Atticus Capital Has Lost Over Five Billion Dollars in 2008

According to various sources (Forbes, Reuters and others), activist hedge fund Atticus Capital has dropped over five billion dollars so far in 2008. The company was reported to be controlling over $20 billion in total assets of the end of 2007, and is now down to approximately $14 billion dollars.

You may read this and think: yet another hedge fund that was rocked by the subprime mortgage fallout in the United States. Not so. According to Forbes, most of the losses have come from a 32.9% loss in the multi-billion dollar Atticus European fund and a 25.0% drop in the Atticus Global Fund.

According to Reuters, the fund "employs a variety of investor lock-ups", and "saw few investor redemptions".

This down year will mark a sharp reversal of fortunes for fund founder Tim Barakett. According to published reports, Barakett earned almost $700 million dollars in 2006 and an additional $540 million in 2007 after two extremely strong years for his funds. Barakett turned down a chance to play for the New Jersey Devils in 1986, instead choosing to focus on a Wall Street career. The decision obviously turned out to be a shrewd one.

The fund's last "down" year was in 2002.

Atticus tends to focus on buying up large stakes in companies that it believes are in sectors on the brink of a turnaround. Some of the companies that Atticus has invested (heavily) in over the past few years include: Phelps Dodge, ConocoPhillips and Sears. The fund relies heavily on options to maximize its positions (and gains).

The fund was initially opened in 1995. The co-founder of the fund is Nathaniel Rothschild, an heir to the Rothschild family banking fortune.

How will the fund's investors react if things continue to turn south for Atticus?

Source: Hedge fund Atticus Loses More Than $5 Billion



Filed under: Hedge Fund News | The Economic Meltdown | General Market News