Bloomberg Foundation Takes A Bath On Hedge Fund Investments

Jan 11 2010 | 12:35pm ET

New York City Mayor Michael Bloomberg’s charitable foundation started investing in hedge funds at precisely the wrong time.

Bloomberg won the right to move his foundation’s money from mutual funds into riskier investments, including hedge funds, in December 2007. He did, just in time for those investments to be hammered by one of the worst years in the history of the hedge fund industry.

The Bloomberg Foundation lost $279 million on its investments in 2008, thanks almost entirely to its investment with Quadrangle Group, the hedge fund and private equity firm founded by former Obama administration auto czar Steven Rattner. Bloomie lost $264 million in the QAM Select Investors fund and other $5.7 million in its QAM Private Investors Fund, the New York Daily News reports.

The losses exceeded the foundation’s giving in 2008—it handed out $235 million—but Bloomberg ensured it ended the year with more than it started by giving it another $460 million, bring its total assets to $1.6 billion.

Despite the losses, the Bloomberg Foundation stuck with Quadrangle: It still had some $975 million invested with the firm at the end of 2008.


In Depth

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note