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2008-09-24 Home Front Economy

Big name Hedge Funds are in trouble too!

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Posted by 3dc 2008-09-24 08:21|| || Front Page|| [5 views ] Top

#1 Dillion Read & Co
Dillon, Read & Co. was a prominent American investment bank from the 1920s into the 1960s.

Dillon Read originated in 1832 as the Wall Street brokerage firm Carpenter & Vermilye. However, it is best known for its actions during the 1920s. During that time Clarence Dillon managed the rescue of faltering Goodyear Tire & Rubber Company, engineered the buyout (in 1925) and subsequent sale of Dodge Motors (in 1928) to Chrysler, launched the first post-war closed-end investment trust (in 1924), and led the largest-ever stock offering (in 1926). By the end of the decade, Dillon Read was considered to be an investment-banking powerhouse, alongside J.P. Morgan & Co. and Kuhn, Loeb & Co..

Dillon Read was purchased by Swiss Bank Corporation (SBC) in 1997 and merged with London-based investment bank S. G. Warburg & Co. (purchased by SBC in 1995) to become Warburg Dillon Read. The merged entity, in turn, became part of UBS AG when the latter firm bought SBC.

The Dillon Read name was dropped by 2000 but recently re-emerged in the name of UBS's internal hedge-fund division, Dillon Read Capital Management (DRCM). During its brief 18-month existence, DRCM launched a successful fund of $1.2 billion (which was over-subscribed by 50%) for outside investors which returned 16.6% after fees, making it one of the top multi-strategy funds for 2007. On May 3, 2007, UBS announced the closure of Dillon Read Capital Management due to "operational complexities." DRCM had run up a loss of $124M in the first quarter.[1] DRCM's strategies, which involved leveraged purchases of subprime and Alt-A mortgage bonds, eventually lost $3B - more than 60% of the fund's previous $4.7B value. The April 2008 report to the Swiss Federal Banking Commission (SFBC, in German: Eidgenössische Bankenkommission, EBK, in French: Commission fédérale des banques, CFB) stated that the "assets could not be sold given the illiquidity in the market."[2][3].

Posted by 3dc 2008-09-24 09:00|| 2008-09-24 09:00|| Front Page Top

#2 Well sinse is in trouble too. i wonder if they will bail me out

Posted by sinse 2008-09-24 10:24|| 2008-09-24 10:24|| Front Page Top

#3 Who'd have thought than in a time of massive de-leveraging firms based around leveraged buying of assets would be in trouble.

In other news... Water is wet.

Posted by Bright Pebbles 2008-09-24 11:10|| 2008-09-24 11:10|| Front Page Top

#4 The top five hedge funds were on to a nice little earner.

: As the world's biggest banks reeled in the face of the credit crunch last year, the top five hedge fund earners took home at least $1.5bn apiece after their funds gambled the right way in exceptionally volatile markets.

A survey by US hedge fund magazine Alpha, published yesterday, said the five - Mr Paulson, George Soros, James Simons of Renaissance Technologies, Philip Falcone of Harbinger Capital and Kenneth Griffin of Citadel - all individually earned more than the $1.2bn that JPMorgan will spend to buy Bear Stearns, the most high profile victim of the crunch.

Posted by tipper 2008-09-24 11:42|| 2008-09-24 11:42|| Front Page Top

#5 Since the buy-in is a sum beyond my wildest dreams, I must conclude that the investors in hedge fund have "got it on them" to lose.
No tears here.

Posted by bigjim-ky 2008-09-24 11:47|| 2008-09-24 11:47|| Front Page Top

#6 Finally, some good news about the economy!

Posted by Cornsilk Blondie 2008-09-24 12:26|| 2008-09-24 12:26|| Front Page Top

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