• 30 Oct 2008 at 11:26 AM

Many Lamentations Heard From Hedge Funds

It seems a few big players were bitten a bit harder than you would expect by the recent whip-saw action at Volkswagen. Funds including SAC, Och Ziff, Perry Capital, Greenlight Capital, Marshall Wace, Odey Asset Management, York Capital and Glenview Capital seem to have taken a slap or two, and, if the Times Online is to be believed, some funds out there are near bankruptcy because of the swing. (Sloppy risk management, that).
Perhaps the bigger losers are the prop-desks at big investment banks (what remain of their number). Deutsche Bank and Commerzbank have suffered from rumored exposure along with Société Générale. (Hah hah! Sorry, we couldn’t help it. They’re French).
Porsche, on the other hand, is sitting on something like EUR 6 billion in paper profits.
At issue is the German regulatory environment, which does not require the disclosure of large stakes in cash-settled options. As a result, Porsche could end up with effective control of Volkswagen without so much as a 13D filing.
Mongrel General: WRONG! Porsche. What is best in life?
Porsche: To crush your financial enemies. See der capital driven before you. Hear the lamentations of dee regulatory relations women.
Hedge funds fear bankruptcy after Porsche squeeze [Times Online]

  • 30 Oct 2008 at 8:05 AM

Cash Is King

Reputation is everything, it seems. So while others are closing shop, the likes of SAC, Greenlight, Elliott Management and Brevan Howard Asset Management have raised billions. Of course, Stevie Boy isn’t taking money until January, since his idiot portfolio managers forced him to close most of SAC’s operations in disgust earlier this month.
Just a guess, but do you think Bloomberg has it right? Do high water marks have anything to do with it?
SAC’s Cohen, Einhorn Raise Money as Most Hedge Funds Shrink [Bloomberg]