Opsraie Closing Its Largest Hedge Fund

By David Enke | September 03, 2008 | 2:38 PM | 2 Comments

Ospraie Management is closing its largest hedge fund after it has been down 38.6 percent this year as a result of bad bets on commodity stocks (see Bloomberg article, CNBC article). The fund got hammered in August, falling 26.7 percent after a sell-off in energy, mining, and commodity stocks. The closing leaves Ospraie Management with three funds that manage more than $4 billion of assets. Amazing, the $4 billion figure is down from $9 billion in March. Talk about the dog-days of summer. Lehman Brothers, with its own problems (see posts here and here) bought a 20 percent take in Ospraie Management in 2005 - yet another unfortunate turn-of-events for Lehman. Of interest is the quote from Dwight Anderson, manager of Ospraie Management:

"The fact that I had a horrible quarter is a statistical probability, and we had always told people there is that possibility. We do everything that we can to manage the risk, and I think we're better at it today than we were a year ago.''

In fact, they managed risk so good that they lost over half their assets in less than six months and are closing their flagship fund. Nothing says "chasing returns" like a portfolio cut in half. Some times you just have to tell it like it is. People are forgiving, even when you lose lots of money. Just ask Brian Hunter.

bullbeartrader.com

It was global demand We all know the commodity run up was the result of the realization that global demand has overcome global supply and oil was going to go over $200 a barrel and ... Ooops! Oil is at $109? It couldn't have been the speculators - could it??? Nice piece! Submitted by Jerry Slusiewicz on Thu, 2008/09/04 - 10:09am » reply |

Is it really another Is it really another unfortunate turn-of-events for Lehman... Is anyone paying attention to anything over there? Submitted by pmaclaverty on Wed, 2008/09/03 - 3:25pm » reply |