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hedge funds ready to dump, g. soros.

  1. 945 Posts.

    By Mike Larson

    Dear Andrew,

    Speaking at MIT, legendary hedge fund manager George Soros just dropped a huge bombshell: Up to two-thirds of the world’s 10,000 hedge funds — massive investment pools with $1.9 trillion in assets — will FAIL in the weeks ahead.

    If he’s right — and if anybody should know, it’s Soros — up to 66% of those $1.9 trillion will soon be dumped onto the market and deal a near-fatal blow to stock investors worldwide.

    Soros has every reason to worry: Hedge funds are highly leveraged. They’re reeling from the worst financial crisis since the Great Depression. And their investors are losing money hand over fist.

    Imagine paying high management fees and forking over the minimum investment of $1 million or more — and then LOSING nearly 16% of your money in ten short months — all with an investment that was supposed to HEDGE against risk or even profit in bad times.

    And that’s just the average — many funds are faring even worse: Farallon Capital Partners has lost 24% of investors’ money. Investors in Citadel’s flagship hedge fund have kissed nearly 40% good-bye!

    And returns are NOT improving: In September and October alone, the average hedge fund investor lost a staggering 11.4% — an estimated $216 billion!

    Unsurprisingly, hedge fund investors — including many of the nation’s largest pensions and universities — are wounded, bleeding and stampeding for the exits, demanding that these funds return what’s left of their money.

    But as a rule, hedge funds only allow investors to ask for redemptions once each quarter. Many of them require that investors who want their money back must ask for their redemptions before November 17: THIS SUNDAY.

    These hedge funds will then have just 45 days to raise the cash needed to repay investors before yearend. So beginning next Monday, many of these huge funds will have no choice but to dump assets to repay their investors!
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