Most people are familiar with Harbinger's woes by now, with the SEC charges and all. Still can anyone tell me what happened to Stark Investments? This venerable Milwaukee based shop used to have one of the largest current AUM among hedge funds but has been bleeding capital rapidly and appears to be in a free fall. The firm now manages less than $1 B, having at one point had more than $14 B under management.
They were hurt badly during the downturn then suffered an exodus of partners. They just had to shut down their flagship multi-strategy fund, among other funds. I wonder how all of these affect their head counts.
Since Tony Stark decided to pull out of the arms industry, the business model has taken a beating. Given his new energy source, however, it appears a turnaround is highly likely. There are some staffing issues, namely a murderous partner, so there could be a few hiccups along the road to recovery
They had issues surrounding the liquidity of their investments. A lot of their funds were locked up in illiquid investments, the more liquid stuff had to be sold to meet redemption requests. When the bounce came, this harmed them as the remaining investments they had left were of a weaker quality than their original pre crisis portfolio. Also I think there were more general latent issues of style drift and too rapid growth that were tolerated by investors while performance was strong, but were another reason to exit when things got bad.
Would this illiquid investment possibly be some sort of robotic power-suit? And do you think one of the major catalysts to redemption was the death of Don Cheadle?
That's gone right over my head.
Haha now I get it....
http://today.msnbc.msn.com/id/36975419/ns/today-entertainment/t/don-che…
(I haven't seen Iron Man)
Anon56, many thanks for the very informative explanation. I know that the guys who used to run their Asia office left in large part due to disputes over what to do with all their illiquid positions.
I actually didn't have the whole Iron Man/Avengers reference in mind when I posted this. Nice one guys. Hmmm...maybe for the next Iron Man sequel they can make it about Stark Industries comeing in to the rescue of Stark Investment, run by Tony's long lost cousin exiled in the Midwest. Greg Liepmann will have a cameo in the movie...as himself. The post- crdeit scene will be about them hunting the elusive London Whale while enjoying some shawarmas.
They are not down to 1B although I know they have certainly suffered some serious redemptions...you are probably looking at the 13-F of one of their legal entities. I know they were especially lenient with redemptions in the early periods of the financial crisis which led to a higher level of outflows than some competitors with tighter lock-up.
Et eos porro et cumque qui voluptatum quam. Reprehenderit at nulla et qui et omnis.
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