Clarium fell 23% in 2010 making it the third straight year of losses for Peter Thiel‘s hedge fund.
Total AUM are now down 90% to ~$680 million from its 2008 peak of $7.2 billion – money made when the venture capitalist correctly predicted the implosion of the housing market.
But “clients who stuck with him suffered losses of 65 per cent from the mid-2008 peak,” Bloomberg reported.
It’s not that Thiel’s latest forecasts were wrong so much as his he had “poor market timing and a lack of risk controls” clients told Bloomberg. Investors blame weak risk-management and illusive trading skills for their huge losses.
The worst months were apparently April (down 6.5%), June (down 7.7 %), September (down 8.4%) and November (down 7.8%).
“Thiel is too committed to his views, lacks the flexibility to get out of investments in time when they go against him and doesn’t have adequate hedging in place to mitigate losses, the investors said.
While the losses have eroded most of his firm’s assets, Thiel has no plans to give up. “Peter is not in the hedge-fund industry to get rich, he already is,” said Iluka’s Kamel. “The draw for him is the intellectual challenge.”
The problem with that last line, is that his clients are in the hedge fund industry to get rich.