Money managers under the microscope
from Joseph Giannone:
More than a year after one of the hedge fund industry's best known managers departed Goldman Sachs, Mark Carhart re-emerged at a hedge fund conference and told Reuters the big news: he is coming back. You heard it here first.
Mark and his longtime partner, Raymond Iwanowski, retired last March and with research head Giorgio De Santis. More than 12 years of strong performance from Goldman's quant team had made Global Alpha the bank's flagship fund and one of the industry's largest at its early 2007 peak of $12 billion.
But a year before Wall Street imploded, computer driven funds had their own debacle. Global Alpha plunged in August 2007 as stock prices gyrated and interest rates jolted, prompting investors to pull out billions. That after the fund had lagged the average fund in 2006. And so Carhart "retired" at the age of 43.
Back in April this year, market wags speculated Carhart would land at buyout firm KKR to help build an asset management business. Instead, Carhart tells Reuters he intends to start his own firm and launch an "exotic beta" fund with an initial pool of $1 billion. Of course, fund-raising is tough these days, but Carhart, who is sporting longer hair and a easier smile, says he has been spending some rare time off touring the U.S.A. in his Airstream motor home with his family. If he can manage to keep two kids happy while logging thousands of miles, raising ten figures should be doable.
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Hedge fund start-ups approach UBS – Bloomberg
More hedge fund managers strike out on their own- Investment Week
How, just over half a year after some market observers pronounced prop trading perpetually and eternally dead, did the prop desk at these banks bounce back to life in a fashion that would have turned Lazarus green with envy?
As Barclays auctioned off its Barclays Global Investors unit this year, Goldman was widely seen as a likely acquirer. That is until Blackrock In under Larry Fink emerged as the buyer with a $13.5 billion deal.
The worst financial crisis in 80 years has tarnished many previously sparkling reputations.
In fund management, as in banking, many managers who previously looked like the shrewdest around were left looking like investors who could profit well enough in a bull market, or even during the dotcom bust, but just couldn’t deliver the goods when times got really tough.