In the grand tradition of hedge fund letters to clients informing them that the money they invested is pretty much all gone, many a manager has a difficult time doing a credible rendition of an apology. Even if the words "apologize" or "sorry" actually do appear on the page, they're typically followed by 1) A positive spin such as "Your one dollar at the beginning of this year is now 4 cents!" and 2) Long paragraphs about how outside forces lost the clients' money, or how, sure, it's been an annus fucking horribilis but there are still 14 trading days left on the calendar to turn it around, or how the ass bleeding the fund has suffered is strictly due to the market's ridiculous mispricing of equity and in no way the investment theses of those in charge. So when a hedge fund manager actually sounds like he really is sorry about incinerating his clients' money? It feels like you've got to give him a least a smidge of credit, relative to his peers. Sure, he bet big and lost it all, but he feels bad about it! Grading on a curve, that's something.
Owen Li, the founder of Canarsie Capital in New York, said Tuesday that he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March 2014. "I take responsibility for this terrible outcome," Li wrote in a letter to investors obtained by CNBC.com "My only hope is that you understand that I acted in an attempt—however misguided—to generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse," he added...Li said in the letter that he made a series of "aggressive transactions" over the last three weeks to make up for poor returns in December. He said he bet on stock price options, predicated on the broader market rising. But stock indexes instead fell, causing the huge losses along with several undisclosed direct investments, according to the note.