Category Archives: hedge funds

Too Many Shorts

Posted on September 6, 2008 by Felix

CEOs often worry that if there are lots of shorts, that’s bad for their stock price. Meanwhile, the likes of John Hempton worry that a lot of short interest could be very good for the stock price. Me, I think … Continue reading →

Posted in banking, hedge funds, stocks | Comments Off on Too Many Shorts

Cut Short

Posted on September 4, 2008 by Felix

Many corporate executives, and a fair few politicians, like to rail against evil short-sellers. Large investors, by contrast, tend not to, even if they’re long-only. Part of the reason is that they actually like short-sellers. For one thing, they can … Continue reading →

Posted in hedge funds, stocks | Comments Off on Cut Short

Copying Harvard

Posted on September 3, 2008 by Felix

Swiss funds-of-funds firm Gottex has a new gimmick: a fund which "will emulate the investment principles of U.S. ‘super endowments’" like those of Harvard and Yale. Actually, it might not be so new: maybe other funds-of-funds have been doing this … Continue reading →

Posted in hedge funds | Comments Off on Copying Harvard

The Destroyer of Swedish Capitalism

Posted on August 19, 2008 by Felix

For a wonderful real-world example of Martin Wolf’s take on global capitalism, check out Niklas Magnusson’s profile of Swedish activist investor Christer Gardell. This being Sweden, Gardell isn’t only unpopular with unions and other leftists, he’s even unpopular with shareholders: … Continue reading →

Posted in economics, hedge funds, investing | Comments Off on The Destroyer of Swedish Capitalism

Dan Loeb’s Terrace

Posted on August 15, 2008 by Felix

The main reason to read Paul Goldberger’s article on 15 Central Park West in the new Vanity Fair is for the photos. Here are the developers, posed under the arches on the balcony of the top-floor penthouse — which I … Continue reading →

Posted in architecture, hedge funds | Comments Off on Dan Loeb’s Terrace

When Markets Break

Posted on August 14, 2008 by Felix

How do you know that markets are broken? Sometimes it’s the presence of a clean arbitrage like that in Thomson Reuters shares. But there’s a much bigger weirdness going on right now: as John Carney reports, the spread on long-dated … Continue reading →

Posted in bonds and loans, hedge funds, humor, stocks | Comments Off on When Markets Break

Quantitative Finance Soundbite of the Day

Posted on August 13, 2008 by Felix

Paul Wilmott on the problems facing the world of quantitative finance: Banks and hedge funds employ mathematicians with no financial-market experience to build models that no one is testing scientifically for use in situations where they were not intended by … Continue reading →

Posted in banking, hedge funds | Comments Off on Quantitative Finance Soundbite of the Day

Distressed Trades of the Day

Posted on August 11, 2008 by Felix

For the best part of a year now I’ve heard buy-siders talk about how there are great opportunities in the debt markets if you know what you’re doing. I’ve generally assumed that these people have lost money on most of … Continue reading →

Posted in bonds and loans, hedge funds | Comments Off on Distressed Trades of the Day

Fortress Gets a New Principal

Posted on August 11, 2008 by Felix

Hedge funds can be extremely good at making their founders extremely wealthy. But that can be a problem, too: a star trader at a hedge fund knows that if he wants the real dynastic wealth, he’ll have to start up … Continue reading →

Posted in hedge funds | Comments Off on Fortress Gets a New Principal

Who’s Gaining from Volatility?

Posted on August 8, 2008 by Felix

Most hedge funds had a hard time in July, losing twice as much money, on average, as someone invested in the S&P 500. It seems that a lot of people were rushing in to the short-financials trade, and got massively … Continue reading →

Posted in banking, hedge funds | Comments Off on Who’s Gaining from Volatility?

Harvard Wins

Posted on August 7, 2008 by Felix

Remember Jack Meyer, the former manager of the Harvard endowment who left to form his own hedge fund, Convexity Capital? Last year, he was a zero, underperforming his benchmark, and Harvard was being peppered with questions about whether they still … Continue reading →

Posted in hedge funds | Comments Off on Harvard Wins

Hedge Fund Datapoint of the Day

Posted on August 6, 2008 by Felix

Evan Newmark: Citigroup estimates that in the past 18 months Fortress has lost an astonishing 85%, or $6 billion to $7 billion, in the value of publicly-traded companies in which it holds large positions. It takes an extra-special level of … Continue reading →

Posted in banking, hedge funds | Comments Off on Hedge Fund Datapoint of the Day

Cognitive Disconnect of the Day

Posted on July 2, 2008 by Felix

Susan Pulliam reports on hedge fund manager Thane Ritchie, son of options trader Joe Ritchie: Mr. Ritchie, who is tall, with blond hair, lives with his wife and three children in a modest, four-bedroom house. He says he doesn’t own … Continue reading →

