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Another casualty of last week's commodity rout, Pierre Andurand's hedge fund loses $500M, or 20%...

Another casualty of last week's commodity rout, Pierre Andurand's hedge fund loses $500M, or 20% of its assets from a bullish stance on crude oil. Sources say Andurand remains positive on oil and has exited only a few positions. Hedge fund?
Comments (14)
  • Master of the Corner
    , contributor
    Comments (44) | Send Message
     
    I think the new definition of hedge is: huge, leveraged same-direction bet made with someone else's money.
    10 May 2011, 05:59 PM Reply Like
  • kmi
    , contributor
    Comments (3985) | Send Message
     
    add 'while collecting management fees'
    10 May 2011, 06:02 PM Reply Like
  • djn21
    , contributor
    Comments (77) | Send Message
     
    ++
    10 May 2011, 06:04 PM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    turn those machines back on...turn those machines back on...
    10 May 2011, 06:14 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    Hedge funds are just mutual funds that are designed to elude regulation and only allow already-rich people to partake.

     

    Also, they are designed to enrich the fund managers...but that's already true of mutual funds.
    10 May 2011, 06:14 PM Reply Like
  • Mark Gilliland
    , contributor
    Comments (91) | Send Message
     
    That'll be a tough partner letter to write.
    10 May 2011, 06:23 PM Reply Like
  • WMARKW
    , contributor
    Comments (10263) | Send Message
     
    We'll have to watch JPM's 2Q financial report to see how they report their massive wins.
    10 May 2011, 06:34 PM Reply Like
  • Trader DMA
    , contributor
    Comments (77) | Send Message
     
    Casualty ?
    They were also hit in 2008 and then came back really well.
    Also 2009 and 2010 were good.
    So if crude oil goes way higher, they may have again a very good year.
    So not really a casualty.
    10 May 2011, 06:51 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Its been quite some time since "hedge funds" have lived up to their moniker, and been truly "hedged".

     

    Master of the Corner, at the top of the thread, has hit the nail squarely on the head.
    10 May 2011, 07:58 PM Reply Like
  • Trader DMA
    , contributor
    Comments (77) | Send Message
     
    So Gold is 1518
    Silver is 39
    Crude Oil 104.

     

    So much for casualty's
    10 May 2011, 08:52 PM Reply Like
  • Hitesh Patel
    , contributor
    Comments (314) | Send Message
     
    Hedge Funds can no longer Hedge. It is extremely difficult for a hedge fund manager to pay for insurance against his positions to protect it from downside risk when his peers are not doing it. This effects his alpha. On a relative basis the hedge fund that is truly hedging will underperform his peer unless their is a significant pullback. Since their is a Fed back stop on the market, put options are just not necessary.
    10 May 2011, 09:18 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Hitesh Patel,

     

    Given the AUM so many funds have, you're likely correct...which suggests that many (most?) funds are too large.
    10 May 2011, 09:55 PM Reply Like
  • Hitesh Patel
    , contributor
    Comments (314) | Send Message
     
    I agree, hedge funds are too large. The allure of hedge funds are their ability to navigate markets with precision due to their small size relative to their mutual fund peers, however now most are larger then MF's. What is surprising is their abilty to charge 2 and 20.
    10 May 2011, 10:36 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Its my understanding that that fee structure is coming under downward pressure, esp. in the case of the large institutional investors, such as pension and endowment funds. There's no sense in over-paying for beta.
    10 May 2011, 10:40 PM Reply Like
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