Work
Funds in all investment categories fell 6.9 percent in September, according to Hedge Fund Research's Global Hedge Fund Index. That's the worst month for the $1.9 trillion industry since August 1998, when the Russian debt default triggered the collapse of Long-Term Capital Management LP.
The losses came even as many managers sought to sidestep the tumble in equity prices by holding more cash, cutting borrowing and reducing their bets on stocks expected to rise.
Restrictions on shorting stocks in the U.S. and U.K. put in place on Sept. 18 hamstrung funds that could no longer bet on falling prices of 15 percent of the companies in the Standard & Poor's 500 Index. Energy and materials shares, which many hedge funds had been expecting to rise, were some of the worst performers in the month, with the S&P 500 Materials Index down 17 percent and its Energy Index down 12 percent.
Price swings also made trading difficult, investors said. The S&P 500 rose or fell more than 4 percent on six trading days in the month, compared with once in the previous eight months.
``Funds have suffered from volatility that has quadrupled and a lot of that is related to the short ban,'' said Brad Balter, managing partner of Balter Capital Management LLC in Boston, which farms out money to hedge funds.
Withdrawal Restrictions
Managers including DKR Capital Partners LP in Stamford, Connecticut, and London-based RAB Capital Plc have restricted redemptions so they aren't forced to sell assets at a loss to pay off investors. Guy Wyser-Pratte suspended withdrawals from his $500 million Wyser-Pratte Eurovalue Fund.
``We thought it was necessary to maintain the strength of our positions,'' said Scott Principal, a trader at New York- based Wyser-Pratte & Co. He declined to comment on returns.
Funds of hedge funds probably put in more than $100 billion in year-end redemption notices by this week's Sept. 30 redemption deadline, according to London-based advisory firm Clontarf Capital.
Activists Hurt
Among the hardest hit last month were activist investors like Wyser-Pratte who take positions in a company and push for changes to boost the stock price. Atticus Capital LLC, run by Timothy Barakett, dropped 15.8 percent in its Atticus European fund and 2.8 percent in its Atticus Global Fund, investors said.
Tripp Kyle, a spokesman for New York-based Atticus, declined to comment.
The month was the worst in 19 years for a basket of 50 stocks that are widely held by hedge funds, according to Goldman Sachs Group Inc.'s Very Important Positions index. The index fell 18.6 percent in September, the most since data have been tracked, and 24 percent year-to-date. The index is compiled of the positions that appear most frequently among top 10 holdings of hedge funds.
Below are selected hedge-fund returns for September and the year-to-date.
Fund Sept. (%) YTD (%)
Maverick -19.5 -21.2
TCI -15 -26
Greenlight Capital -12.8 -16.4
Lone Cyprus -14.7 -26.5
Third Point -11 -18.4
Atticus European -15.8 -43.5
Atticus Global - 2.8 -27.2
Source: Investors
To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net; Tom Cahill in London at tcahill@bloomberg.net
Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=aXI7LyKLDL9k&refer=home
Anslie, Einhorn Decline as Stock Hedge Funds Post Record Losses
By Katherine Burton and Tom Cahill
Oct. 3 (Bloomberg) -- Maverick Capital Ltd., Greenlight Capital LLC and The Children's Investment Fund Management LLP fell more than 12 percent in September as stock hedge funds posted record monthly losses and braced for client defections.
Lee Ainslie's Maverick Capital declined 19.5 percent and Greenlight Capital, run by David Einhorn, was down 12.8 percent, according to investors in the New York-based funds. Children's Investment, overseen by Chris Hohn in London, fell 15 percent, based on a preliminary estimate.
Stock hedge funds fell an average of 8.6 percent in September, the biggest one-month loss since Hedge Fund Research Inc. began collecting data in 1990. While that was better than the 12 percent decline by the MSCI World Index, a benchmark for global stocks, industry analysts expect investors to increase their requests to pull money from funds.
``The poor performance of certain hedge funds will have repercussions in the allocation processes,'' said Taco Sieburgh Sjoerdsma, head of research at Liability Solutions Ltd., a London-based investment consultant. ``It may lead to substantial shifts between hedge-funds strategies and between hedge funds.''
