ExpectedValue Posted November 10, 2010 Share Posted November 10, 2010 This is pretty interesting but it makes sense. To me, it must be really difficult for him to find opportunities with $23B in AUM. Even if he went 50% cash, he would still have to deploy more than $10B which is a real feat right now. http://www.businessinsider.com/seth-klarman-baupost-group-to-return-capital-2010-11 -Seth Klarman's Baupost Group will return 5% of its capital to investors at the end of the year -Baupost has generated an monstrous $6.5 billion in net investment profits from January 1, 2009 to September 2010 -This growth has propelled the firm to an enormous $23 billion in assets. Link to comment Share on other sites More sharing options...
scorpioncapital Posted November 10, 2010 Share Posted November 10, 2010 Unless it continues, I don't see how returning $1 billion out of $23 billion is going to solve the problem. Link to comment Share on other sites More sharing options...
StubbleJumper Posted November 10, 2010 Share Posted November 10, 2010 Well, shedding $1B out of $23B AUM might not seem like much, but at the margin, it's pretty significant. Suppose Klarman has enough great ideas to soak up $5B, a collection of very good ideas that soak up another $5b, and some okay ideas for another $5B. If that were the case, he'd have about $8B too much capital which would probably be left in treasuries or something. Dumping $1B of that $8B of surplus capital would actually take a pretty large bite out of his problem. Not sure just how few ideas he has and how large his surplus really is, but... SJ Link to comment Share on other sites More sharing options...
ExpectedValue Posted November 10, 2010 Author Share Posted November 10, 2010 Unless it continues, I don't see how returning $1 billion out of $23 billion is going to solve the problem. The way I figure it, sometimes Klarman goes to 50% cash when he doesn't see many opportunities. In that case, the 5% becomes 10% which when you are getting in the billions is pretty significant. So maybe he is trying to put a soft cap on his assets. Link to comment Share on other sites More sharing options...
stahleyp Posted November 10, 2010 Share Posted November 10, 2010 According to the Schoder interview: "Berkshire has put 60% of its cash flow into equities so far this year. It’s an increase from zero, which could easily be interpreted as a portfolio repositioning, but it is not. Warren is still building cash. He doesn’t like bonds right now, but he likes cash. The feeling of needing to be fully invested obstructs a lot of money managers." So, Buffett is building up cash and Klarman is spending money back to shareholders. Something to consider. Link to comment Share on other sites More sharing options...
ExpectedValue Posted November 10, 2010 Author Share Posted November 10, 2010 Buffett can afford to sit on larger amounts of cash than Klarman though, because Berkshire can go out and swallow entire businesses (Burlington Northern). Link to comment Share on other sites More sharing options...
rijk Posted February 25, 2011 Share Posted February 25, 2011 klarman raised 12 billion only three months after he returned 5 billion to investors???? so what happened after not seeing many opportunities only 3 months ago, looks like klarman is getting ready to take advantage of a huge opportunity...... http://boston.citybizlist.com/7/2011/2/24/Seth-Klarman%E2%80%99s-The-Baupost-Group-has-Raised-12B-for-its-Hedge-Funds--cbl.aspx Link to comment Share on other sites More sharing options...
CR Posted February 25, 2011 Share Posted February 25, 2011 Read the article a bit closer. That $12B is a sum of all of the amounts his funds have initially raised since inception in 1983. The article mentions nothing about raising money in the last 3 months. Link to comment Share on other sites More sharing options...
rijk Posted March 1, 2011 Share Posted March 1, 2011 ok, thanks for the clarification, strange article,... doesn't seem to have any other purpose than to mention a huge value and baupost/klarman....... regards, rijk Link to comment Share on other sites More sharing options...
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