Clarium Down 23%, Third-Straight Down Year

Jan 12 2011 | 2:40pm ET

Clarium Capital Management’s Peter Thiel has gotten a lot of things right in his life. But over the last two years, his hedge fund can’t seem to get anything right.

The San Francisco-based firm lost 23% last year, according to published reports. The hedge fund’s third-straight losing year means that clients who have stuck with the firm since the middle of 2008 have seen two-thirds of their assets evaporate.

Of course, very few investors have done so: Clarium, which managed more than $7.2 billion two-and-a-half years ago, now manages less than $700 million, a 90% decline.

Thiel shook up Clarium this year, trying to shake off last year’s 25% drop and earlier year troubles. He moved the firm back to San Francisco less than two years after moving it to New York and imposed new risk management measures. It didn’t work: The firm was down just 6% through May.

Still, for investors who have been with Thiel since the beginning in 2002, things aren’t all bad. The fund has returned an annualized 12% since inception.

Despite last year’s troubles, Clarium is sticking with Thiel’s bet that the economic recovery will falter, pushing 30-year Treasuries up.


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