Convexity Suffers First Negative Quarter In Two Years

May 17 2011 | 1:57am ET

Convexity Capital Management, headed by the former head of Harvard University’s endowment, suffered a loss in the first quarter, the Boston-based firm told investors.

Convexity, which remains the biggest hedge fund ever at launch, missed its benchmarks by 1.5%, Jack Meyer wrote to clients, Bloomberg News reports. It is the firm’s first negative quarter in two years.

“It’s been a while since we have had a negative quarter,” he wrote. “After careful consideration we have decided we do not like it. It will never happen again.”

“OK, ignore that last statement,” the joking Meyer continued. “Of course it will happen again. But we are confident that we can continue to add value over the long term and that these bumps in the road will be… well, just bumps in the road.”

Meyer blamed static fixed-income markets for the poor performance: “lots of smoke, not much fire.”

“While we are disappointed with our performance for the quarter, we are not discouraged,” Meyer wrote. “We work to construct trades that put the odds on our side and protect the downside. But there will be periods, such as this past quarter.”

Meyer added that Convexity took in $507 million in new investments on the quarter. The firm, which has $12.6 billion in assets, debuted in 2006 with more than $6 billion.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.