Caxton Going Down?

Posted by Bess Levin, Jul 31, 2007, 8:00pm

brucekovnercaxtonassociates.gifWe’re hearing rumors that Caxton Associates is blowing up. Caxton is one of the largest hedge funds in the world with around $16 billion under multi-strategy management so this would be huge and, as they say, unlikely. Some are saying it’s because of the move SEPR has made of over the past few weeks (Caxton’s largest equity position had been SEPR), others that it’s the very fashionable credit situation. Right now, all just hearsay. Maybe funds this large don't blow up. Maybe Caxton was already a red giant, and will contract into a white dwarf under a sea of redemption requests after some significant losses. Only then will it be ready for a supernova. Heard anything? You know where to find us.

Update: Caxton denies any such rumors. According a friend o' DealBreaker, there was a "larger than normal liquidation in order to reduce risk," the main fund is down 3-4% mtd and Caxton "made money today." Make of that what you will.

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Posted in: Hedge Funds, Rumors

Comments

Posted by Zbignew, Jul 31, 2007 3:32PM

"Unlikely"?

All sorts of shit is unlikely, and yet still happens. LTCM "wasn't supposed to happen." Apparently million-to-one-shots happen every single moment of every day.

Posted by ass, Jul 31, 2007 3:34PM

thank you, zbignew

Posted by em, Jul 31, 2007 3:44PM

i doubt it, but shit happens

Posted by joe, Jul 31, 2007 3:52PM

Looking at the 13-F, it just doesn't seem possible that a 280M position in SEPR could cause a 17B fund any problems. Even if the entire position was wiped out, they'd only lose 1.7%.

I'm still confused about Sowood. How does someone file owning 6.5B in equities and options lose 1.5B on 3B in capital?

Short story, 13-Fs are misleading

Posted by joe marmar, Jul 31, 2007 4:00PM

hmm, maybe they employed leverage?

Posted by PBateman, Jul 31, 2007 4:00PM

joe - 13Fs are really meaningless for multistrats and fixed income players.

1) Most fixed income positions don't show up in the filing
2) International positions aren't filed
3) You can't tell how much leverage they're running

So with Sowood, you don't see their 7x levered bank book, which ultimately caused their downfall

Posted by joe marmar, Jul 31, 2007 4:00PM

hmm, maybe they employed leverage?

Posted by , Jul 31, 2007 4:01PM

Joe, just one word explains it...leverage. Get used to that word if you want to work on Wall Street.

Posted by Ajax, Jul 31, 2007 4:04PM

the first joe doesn't know preferred stock from livestock

Posted by BSD is a dick, Jul 31, 2007 4:08PM

Ajax, i agree, but the first Joe knows a LOT about what life is like for a guy whose face is perpetually covered in mushroom bruises.

Posted by Mep, Jul 31, 2007 4:14PM

Zbignew: Apparently million-to-one-shots happen every single moment of every day.


It depends on who is making the odds.

Posted by jt, Jul 31, 2007 4:14PM

no value add comment:

HAHAHAHA such highbrow humor and sophisticated insults

Posted by , Jul 31, 2007 4:18PM

looks like faber debunked you just like he debunked the txu people

Posted by em, Jul 31, 2007 4:31PM

somebody from caxton reads dealbreaker, and should really take it upon themselves to confirm or deny said reports

Posted by the other BSD, Jul 31, 2007 4:45PM

who is BSD?

Posted by , Jul 31, 2007 5:05PM

hey, jt: suck a dick

Posted by Toby Young, Jul 31, 2007 5:33PM

Caxton denied this rumor directly to Ms. Levin shortly after the story was posted. As noted to DealBreaker, Caxton continues to trade normally and profitably for the year.

Toby Young
Director of Investor Relations
Caxton Associates

Posted by AJ, Jul 31, 2007 5:59PM

I like Toby responding. Very solid.

Posted by , Jul 31, 2007 7:55PM

Toby - is it true your fund was up 12% going into last week and finished the month down 7%?

Posted by PBateman, Jul 31, 2007 7:56PM

Toby - is it true your fund was up 12% going into last week and finished the month down 7%?

Posted by Chuck Prince, Jul 31, 2007 9:09PM

God, I love Seinfeld

Posted by Ajax, Jul 31, 2007 9:34PM

yo chuck, get yo head outta yo ass and do something about the fucking stock price

Posted by jt, Jul 31, 2007 11:48PM

hey anonymous @5:05 - way to prove my point, this shit is fucking hilarious!

Posted by Former Eye-Patch Wearing Joker, Aug 01, 2007 3:47AM

Will two two please get a room, jt you must be the catcher, right?

Posted by henry teoh, Aug 01, 2007 4:21AM

What is SEPR?

Posted by I love to help henry!, Aug 01, 2007 12:59PM

SEPR = Sepracor, makers of Lunesta.

Posted by Ajax, Aug 01, 2007 3:12PM

Wall St's in great hands with guys who don't know what leverage is or what SEPR is.

Posted by Goldpalm, Aug 03, 2007 11:27PM

Caxton's holdings presently are:

-Equities 6 Billion
-Fixed Income 12 Billion
-Currencies 1 Billion
-Commodities 0.5 Billion

Now, if Caxton's size is 11 Billion, take
out a pocket calculator and you'll get
the leverage.

Value at risk (VaR) presently is 0.5.
Last month it was 0.6 and in Average
it is between 0.4 to 0.8

Caxton has over 2000 Equity positions,
both US and international (ADR).

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