Tuesday, 21 October 2014
Last updated 11 hours ago
Sep 13 2007 | 12:35pm ET
Goldman Sachs’ flagship hedge fund continues to dig itself a deeper hole after a 22.5% drop last month. The one-time Cadillac of Hedge Funds is now down one-third year-to-date, and has dropped 44% from its March 2006 high-water mark.
The fund, run by Mark Carhart and Raymond Iwanowski, saw investors yank $1.6 billion on July 31—almost one-fifth of its assets, Bloomberg News reports.
According to a letter to investors, Global Alpha’s most recent woes stem from bad bets on currency and stock trades, especially wrong-way bets on the Japanese yen and Australian dollar.
“We still hold our fundamental investment beliefs that sound economic investment principles couple with a disciplined quantitative approach can provide strong uncorrelated returns over time,” the letter said. “Longer term, successful quant managers will have to rely more on unique factors. While we have developed a number of these factors over the last several years, in hindsight we did not put sufficient weight on these relative to more popular quant factors.”
As things stand, Carhart and Iwanowski will have to find some extremely lucrative factors before their fund can become the cash cow it once was for Goldman: The hedge fund must return 80% before it can begin charging its 20% performance fee again.
However, the news isn’t all bad for Goldman: Its Global Equity Opportunities Fund, which received a $3 billion Goldman-orchestrated bailout last month after dropping some 28% in the early days of August, rebounded somewhat, rising 12% the following week.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...