Manager 'truly sorry' for blowing up hedge fund
Source: CNBC
A hedge fund manager told clients he is "truly sorry" for losing virtually all their money.
Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capitaldown from the roughly $100 million it ran as of late March.
"I take responsibility for this terrible outcome," Li wrote in a letter to investors, which was obtained by CNBC.com.
"My only hope is that you understand that I acted in an attempthowever misguidedto generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse," he added.
Read more: http://www.cnbc.com/id/102356275
Lose almost $100 million, I guess a sincere "sorry" is good enough.
belzabubba333
(1,237 posts)AtheistCrusader
(33,982 posts)belzabubba333
(1,237 posts)rurallib
(62,477 posts)TheCowsCameHome
(40,169 posts)No big deal. Now step out onto this ledge and tell me whay you see down there...............
christx30
(6,241 posts)It needs a big name. Big and round... round... ound... GROUND! I wonder if it'll be friends with me?"
louis-t
(23,309 posts)"Don't try to find me, as I won't be home that day."
merrily
(45,251 posts)merrily
(45,251 posts)Roy Rolling
(6,943 posts)Well, he said he is *truly* sorry. I can accept that, but a simple "I'm sorry" without the "truly" would have been a different story.
More than likely, all of that lost money is now in the hands of even bigger weasel hedge fund managers than Li.
LuckyLib
(6,821 posts)They gambled and lost. Oops!!
hatrack
(59,599 posts)FLPanhandle
(7,107 posts)That was great!
NCjack
(10,279 posts)Pathwalker
(6,600 posts)Idiot.
Lucky Luciano
(11,267 posts)More people than I thought had shorted the Swissy vs the Euro on expectations that the Swiss would not allow the pair to breach the 1.20 level that the Swiss National Bank set up to prevent the franc from getting too strong. The SNB had to sell a lot of francs and buy a lot of Euros to do this. With the onset of European QE, the SNB decided to drop the peg forcing s spectacular strengthening of the Franc vs the Euro only a couple days after the SNBsaid the peg was vital.
Why did some people do this? Because they believed the SNB, so they felt safe shorting the EURCHF pair and collecting the interest rate differential between the franc and the Euro - Francs have an even lower rate than Euro. A classic carry trade in other words - where extremely low volatility coupled with interest rate differences generates returns. Dropping the peg caught these people off guard and they got clobbered by an initial 41% move that settled to a 20% move. Before that, a one standard deviation move for the entire YEAR (as opposed to a one day move) was 1.75%.
Hubert Flottz
(37,726 posts)IMHO...
Liberal_in_LA
(44,397 posts)blkmusclmachine
(16,149 posts)Kablooie
(18,645 posts)Now put this gun to you're head and pull the trigger so I can be sorry that you're dead.
Tace
(6,800 posts)Hedge funds, by definition, are funds for wealthy people to invest money that they can easily afford to lose. They generally take more risk in order to potentially generate higher returns.
This is stated up front by a hedge fund when someone seeks to invest with them.
Nobody is eating cat food or had their retirement wiped out.
It's embarrassing for a hedge fund manager to lose the funds, but it is clearly stated as a definite possibility in paperwork that investors must sign in order to invest.
Owen Li may just turn around and start another hedge fund. And, he may find wealthy people willing to invest.