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Joseph Taussig From Beverly Chandler, Opalesque London
Joseph Taussig, chief executive of Taussig Capital has created a product he calls Structural Alpha which facilitates capital raising from banks and insurance vehicles and gives it to hedge funds. In a recent interview with Matthias Knab for Opalesque TV, Taussig
explained
his approach.
"If you look at the history of Warren Buffett, he was a hedge fund manager for 13 years and he had great performance. He was close to 30% returns. Since inception, he took no management fees; he had a performance fee over hurdle. In 1969, essentially, he quit being a hedge fund manager cold turkey to go into the reinsurance and banking businesses" says Taussig.
Presenting different scenarios that could have taken place since 1969, Taussig believes that if Buffett's Berkshire Hathaway had been liquidated and invested in the S&P 500 the fund would have reached $2.2bn over the subsequent 40+ years. If the money had been managed by Buffett as an asset manager it would have got to $4.4bn, based on Buffett's yield of 12.1% compounded over 40 years.
Taussig claims that one particular investment in Burlington Northern Railroad affected Buffett's returns. "So, that is the first time they have ever distributed more share since 1969. So, the numbers get a little bit mixed up, now vis-à-vis Burlington. So, if I back Burlington out, Berkshire Hathawa...................... To view our full article Click here
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