Hedge Fund Legend Seth Klarman Returns Cash To Investors Due To “Lack Of Investment Opportunities”; This is only the second time in the hedge fund firm’s 31-year history that it is returning money to investors

Another Hedge Fund Legend Returns Cash To Investors Due To “Lack Of Investment Opportunities”

Tyler Durden on 12/04/2013 16:03 -0500

While hardly as spectacular as Hugh Hendry’s supernova flameout, or the far more boring, slow motion conversion of the assorted other famous and less famous bears, a legendary hedge fund titan has decided he too has no use for excess capital in this broken market. No surprise then thatInstitutional Investors’ Alpha reports that Baupost’s Seth Klarman is returning $4 billion in capital to investors for only the second time in its history due to “a lack of investment opportunities.” And watching how the epic farce that Bernanke’s wealth effect known as the Stalingrad & Poorski trades in the last 30 minutes of every day nobody can blame him. And no, Klarman is not returning cash due to some hidden underperformance: “Baupost’s many partnerships were up 13 percent, on average, through the September quarter. Its annualized return since inception is in the high teens.” This happens to push it in the top decile of all hedge funds in 2013. Yet despite the exercise of the redemption put, Baupost, which at the end of 2013 had $26.7 billion in AUM making it the 7th largest hedge fund in the world, still will have a ton of both capital and dry powder.From Alpha:

When it completes the capital distribution, firm-wide assets will likely be more than $25 billion, according to a source. Earlier this year we reported the firm’s goal is to keep assets at $25 billion.

This is only the second time in the hedge fund firm’s 31-year history that it is returning money to investors. The previous time was in 2010, and Baupost subsequently raised money in early 2011.

At the end of 2012, Baupost had nearly $26.7 billion under management, making it the seventh-largest hedge fund firm in the world, according to the most recent annual Institutional Investor’s Alpha ranking of the world’s 100 largest hedge fund firms.

The good news: the trickle down from Mr. Chairwoman’s policies to the E-trade babies still left fighting for bid/ask scraps in this “market” with the vacuum tube HFT armies is sure to have a happy ending.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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