Posted in hedge funds, wealth | Comments Off on Cognitive Disconnect of the Day

Private Equity in Hedge Funds: A Weird Combination

Posted on July 1, 2008 by Felix

File under "things which really don’t make a whole lot of sense": Lehman Brothers aims to raise $3 billion to $5 billion for a fund to buy strategic minority stakes in hedge-fund managers, according to sources at the bank. The … Continue reading →

Posted in banking, hedge funds, private equity | Comments Off on Private Equity in Hedge Funds: A Weird Combination

The 1-and-15 Hedge Fund

Posted on June 20, 2008 by Felix

UK fixed-income hedge fund manager Blue Bay is in some trouble: Blue Bay said performance fees had fallen by 75 per cent in the second half of the year, to £4m in five months, compared to £18.2m in the second … Continue reading →

Posted in bonds and loans, hedge funds | Comments Off on The 1-and-15 Hedge Fund

Hedge Funds: The Legal Risks

Posted on June 20, 2008 by Felix

Karen Donovan picks up on some interesting rhetoric from Brooklyn’s very own US attorney Benton Campbell: "Hedge fund investors, like investors in publicly traded corporations or mutual funds, are protected by the federal securities laws." Hedge funds are often considered … Continue reading →

Posted in hedge funds | Comments Off on Hedge Funds: The Legal Risks

Einhorn’s Secret Weapon: Napping

Posted on June 19, 2008 by Felix

David Einhorn is a very clever chap: the game room in his offices includes a vital piece of furniture. There is a game room with a pool table and a bar, but it doesn’t look like it’s seen many wild … Continue reading →

Posted in hedge funds, productivity | Comments Off on Einhorn’s Secret Weapon: Napping

Putting Vulture Funds in Perspective

Posted on June 18, 2008 by Felix

Daniel Davies has a spirited and intelligent attack on vulture funds, explaining why I’m misguided in my attempts to defend them. He makes some good points, which I’ll come to in a second. And I do feel a little bit … Continue reading →

Posted in bonds and loans, development, hedge funds | 4 Comments

The Other Side of the Vulture Fund Story

Posted on June 17, 2008 by Felix

I missed this on Sunday – coincidentally, a day before Portfolio’s story about vulture funds came out – but Tony Allen-Mills has a very good article in the UK’s Sunday Times about the long-running fight between Elliott Associates and Congo-Brazzaville. … Continue reading →

Posted in bonds and loans, development, hedge funds | Comments Off on The Other Side of the Vulture Fund Story

Has Einhorn Cashed In His Lehman Chips?

Posted on June 17, 2008 by Felix

If you haven’t read Hugo Lindgren’s piece on David Einhorn, go read it now, it’s excellent. I even like the way that Lindgren links Einhorn’s poker prowess to his short-selling abilties: A few days before this year’s conference in May, … Continue reading →

Posted in banking, hedge funds | Comments Off on Has Einhorn Cashed In His Lehman Chips?

Defending the Vulture Funds

Posted on June 16, 2008 by Felix

Ooh boy. Condé Nast Portfolio, in its July issue, is running a major article about vulture funds by Joshua Hammer. Hammer certainly did a lot of reporting: he not only spoke to high-profile vulture investor Michael Sheehan, but even went … Continue reading →

Posted in bonds and loans, development, hedge funds | Comments Off on Defending the Vulture Funds

Short Sellers Don’t Burst Bubbles

Posted on June 12, 2008 by Felix

Bill Ackman appeared at the WSJ’s Deals and Dealmakers conference today. And Megan Barnett is quite right, he really did say this: You couldn’t short single-family home prices rising. That’s why there was a bubble in single-family home prices. And … Continue reading →

Posted in hedge funds, stocks | Comments Off on Short Sellers Don’t Burst Bubbles

Is Chris Hohn a Threat to US National Security?

Posted on June 11, 2008 by Felix

Andrew Ross Sorkin and John Gapper have done an excellent job of fisking the idiotic rantings of Lou Dobbs, who seems to think that because 1% of the investors in Chris Hohn’s TCI are sovereign wealth funds, it should never … Continue reading →

Posted in hedge funds, Politics | Comments Off on Is Chris Hohn a Threat to US National Security?

When is a Hedge Fund Not a Hedge Fund?

Posted on June 9, 2008 by Felix

Dane Hamilton is a stickler when it comes to what is and what isn’t a hedge fund: Some funds that call themselves hedge funds really aren’t, because they don’t sell short, use leverage or buy derivatives, but are basically long-only … Continue reading →

Posted in hedge funds | Comments Off on When is a Hedge Fund Not a Hedge Fund?

Andrei Shleifer, Billionaire?

Posted on June 2, 2008 by Felix

David Warsh has a great piece on Andrei Shleifer this week. Shleifer is known as a first-rate economist, and is also notorious for some shenanigans in Russia in the 1990s; Warsh makes a strong case that it’s time “to close … Continue reading →

Posted in economics, hedge funds, wealth | Comments Off on Andrei Shleifer, Billionaire?