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Fortress Liquidating Its Once Gargantuan Macro Hedge Fund After 17% Loss In 2015
Just before the first credit bubble burst, Fortress' Macro hedge fund, then known as Drawbridge as well as several other castle-related terms, peaked at just over $8 billion. Together with Phil Falcone's Harbinger, it was one of the most desired venue to work among the young hedge fund crowd.
It has been downhill ever since, and unfortunately for the hedge fund run by Michael Novogratz, which reported $2.5 billion in AUM as of June 30, a number which plunged to just $1.6 billion two months later according to HSBC, as a result of a terrible year, down 13.4% YTD after losing 1.6% in 2014, and having suffered its biggest ever drawdown...
... the macro hedge fund, which does not file an equity 13-F, is liquidating.
According to Bloomberg, Fortress Investment Group LLC plans to close down its macro hedge fund run by Michael Novogratz, according to a person with knowledge of the firm.
The macro hedge fund has lost 17.5 percent this year through September after losing 1.6 percent in 2014, according to filings. Novogratz, 50, a former wrestler and U.S. army helicopter pilot, became sole manager of the macro fund in July.
Which means the fund lost another 3.5% in the past two weeks even as everyone else was busy printing money, almost literally, hand over fist on hopes the Fed is not only never going to hike but will launch NIRP.
As a reminder, Fotress Macro recently made news when it was revealed that it had hired Jeff Feig from Citigroup, global head of currency trading at the time, who was implicated in the massive FX rigging scandal as reported previously. Feig "unexpectedly" quit Fortress in July, less than a year on the job, for "reasons unknown." Perhaps his inability to access FX chat rooms and generate "risk-free" returns contributed to both his departure and Fortress Macro's liquidation?
One wonders if Fortress was long USDJPY, oil and VXX, all of which got crucified in today's session, and how much of today's dramatic move in these asset classes was related to the forced liquidation of the Fortress book.
Finally, the stock of Fortress Investment Group, which was the holding company of Macro and still runs various private equity firms, was not particularly excited by the news.
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Novagratz will continue to do fine. Investors, not so much!
+1 only $1.6B aum left, all of it his.
This three card monte hedge fund has run out of suckers, time to get a new dealer and move to another street corner.
FIG is a cheap stock...might be cheaper though
Sooner or later there comes a time to shut down a 2/20 con .... this one was pretty long in the tooth.
FUCK YOU, FORTRESS!!! BASTARDS!!!!!!!!!!!!!!!!!!!!!!!!!
They are fucking themselves.
Nationstar Mortgage, LLC is tanking too. As they are just as stupid...criminally.
Looks like the FIG leaf has left them nekkid.
They should have just waited for a few more momo algobot vapor ramps.
I blame the PPT
truly amazing the corruption of the money mangement business....where other clueless money managers A give MM B billions for dog and pony...and pole dancing...shows. Money Manager A hasn't a clue and just works at his pension fund...regardless of performance....the 2/20 "B" crew come in buy him dinner, a ski trip and strip club...and boom he is managing $500 Million...which he loses and pension fund manager A...just shruks his shoulders and the retirees goes without. Repeat this a thousands times. Few actually have a clue as to the putting the money to actual use.
can we rescue them yet....I love rescuing people with a billion or two in the bank who destroy investments!
no, the problem for Feig at a firm like FIG is that there are no customer flows to rip off to cover a bad month. He never had a good year "trading" but he was very good at frontrunning clients....a very different skill set.
Anyone looking to studying marketing should study the hedge fund industry because they offer generally shit returns but have managed to market themselves an opposite aurora.
Pure slight of hand basically.