EDITOR’S
VIEW
t.griffiths@hfmweek.com
WHAT’S IN A NAME?
THE STORY BEHIND HEDGE FUND MONIKERS
H
ow much patience does the contemporary hedge fund investor
have? More than their pre-crisis
counterpart, perhaps, but less
than some managers would like to think.
Harbinger Capital Management founder
Phil Falcone has certainly done his best
to explore the depths of their endurance.
Having skyrocketed to the top of the industry tree during the 2006 US real estate glut,
he has spent the past half a decade testing
investor patience with a gradual shift towards
illiquid assets, headlined by his LightSquared
wireless internet project.
HFMWeek tracked down a host of
Falcone’s investors, with their opinions of
the man and his plan listed in this issue’s
main feature. Few doubt his talent as a
trader. Almost all question his faith in
LightSquared. An SEC investigation hasn’t
helped sentiment.
The headline development is that Falcone
appears poised to move out of hedge funds
altogether. Many will have suspected this
already. But just how much investors knew
about his long-term objectives is unclear –
most seem to be in the dark. Ironically then
for a man dreaming of a connected America,
the symptoms of poor communication are
likely giving him restless nights.
At the other end of the spectrum, this
issue is filled with a host of launches, suggesting the industry remains an appealing
prospect for manager and investor alike.
Those that make a commitment will do well
to signpost their intentions early.
TONY GRIFFITHS, EDITOR
#132
AS MARKETS JUDDER AND LURCH from
one extreme to the other, protection
has become an increasingly high
priority for investors who have been PR AE
SIDIUM
bruised all too often by over-corMANAGEMC APITAL
ENT
relation. The absolute returns that
hedge funds strive to provide offer
one solution, explaining why notions of
‘defence’ and ‘protection’ have been highlighted by funds to
investors ever more frequently in recent months.
For South African hedge fund manager Praesidium Capital
Management, it is easier than most to expand on such
themes. Praesidium is the Latin term for protection and,
fittingly, the firm’s website emphasises that its priority is to
“protect capital in times of uncertainty”. The asset manager’s
one hedge fund also applies the theme through “significant
use of derivatives in order to protect capital and enhance
returns”. Aside from its hedge fund, the boutique manager
formed in 2003 also runs managed accounts trading credit
strategies for individual clients.
The term Praesidium has been historically adopted by
some countries, including several Communist states, as a
name for the legislative
seat, and is still used
in Germany in relation
to the Bundestag. Its
place in the Communist
tradition endures –
both North Korea and
the People’s Republic of
China use the term to
describe parts of their
legislative framework. Q
Reporter
Kirstie Brewer
+44 (0) 20 7029 4087
k.brewer@hfmweek.com
London
1 East Poultry Avenue,
London EC1A 9PT
T+44 (0)20 7029 4000
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EDITORIAL
Editor
Tony Griffiths
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t.griffiths@hfmweek.com
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Senior reporter
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Reporter
Will Wainewright
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w.wainewright@hfmweek.com
19 -2 5 J U L 2 01 2
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Maiya Keidan
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Britt Erica Tunick
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PRODUCTION
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60
S E CO N D S
WITH...
EDWARD THORP
Partner, Anchin, Block & Anchin
LLP
CAN YOU DESCRIBE YOUR
CURRENT ROLE?
I specialise in providing
financial accounting,
tax advice and financial
management consulting to
our clients in the alternative
investment industry.
IF YOU WERE DOWN TO
YOUR LAST £1,000, HOW
WOULD YOU INVEST IT?
I would short what I had been
investing in.
WHAT WOULD YOU DO IF
YOU WERE IN PRESIDENT
OBAMA’S SHOES?
It is unrealistic of either party
to believe they can have
their entire agenda enacted.
I would work to come up with
compromises on the issues
that are negatively impacting
economic growth and go
down in history as
the greatest president.
WHO WOULD PLAY YOU IF
THEY MADE A MOVIE ABOUT
YOUR FIRM?
My wife tells me that she
would want George Clooney.
Not that I look like him but
if she had to watch a movie
about me she would want to
look at him while watching
it. Q
MARKETING
Sarah Sweby
+44 (0) 20 7029 4082
s.sweby@hfmweek.com
Editorial director
Gwyn Roberts
+44 (0) 20 7029 4057
g.roberts@pageantmedia.com
Chief executive
Charlie Kerr
ISSN 1748-5894.
Printed by The Manson Group.
© 2012 all rights reserved. No part of this
publication may be reproduced without written
permission of the publishers. No statement in
this magazine is to be construed as an invitation
to invest in hedge funds.
H F M W E E K . C O M 13