Perhaps not entirely surprisingly, some people are a little skittish about the place.
A Reuters review of Platinum’s investments, interviews with hedge fund investors familiar with the firm, as well as former employees, clients and associates, and a review of marketing and other documents show that Platinum has a history of investing in controversial businesses….
“Investors looking beyond the impressive headline returns will find a pattern of behavior that raises serious questions about ethics, morals, and a host of other risks an investor must take to achieve those returns,” said Ted Seides, the recently departed co-founder of hedge fund investment firm Protégé Partners.
Oh, but those returns! Platinum’s Value Arbitrage Fund is up 650% since its debut in 2003 and has never had a losing year. And how? Here’s a can’t-miss strategy:
- lend to scandal-plagued energy companies at usurious rates, take them over and flip them when scandals bring about the inevitable collapse;
- lend to companies who charge even more usurious rates for slightly lower usurious rates;
- take out long-term variable annuities on the dying without their knowledge, laugh all the way to the bank after the funeral;
- maintain plausible deniability.
We’re sure there’s more to it but that’s a pretty good start.
The person familiar with Platinum’s thinking said the firm was aggressive with its investments, but always within the limits of the law.