Sunday, 14 September 2014
Last updated 2 days ago
Dec 4 2008 | 12:26pm ET
Private equity pioneer Thomas Lee may have to throw in the towel on his first hedge fund venture. Lee, the founder of private equity giant Thomas H. Lee Partners, may close his nascent fund of hedge funds venture, Thomas H. Lee Capital Management, which has seen its funds post losses of about 40% this year.
Lee Capital’s Blue Star and Lee Enhanced Offshore funds invest with about 110 underlying managers, including such heavy hitters as SAC Capital Advisors and D.E. Shaw Group. But the highly-levered funds, which manage a combined $1.5 billion, have been burned by the collapse in hedge fund returns, with the leverage roughly tripling their losses.
Now Lee, who founded Lee Capital and a new p.e. shop, Lee Equity Partners, before leaving Thomas H. Lee Partners in 2006, is considering cutting the size of the hedge funds, or shuttering them entirely. Lee himself is the funds’ biggest investor, and the fund’s debt, once as high as $3.2 billion, has fallen to less than $2 billion as other investors have fled. Meanwhile, Lee has sent redemption requests to most of the funds’ underlying managers.
Lee is expected to decide the fate of the funds of funds by the end of the year. Should he keep at it, he plans to reduce or eliminate the funds’ use of leverage.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
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