The year 2015, thus far, has been a bit of an annus f*cking horribilis for hedge fund managers. While sure, there are approximately 35 trading sessions left for them to turn it all around and then some, it's looking more and more likely that even veterans of the industry who supposedly know what they're doing are going to finish the year having turned every dollar their clients invested at the beginning of the year into about 77 cents. Bill Ackman's Pershing Square is down 19 percent year-to-date. Greenlight Capital and Third Point have been similarly bruised. Mike Novogratz decided to scrap his $2.3 billion fund at Fortress entirely. Bain Capital followed in suit with its macro operation. Two of Julian Robertson's tiger cubs, TigerShark Management and Tiger Consumer Management, were mauled to death. And two weeks back, Larry Robbins wrote a letter to Glenview Capital investors, down more than twenty percent through October 26th, telling them "I've failed to protect your capital, and mine."
Upon hearing the mea culpa, either directly or through reports in the press, many thoughts likely raced through your head. How is Larry handling this? Was the giant tuna somehow behind the losses? Will he be forced to sell his New Jersey mansion (home to Madison Square Garden West), and move into a 5th floor walkup over a mile from the subway? We don't know the answers to those first two questions. But luckily, the Times reports, the answer to that last one is "No."
A Manhattan penthouse on the Upper East Side with sweeping views of both the Hudson River and the East River was sold this summer for $37.9 million. The person behind the purchase was hidden behind a limited liability company with the cryptic name CRE Acquisition. It turns out that the mystery buyer was not a wealthy foreigner, but a local Wall Street celebrity: Larry Robbins, the hedge fund manager and founder of Glenview Capital Management, according to documents reviewed by The New York Times and conversations with people knowledgeable about Mr. Robbins’s personal investments...Mr. Robbins’s big real estate deal comes during a particularly trying time for his $8.8 billion hedge fund. Last week, he wrote an apology to investors for losing 15 percent of their money so far this year...His letter combined with his latest purchase illustrate a fundamental truth about the biggest hedge fund managers: They may have had a rough year with volatile markets, but they remain incredibly wealthy...His new apartment in the Charles condominium on First Avenue will be used as a second home, according to mortgage documents. Mr. Robbins’s primary residence is a sprawling mansion located on more than four acres in Alpine, N.J. The Manhattan penthouse he purchased was created by combining two duplex penthouses. It now totals 11,740 square feet, including private terraces that cover 1,300 square feet. Monthly fees are $10,547.
Everybody breathe easy. We're gonna get through this. Together.