D1 shutting down?
Guess maybe not surprising given what's going on but heard D1 is closing, anyone hear anything similar?
Jun 24, 2022Jun 24, 2022
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Comments (39)
Institutional Investor published an article earlier today saying they get margin called and are shutting down the public equities side of the fund, but then just retracted the story and said it was erroneous? No clue what's going on
If true, not surprising. If false, they are in bad shape. Asymmetrically downward trending.
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If true then we might be in for a wild summer -- three blue chip funds that were considered top hedge fund seats (whale rock, D1, melvin) have already thrown in the towel, and if D1 is fucked, any one of the techy L/S funds could be next. Tiger Global, Skye Global, Dragoneer, Altimeter, Abdiel, Addition, Coatue all down a ton already (tbh pretty much every equity hedge fund besides the MMs are). Crazy how quickly a coveted analyst job can be pulled out from underneath you -- I don't think a lot of younger folks that started careers post financial crisis have really appreciated the volatility of the hedge fund industry during the last decade's bull run but it's becoming very apparent now.
latest numbers for coatue were down 10-15% or something to that effect. wouldn't say that's "a ton," unlike some of the others that are down 30%+
Yes but a bunch of the crossover funds aren't marking down their private investments -- their true portfolio value is down significantly more than they're reporting. Where they get into trouble is when they do exactly what D1 did which is using their private investments as collateral for leverage in their public books which then forces them to mark private investments to market leading to a margin call when everything goes to shit at once (which is what II reported before they were forced to take down their article).
https://empirefinancialresearch.com/articles/d1-and-tiger-global-clobbered-coatue-investor-presentation-four-insights-from-an-investing-legend-on-whats-happening-in-the-markets
Coatue is fine.
Tiger Global..not so much.
Trying to put together a list of lean L/S SMs that are down less than the mkt (YTD) - basically the top tier shops that are still left. So far I've got viking, soroban, third point, baupost, Coatue - any others you would add here? Thanks
Neither Third Point nor Baupost (especially not Baupost) is a L/S equity fund
Sorry - lean but still attractive non-macro / quant / exclusively distressed SMs. Any others belong on the list?
What type of fund is baupost?
One that doesn't make any money
Does anyone have a sense how Farallon is doing this year?
A few of the funds you mentioned in there may be doing better than you think. 13F data is unreliable because it only shows total mkt value of current holdings. A lot of these funds have been selling into cash aggressively over the past year. Hence much smaller AUM reported on 13F.
So all of these tiger cubs were just SM L/S funds, leveraging on tech blindly and putting some money on private markets . Is it for real? How can these blue-chip fund managers have not thought of this situation before
they've come out of this as billionaires. they knew exactly what they were doing.
Because LPs agreed to keep throwing money at the fund/strategy.
https://www.institutionalinvestor.com/article/b1ymbslxy7103c/We-Regret-the-Error
So whats the real story? Even with inaccuracies I highly doubt II would've put out the story if it wasnt at least mostly true
Suspect there is some truth to it… any one have more color? Whitney Tilson said this too on twitter
might be the first thread about D1 i've ever seen on WSO w/o dan's fanboys saying "dan's the man" "i'd give my left nut to work at D1" at every turn
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