Fool me twice, shame on me:
John Meriwether's Bond Fund Loses 24% on Credit-Market Plunge
2008-03-19 13:42 (New York)
By Katherine Burton and Saijel Kishan
March 19 (Bloomberg) -- JWM Partners LLC, the investment
firm run by ex-Long-Term Capital Management LP chief John
Meriwether, lost 24 percent in its $1 billion fixed-income hedge
fund this year through March 14, according to two people with
knowledge of the matter.
Meriwether's Relative Value Opportunity fund was hurt as
bond managers such as Peloton Partners LLP and Carlyle Capital
Corp. were forced to sell securities to meet margin calls, said
the investors, who asked not to be identified because JWM
doesn't publicly disclose returns. The Greenwich, Connecticut-
based firm, which is selling holdings to reduce borrowings and
lower risk, didn't have any loans called, they said.
``There's been a lot of forced de-leveraging,'' said
Benjamin Sarly, head of marketing at Sanno Point Capital
Management in New York, a relative-value credit fund.
Meriwether declined to comment.
JWM Partners opened a year after Russia's 1998 default
resulted in almost $4 billion of losses for Greenwich,
Connecticut-based Long-Term Capital. The Federal Reserve
orchestrated a bailout by its 14 lenders.
Relative-value funds try to profit from price changes
between related bonds. They rarely make outright bets that a
specific bond will rise or fall. Investors in these funds expect
to make about 1 percent a month.
