sharon sanders
Editor-in-Chief & President
October 21, 2008, 11:03 am
Hedge Funds: Defensive In Tone, Aggressive In Strategy
Posted by David Gaffen
Geoffrey Rogow reports:
In an effort to forestall more redemptions and panic, hedge-fund managers preached ?strong stomachs? and washed their hands of responsibility for losses in the latest round of investor letters.
A review of nearly a dozen investor letters sent by hedge funds around the beginning of October finds a tone that could, at best, be described as somber ? and, at worst, dire. Oaktree Capital Management L.P.?s Howard Marks called the last couple of weeks ?the greatest panic I?ve ever seen,? while Tontine Associates LLC?s Jeffrey Gendell said he was ?embarrassed by this performance.?
All told, Chicago-based Hedge Fund Research Inc. said assets at hedge funds declined by $210 billion in the third quarter, the biggest quarterly decline ever, with investors redeeming $31 billion in the third quarter alone. That was the largest quarterly redemption in history.
snip
Joseph Battipaglia, chief market strategist for the private client group at Stifel Nicolaus, said many could have seen this coming. He noted that he had gotten as high as 70% cash in the past couple of months in anticipation of a collapse.
?If [the hedge funds] went after CDOs and mortgages, they got trapped by the same thing all of us did and there is just no excuse for their behavior,? said Mr. Battipaglia. ?Some of them have a legitimate gripe, but most simply do not.?
?with reporting by Rob Curran
http://blogs.wsj.com/marketbeat/2008/10/21/hedge-funds-defensive-in-tone-aggressive-in-strategy/
Hedge Funds: Defensive In Tone, Aggressive In Strategy
Posted by David Gaffen
In an effort to forestall more redemptions and panic, hedge-fund managers preached ?strong stomachs? and washed their hands of responsibility for losses in the latest round of investor letters.
A review of nearly a dozen investor letters sent by hedge funds around the beginning of October finds a tone that could, at best, be described as somber ? and, at worst, dire. Oaktree Capital Management L.P.?s Howard Marks called the last couple of weeks ?the greatest panic I?ve ever seen,? while Tontine Associates LLC?s Jeffrey Gendell said he was ?embarrassed by this performance.?
All told, Chicago-based Hedge Fund Research Inc. said assets at hedge funds declined by $210 billion in the third quarter, the biggest quarterly decline ever, with investors redeeming $31 billion in the third quarter alone. That was the largest quarterly redemption in history.
snip
Joseph Battipaglia, chief market strategist for the private client group at Stifel Nicolaus, said many could have seen this coming. He noted that he had gotten as high as 70% cash in the past couple of months in anticipation of a collapse.
?If [the hedge funds] went after CDOs and mortgages, they got trapped by the same thing all of us did and there is just no excuse for their behavior,? said Mr. Battipaglia. ?Some of them have a legitimate gripe, but most simply do not.?
?with reporting by Rob Curran
http://blogs.wsj.com/marketbeat/2008/10/21/hedge-funds-defensive-in-tone-aggressive-in-strategy/