A number of hedge funds have, unsurprisingly, been hit by the recent financial meltdown. So, it makes sense that many are taking their money out of the markets and putting it into cash.
WSJ: Some hedge-fund titans have yanked most of their money out of the stock market, a bearish sign amid Monday’s euphoria and an indication of how the hedge-fund business is changing amid chaos…
In recent days, Steven Cohen, the hedge-fund manager who runs the $14 billion SAC Capital Advisors, moved about half his funds, or about $7 billion, into money-market and other short-term securities, eliminating much of his fund’s exposure to the stock market, says a person close to the fund. Mr. Cohen plans on sitting on the sidelines for the rest of the year — trading a small portfolio himself but keeping shuttered most of the stock portfolios of his other managers.
Israel Englander, who runs the $14 billion Millennium Partners fund, has shifted about $6 billion from the stock market into cash, a person close to the fund says.
Meanwhile, John Paulson, manager of $35 billion Paulson & Co. — who made a spectacularly successful bet against the housing market last year — has much of his fund in cash equivalents.
The only fund manager we’re surprised to hear has put his money in cash is John Paulson, since Paulson was reportedly still doing quite well. In fact, so were Cohen and Englander—relative to the Dow.
Mr. Paulson’s main fund is up about 20% this year; Mr. Englander’s main fund is down 0.5%; and Mr. Cohen’s main fund is down more than 9% through September. This compares with a 29% loss in the Dow Jones Industrial Average, year to date.
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