A Tale of Two Hedge Funds
Magnetar and Peloton
David Stowell
“It was the best of times, it was the worst of times . . .”
—Charles Dickens
What a Year
Magnetar Capital had returned 25 percent in 2007—only its third year in business. This return was achieved with significantly lower risk than the S&P 500. Investors were happy; assets under management were among the largest of any hedge fund manager and growing.
On the other hand, the team at Magnetar recognized that investors can have short memories. Magnetar needed to consistently generate new ideas in order to meet investor return objectives. Formerly well-respected hedge funds such as Peloton, Thornburg, and Carlyle Capital were closing at a record pace due to illiquidity. Even the world’s largest ...
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