Clarium Sinks In Sept. As Rough Years Continue

Sep 28 2009 | 12:04pm ET

The financial crisis has been hard on a lot of hedge funds, but none more so than Clarium Capital Management.

The New York-based hedge fund, led by PayPal co-founder Peter Thiel, got off to a strong start last year. But since last summer, when the world economy teetered on the brink, the fund’s losses have continued to mount, even as many hedge funds have enjoyed big turnarounds this year.

Clarium’s run of bad luck continued this month, as the hedge fund shed 8% in the first 14 trading days of September, MarketWatch reports. That leaves the fund down 15.6% through Sept. 18, a loss roughly equal to the average gain posted by hedge funds this year. Clarium lost 4.5% in 2008, less than most hedge funds thanks in no small part to its 24% January return.

Much of the fund’s loss this month can probably be blamed on its effort to slash leverage. Clarium’s leverage fell to 1.4 times assets from 4.2 times between Sept. 11 and Sept. 19.

The long string of losses has taken a toll on the hedge fund’s asset base. The firm managed more than $7 billion little more than a year ago; now, it boasts less than $2 billion.


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