Other managers with above-average losses for the month included Stephen Mandel, whose main Lone Cyprus fund in Greenwich, Connecticut, fell 14.7 percent. New York-based Third Point LLC, run by Daniel Loeb, dropped 11 percent.
Officials for the hedge funds declined to comment or didn't return calls.
Defense Doesn't Work
Funds in all investment categories fell 6.9 percent in September, according to Hedge Fund Research's Global Hedge Fund Index. That's the worst month for the $1.9 trillion industry since August 1998, when the Russian debt default triggered the collapse of Long-Term Capital Management LP.
The losses came even as many managers sought to sidestep the tumble in equity prices by holding more cash, cutting borrowing and reducing their bets on stocks expected to rise.
Restrictions on shorting stocks in the U.S. and U.K. put in place on Sept. 18 hamstrung funds that could no longer bet on falling prices of 15 percent of the companies in the Standard & Poor's 500 Index. Energy and materials shares, which many hedge funds had been expecting to rise, were some of the worst performers in the month, with the S&P 500 Materials Index down 17 percent and its Energy Index down 12 percent.
Price swings also made trading difficult, investors said. The S&P 500 rose or fell more than 4 percent on six trading days in the month, compared with once in the previous eight months.
``Funds have suffered from volatility that has quadrupled and a lot of that is related to the short ban,'' said Brad Balter, managing partner of Balter Capital Management LLC in Boston, which farms out money to hedge funds.
Withdrawal Restrictions
Managers including DKR Capital Partners LP in Stamford, Connecticut, and London-based RAB Capital Plc have restricted redemptions so they aren't forced to sell assets at a loss to pay off investors. Guy Wyser-Pratte suspended withdrawals from his $500 million Wyser-Pratte Eurovalue Fund.
``We thought it was necessary to maintain the strength of our positions,'' said Scott Principal, a trader at New York- based Wyser-Pratte & Co. He declined to comment on returns.
Funds of hedge funds probably put in more than $100 billion in year-end redemption notices by this week's Sept. 30 redemption deadline, according to London-based advisory firm Clontarf Capital.
Activists Hurt
Among the hardest hit last month were activist investors like Wyser-Pratte who take positions in a company and push for changes to boost the stock price. Atticus Capital LLC, run by Timothy Barakett, dropped 15.8 percent in its Atticus European fund and 2.8 percent in its Atticus Global Fund, investors said.
Tripp Kyle, a spokesman for New York-based Atticus, declined to comment.
The month was the worst in 19 years for a basket of 50 stocks that are widely held by hedge funds, according to Goldman Sachs Group Inc.'s Very Important Positions index. The index fell 18.6 percent in September, the most since data have been tracked, and 24 percent year-to-date. The index is compiled of the positions that appear most frequently among top 10 holdings of hedge funds.
Below are selected hedge-fund returns for September and the year-to-date.
Fund Sept. (%) YTD (%)
Maverick -19.5 -21.2
TCI -15 -26
Greenlight Capital -12.8 -16.4
Lone Cyprus -14.7 -26.5
Third Point -11 -18.4
Atticus European -15.8 -43.5
Atticus Global - 2.8 -27.2
Source: Investors
To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net; Tom Cahill in London at tcahill@bloomberg.net
I'm with hmmmaybe all the way. Most guys on ET think hedge funds are just like typical daytrading shops("This Sucker's going higher!") and get their info from blogs and oher sources.
Funds like SAC/Citadel are doing things that almost all ET'rs could never understand. They have the best talent and best the best coverage possible.
There are some low level hedgefunds that will fail(that guy with the pingball table on wall street warriors). But SAC and Citadel are the future of money management.
Best talent ......all on red 5.
Seth Klarmann makes a point about how irritated he got when he was expected to defend his track record agains scientific THEORY that said it was impossible, rather than academics being expected to defend their THEORIES against the FACTS of Klarmanns performance.
They shouls stoick to investigating Quarks, black holes, fruit fly DNA etc.
Disclosure: BSC, but know where to respect empiricism as valid and where to recognise it is the wrong framework.
They shouls stoick to investigating Quarks, black holes, fruit fly DNA etc.
Disclosure: BSC, but know where to respect empiricism as valid and where to recognise it is the wrong framework.