The bloodbath may be just beginning. As Daniel Loeb, proprietor of Third Point, gloomily prophesied last year: There is no doubt that hedge funds and some of their particular investing strategies are in the first innings of a washout. In his latest annual letter to shareholders of Berkshire Hathaway, Warren Buffett threw salt in the hedgies’ wounds. The results for the hedge-fund investors were dismal — really dismal, Buffett observed. Lately, it’s been one high-profile disaster after another in the hedge-fund world, and it’s hitting wealthy investors where it really hurts. Consider:
Eric Mindich is closing his Eton Park Capital fund returning half of what it managed at its peak. In his letter to investors, first reported by The New York Times, Mindich attributed the decision to a combination of industry headwinds, a difficult market environment and, importantly, our the fund’s disappointing 2016 performance.
Earlier this month, Bill Ackman, threw in the towel the once high-flying founder and owner of Pershing Square Capital, closed positions on Valeant Pharmaceuticals International, a stock that cost his investors more than $3 billion, according to Fortune magazine.
Viking Global Investors, suffered its biggest annual loss ever a $30-billion hedge fund run by Andreas Halvorsen, an alum of Julian Robertson’s famed Tiger Management,, also due to stakes in drug stocks including Valeant, Teva Pharmaceutical Industries and Allergan.
Eddie Lampert, lose hundreds of millions of dollars. saw his principal investment in Sears Holdings lose hundreds of millions of dollars. Lampert, whom Business Week magazine said in 2004 might be the next Warren Buffett, announced he’s been a big buyer of the stock.
Carl Icahn, suffered its second consecutive double-digit annual loss in 2016 an adviser to President Donald Trump, who often praises Icahn’s business acumen,, Barron’s reported. A nearly $6-billion hedge fund overseen by Ichan is racking up the red ink year after year
John Paulson funds lost more than two-thirds of their value. whose bet against subprime mortgage debt has been called the greatest trade ever. Has suffered the worst record loses ever since then. Over the past five years, assets under his management have declined by $26 billion.