Maverick’s Ainslie 'Disappointed, Embarrassed' Over Losses

Nov 13 2008 | 12:59am ET

Hedge funds’ monthly ‘Dear Investor’ letters are quickly becoming case studies in self-pity, self-flagellation and flourishes of apology. The latest missive circulating in cyberspace comes from Maverick Capital, and it’s a dandy.

Maverick managing partner Lee Ainslie told investors in an Oct. 9 letter that he couldn’t find words to describe the firm’s “disappointment, embarrassment and shock” over its horrible results in the third quarter, which spanned every sector and region in which it invested in.

Most notably, the Maverick Levered Fund finished the third quarter down 40.6% (down 34.5% year-to-date) followed by the Neutral Levered Fund’s 27.5% loss last quarter (down 3.3% YTD). The firm’s other hedge fund losses include Maverick Fund Class C 5 yr. (down 22.4% in the quarter, down 16.9% YTD) and Maverick Neutral (14.4% in the quarter, flat YTD).

“Virtually all of the losses of the past quarter were suffered in the month of September,” wrote Ainslie. “This performance was driven by a number of factors—hedge funds deleveraging, short regulations changing, equity markets imploding, prime brokers faltering, hedge funds failing and volatility spiking to name a few.”

Admittedly, Ainslie said as an investor, he finds management teams that blame disappointing performance on environmental factors rather than their own poor decisions “quite frustrating—and in reviewing the above I recognize that I have done just that, and I apologize.”

Going forward, Ainslie offered that Maevrick, which managed $10 billion before the recent losses, is positioning itself to “take advantage of the far more productive environment that will exist on the other side of this nightmare.” In the meantime, he said Maverick has reduced its gross exposure and its median average daily volume of our positions is now only one day—the most liquid Maverick has been in more than eight years.


In Depth

Star Fund Managers Battered By Rocky Ride In Yields, Currencies

May 28 2015 | 6:05am ET

Some of the biggest names in the investment world have been whipsawed by the recent...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

The Road To Tax Alpha

May 28 2015 | 5:36am ET

Tax-related alerts are increasingly helping investment managers harvest tax alpha...

 

Sponsored Content

Editor's Note