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Alpha Male writes in Allaboutalpha.com/blog/:
Institutional Investor’s “Daily ii” reports on a couple of “troubled” hedge funds. But although they are compared to Amaranth, which lost a king’s ransom, neither fund actually lost that much money for investors. In fact, the only ones who lost their shirts at these funds would have been the very people that made the most on the way up: the owners of the respective firms.
Firstly, Daily ii cites a story in the New York Times about Archeus Capital, a convert arb fund that went from $3b AUM to $700M AUM and will be giving the rest of the money back to investors by the end of the year. The paper goes to great lengths to conjure up images of another blow-up - citing Amaranth 3 times in the first 100 words.
But Archeus, a blow up? No way. The fund was down 1.9%, is reportedly invested in highly liquid positions, and will apparently be able to return all remaining capital to investors in 2 months. Bubbles invariably end in tears. But this story ends with an orderly return of capital and minimal losses for investors.
Second, Daily ii cites D.B. Zwirn, a multi-strategy fund that according to the New York Post, has been accused of the “questionable use of the hefty fees investors paid to it.” (note the loaded language) Details have yet to emerge, but accounting transgressions hardly amount to an Amarath-scale debacle - even if they are indefensible.
(To this list of false “blow ups”, I might ...................... To view our full article Click here
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