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Market Intelligence

Hedge Fund Profiles

Seaver Wang | March 5, 2012

Here are examples of what can happen with even the best and brightest in the industry.

Victor Niederhoffer

Education: Harvard, U. of Chicago- Doctorate, Professor at UC Berkeley

Accomplishments:

  • 5x U.S. National Squash Champion
  • 1x North American Squash Champion
  • Known as Father of Quantitative Investing

Career Notables:
1982-1990: Partner at Soros Fund Management
1982-1996: Averaged 35% annual returns
1996: Ranked #1 hedge fund by MarHedge newsletter
1997: Lost over 50%  in Thai investments and went into debt, closed fund
2002: Started Matador Fund
2006: MarHedge Ranks Niederhoffer’s funds top Commodities Trading Advisor for 2004-2005
2007: Loses 75% and closed down fund

John Merriwether
Northwestern University, U. of Chicago- MBA,
Former Vice Chairmain of Salomon Brothers- Left during Treasury securities trading scandal
1994: co-founded LTCM
1998: LTCM investors wiped out.
2000: LTCM closes doors
1999: JWM Partners formed
2007-2009: main fund lost 44%
2010: starts JM Advisors

Long Term Capital Management (LTCM)
1994-1997: averaged nearly 40% annually
1998: Heavy losses from East Asian and Russian financial crises, consortium of 15 banks bails out fund for with $3.6 billion. Investors wiped out. Investments were leverage as high as 250-to-1

Myron Scholes
Professor at MIT, U. of Chicago, and Stanford University
Won Nobel Prize 1997 in economics
Co-founder LTCM
Chairman of Platinum Grove Asset Management- lost 38% in 2008 (where’s the hedging?!?)

Robert Merton
Professor at Harvard and MIT
Won Nobel Prize 1997 in economics
Co-founder LTCM

John Paulson

Education: NYU, Harvard- MBA
Worked at Boston Consulting and Odyssey Partners

Career Notables:
1994: Founded Paulson & Co.
2007: One of his funds returned 590% from betting against the subprime mortgage market
2008: Positive double-digit returns
2011: Main funds down over 50%

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