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From Benedicte Gravrand, Geneva:
Running a hedge fund has its risks: one of them is the worst-case scenario, namely implosion. These situations might feel, for some, like the end of the word. But they also provide the best lessons in risk management and analysis procedures.
Recent news about more Tiger cubs setting up their own hedge funds suggested that hedge fund blowups need not be the end, but that it is possible to go on and try one’s hand at success again. Having been part of a firm like Tiger or LTCM, even if it was before the implosion, also gives some clout. Here is a brief survey of how blow-up survivors and alumni have fared so far.
Long-Term Capital Management: The strategy was quite successful from 1994 to 1998, but when the Russian financial markets entered a period of turmoil, LTCM made a big bet that the situation would quickly revert back to normal, using derivatives to take large, unhedged positions in the market.
- Eric Rosenfeld, a co-founder of the fund, is actively recruiting investment talent for a new quantitative investment fund called Quantitative Alternatives
- Mr. Rosenfeld is being joined by former colleagues Robert Shustak and Bruce Wilson.
- John Meriwether, who was at the helm of LTCM when it imploded is now running the aptly named hedge fund—JWM Partners
Tiger Funds: Julian Robertson’s famous long-short strategy failed in the technology bull mar...................... To view our full article Click here
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