Thursday, 2 April 2015
Last updated 12 hours ago
Mar 27 2008 | 2:00am ET
Last year may have seemed like a rough one for hedge funds, but by at least one metric, things weren’t so bad.
At least 49 U.S. hedge funds, with a total of $18.6 billion in assets, closed their doors in 2007, according to Absolute Return magazine. But that’s a sharp decline from 2006, when 83 hedge funds with more than $35 billion went belly-up. Even excluding the catastrophic collapse of Amaranth Advisors, which managed some $9.1 billion at the time of its natural gas trading debacle, last year was quite a relief from its immediate predecessor.
This year has not started so well, with hedge funds managing $6.66 billion going out of business, including Peloton Partners and Sailfish Capital Partners. If that rate continues, more than $27 billion worth of hedge funds will close their door this year, exceeding 2006’s ex-Amaranth total.
The largest hedge fund deaths last year were the collapse of Sowood Capital Management, which managed some $3 billion, and the closures of Citigroup’s $2.5 billion Tribeca Global Investments and UBS’s $1.5 billion Dillon Read Capital Management. More than half of the top 10 hedge fund extinctions last year—including Bear Stearns’ three entries—went under due to losses in levered credit positions.
Other losers included NorOrdin Investment Management’s $1.2 billion Macro RV Overseas Fund, $1 billion U.S. equity shop Copper Arch Capital, Cantillon Capital Management’s $1 billion U.S. Low Volatility Fund and Merlin BioMed Group’s $900 million International Fund.
By strategy, long/short equity funds—the most numerous of hedge funds—lost more than any other, with 16 buying the farm. But by assets, multi-strategy funds were by far the bigger losers, with $7.3 billion worth of funds calling it quits, compared to just $4 billion for long/short.
The Absolute Return figures include only those hedge funds that at one time have managed at least $25 million.
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…