A legendary hedge fund manager is running out of investment
ideas and as a result he is returning $2 billion to investors, Forbes reports. Moore Capital Management founder Louis Bacon,
who had a net worth of $1.4 billion as of March, said today that the
macro-economic environment is making investing for his hedge fund extremely
difficult. The macro investor pointed to disappointing returns as well–his fund
was down 3.2% in the second quarter.
Bacon has been unable to come up with an investment play
that would benefit from the turmoil in Europe-namely the volatility around the
debt crisis there. “The political involvement is so extreme. We have not seen
this since the post-war era. And what they are doing is trying to thwart
natural market outcomes. It is amazing how important the decision-making of one
person, Angela Merkel, has become to world markets,” Bacon told the NYTimes.
His firm manages roughly $14 billion in assets and charges
investors a management fee of 3% as well as a 25% performance fee. That’s
typical of the hedge fund world’s fee structure though most charge 2% and
20%. The Times notes that by giving back
$2 billion Bacon is losing revenue and potential performance fees if the
remaining investments do well....
Wait...wait...there's more at http://www.forbes.com/sites/halahtouryalai/2012/08/01/billionaire-hedge-fund-manager-returns-2b-to-investors-blames-merkel/
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