Hedge fund millions reduced to nothing

[Judi Lynn]

Source: Miami Herald

Hedge fund millions reduced to nothing
Several Key Biscayne-based hedge funds hit by the subprime mortgage bond crisis last year have been wiped out, leaving investors with nothing.
Posted on Thu, Jul. 10, 2008

BY MARTHA BRANNIGAN
[e-mail]

Several hedge funds run by flamboyant Key Biscayne trader John Devaney that were worth more than half a billion dollars last year have been wiped out, leaving wealthy investors with nothing. Zero.

About 150 investors -- some of them his Key Biscayne neighbors -- have lost roughly $510 million, said Devaney, chief executive officer and senior portfolio manager for United Capital Asset Management.

''Most of the investors were institutions. Some are friends and family who were not solicited to invest,'' Devaney said in an interview Wednesday. ``There were a few high-net-worth individuals who had losses. I was the second biggest investor in the fund.''

The collapsed hedge funds -- Horizon Fund, Horizon ABS Fund, Horizon Fund III and Horizon ABS Master Fund -- invested in junk bonds.



Read more: http://www.miamiherald.com/103/story/599747.html

[WCGreen]

1. I guess that Hedge was trimmed just a litttttllllleeee to close...

[dipsydoodle]

2. Life's a bitch

and then.........all you've got is stately home : Fuck Hall.

[daggahead]

3. Awwwww...

Those poor millionaires got ripped off.

Welcome to our lives!

[theoldman]

4. A fool and his money are soon parted.

Let's see, $510 divided by 150 equals about 3 1/2 million each. If you are worth 100 million or more that is just pocket change.

[Connonym]

5. This is the only thing that consoles me

about having lost my house and also the fact that I don't have any 401k or investments at all. Like the song says, "freedom's just another word for nothing left to lose" That's pretty much where I'm at. At least if they stuck me in debtors prison they'd have to provide me with shelter, food and a bed.

[bluesmail]

6. Get over it.

:evilgrin:

[Indenturedebtor]

7. Oh NOES!!!!!!

Now they'll have to go through all the trouble of filing for a Corporate Welfare check. Those poor bastards.

[customerserviceguy]

18. They might just get that

if they are able to carry back the losses into years where they were making the big bucks. Even if they don't, they'll get to carry forward the losses for fifteen years against future profits. Hedge funds are like gambling at the horse track, except for the tax breaks the former gets that the latter doesn't.

[boomerbust]

8. Phil Gramm

"It's all in your head, nothing to see here. Just move along."

[tanyev]

12. Those investors aren't WHINING, are they?

[formercia]

9. That's why they're called 'junk' bonds.

Oh, well. Sorry folks. I wonder if he recouped his investment.

[Yavin4]

17. The Purpose of a Hedge Fund Is Guarantee profits

by balancing risks and rewards, not gambling on risky investments.

[UpInArms]

10. Greenscam and the Pukes love hedge fund scammers

http://query.nytimes.com/gst/fullpage.html?res=9F04E5DF153AF935A25754C0A9629C8B63&sec=&spon=&pagewanted=all

Published: July 16, 2004

The head of the Securities and Exchange Commission staked out his independence on Thursday as he came under heavy political assault by Republican members of the Senate Banking Committee for his plan to tighten oversight of the hedge fund industry.

In a hearing with odd political dynamics, William H. Donaldson, the Republican chairman of the commission, found allies among the Democrats as he fended off skepticism of the plan by the committee's chairman, Senator Richard C. Shelby of Alabama, and more pointed criticism by most other Republican members.

The Republicans largely reiterated the complaints of some hedge funds and a hedge fund trade association -- whose executives in recent months have made more than $1.5 million in campaign contributions to the two major parties. Some in the industry object to a proposal that would require all funds to register with the S.E.C. in hopes of making them transparent to regulators and investors.

Hedge funds are pools of assets and are largely unregulated. Originally open to wealthy, informed investors, they are becoming more widely available to those of more modest means and are being used with greater frequency by pension funds and other institutional investors.

The criticism Thursday was the second in two days Mr. Donaldson faced. Officials said he was questioned about the plan on Wednesday by Treasury Secretary John W. Snow and the Federal Reserve chairman, Alan Greenspan, at a private meeting of an interagency working group on financial markets. Mr. Greenspan has previously testified that the registration of hedge funds could lead to more regulations with the effect of reducing financial markets' liquidity. Mr. Snow, who has talked with executives and lobbyists opposed to the plan, has privately criticized it along similar lines, officials said.

<snip>

From Wayne Allard of Colorado: ''People who deal with hedge funds are highly sophisticated, highly educated, and they are trading with each other. I wonder if regulators even understand how this market works.''

[madrchsod]

11. the bigger they are the harder they fall....

[Phred42]

13. So....?

Investing is Gambling period.

Sometimes you get the peanut, sometimes you get the shell.

[brentspeak]

14. Unless the particular investor was a low-life, I don't see the reason for gloating

If a wealthy person got their $$$ by ripping off/exploiting the average person, then good. But if not, and they accumulated their money NOT by unethical means, then I don't see why people should cheer.

[bread_and_roses]

19. When "wealth" gets all the breaks, while "wages" pay all the taxes

then wages are supporting the structure that makes "wealth" possible, while wealth skims off the cream, waters down the remaining skim milk, then distributes the watery milk among four times the number of wage earners that it should serve, then....yeah, the underfed, scrawny wage-slaves are going to gloat when one eighteen course meal gets swept off the table. We'll gloat even if we don't get a single scrap ourselves.

I perhaps exagerate (slightly) for effect, and some free-marketeer will no doubt come along with some numbers that show how much in taxes the wealthy pay....

But whatever they pay, it can't be their fair share when the income of the top 1% is shooting off the chart while wages remain stagnant and keep shrinking in relation to the skyrocketing cost of food and fuel.

And I won't even get into the question of whether or not "wealth" can ever be ethical, or ever be gained by anything other than "ripping off/exploiting" the "average" person, since the "average" person depends on income (wages) that are determined by those with wealth. Not to mention that much of this unregulated "trading" on which wealth has been aquired and which we keep hearing "no one really understands" seems to have been nothing more than very complicated Ponzi schemes which, as usual, leave those on the bottom, like the forclosed home-owners, bankrupt while our ever-compliant "Representatives" bail out the schemers to the tune of billions.

I begin to worry about some people in this country freezing to death this winter while the oil Corps are making lots of "wealth" for the upper 1%. So I say gloat away, although some action would be more effective in the long term, still, gloating provides a fleeting psychological lift, and why begrudge it? It's human nature, after all.

[NJCher]

15. hedge fund field is on the ropes

Hahah

So glad I didn't get that hedge fund webmaster job I applied for about a year ago. They turned me down--said there was a "culture clash." When I inquired further, they said, "We get the feeling you care about people. This is just about money."



Cher

[Yavin4]

16. When You're Already Rich, You Should Invest Very Conservatively

No need to take unnecessary risks with your money.