Clarium Capital Hedge Fund Tracker NotesThe following piece on Clarium Capital Management is being published as part of our daily effort to track hedge fund events in the industry. To review other hedge fund research please see our Hedge Fund Tracker Tool.
Resource #1: (11.5.08) Clarium Capital Management LLC, the hedge-fund firm run by PayPal co-founder Peter Thiel, slumped 18 percent in October, its biggest monthly decline, because of losses on bonds.
The firm's Clarium LP fund reported a year-to-date loss of about 3 percent, wiping out the 58 percent gain it made in the first half, according to estimates given to investors.
``Clarium is known for taking large risks, and their performance reflects that,'' said Patrik Safvenblad, head of hedge-fund research in Stockholm for DnB NOR ASA, Norway's biggest bank. ``Investors can get overly optimistic that periods of strong performance will continue.''
The $1.7 trillion hedge-fund industry is experiencing its worst year in almost two decades because of declining stock markets and a credit freeze that started with rising defaults of U.S. subprime mortgages. Hedge funds lost an average 9.26 percent last month and declined 19.7 percent this year, according to Hedge Fund Research Inc.'s HFRX Index.
Clarium had 81 percent of its money in positions used by investors when they expect a widening spread, or gap, between bond yields, such as for 10-year Treasury notes and 30-year bonds. Instead, yield spreads narrowed in October. Armel Leslie, a spokesman for the San Francisco-based firm, declined to comment. Source
Resource #2: Here is a detailed 13F Holdings Analysis on Clarium Capital Management
The New York State Common retirement Fund invested $5 million in Clarium Capital’s Global Macro Fund. The deal was completed in March 2008 and will be part of the Retirement Fund’s Absolute Return Strategy.
Clarium’s LP Fund fell 13% in August largely due to its bets against the dollar. The Fund is still up 27% YTD. “As a macro hedge fund, Clarium seeks to profit from broad economic trends by trading stocks, bonds, currencies and commodities. Macro hedge funds have been the year's best performers.” Clarium has made major adjustments to their strategy recently. Around August 1st the firm “borrowed $4.60 for every $1 of capital, yet now it is using no borrowed money and is investing just 36 percent of his assets, according to the update given to investors.”
Calrium’s total Assets Under Management rose to $7.35 billion in July 2008. The firm has enjoyed gains due to its short equity and dollar, long oil strategy. Managing Director Kevin Harrington has stated that they have reduced their oil trades, but continues to bet against the dollar.
Robert Morrow of Clarium Capital wrote an article about how politics affect global macro investors. He talks about trade and immigration among other topics.
This is a profile of Hedge Fund Manager Peter Thiel. Thiel made his millions with Internet startup PayPal, and has since devoted his energy and money to Clarium Capital. The article describes the Thiel career, the firm’s goals and work environment at Clarium. “Thiel has wagered all of his clients money on the conviction that aftershocks from the go-go 90’s will jar the US…the housing bubble will collapse and economic growth will stall…an oil shock will add to the pain.”
An article from 2006, Thiel says that Global Macro Funds will benefit from the current market conditions. Global Macro Funds have a low correlation to other hedge funds at just under .5 and look to benefit from surging oil prices. The popularity of Global Macro Funds continues to rise.
Clarium’s Vice President of Research and Trading Patrick Wolff wrote a detailed report of what he calls the “Long Boom” and its afftects on the Baby Boomer Generations. He says that after the boom ended in 2000, people are faced with using some combinations of working longer, spending less, and “compensating for lower expected returns with greater leverage.” He believes that Macro Managers must adjust accordingly if people choose to “increase risk instead of accepting lower returns.”
Managing Director and Head of Research Kevin Harrington wrote a lengthy report on oil. He speculates as to why the price has gone up and the effects this has on the economy.
A list of the top Hedge Fund Managers from the University of Notre Dame. Thiel makes the list on page 9. It is interesting to note that his firm does not charge a management fee, but rather collects 25% of the profits.
This article talks about Asian Strategies of Hedge Funds. There is a sidebar on Clarium Capital on pg. 25 in which the firm’s Chief Investment Officer stresses the growing importance of Asia, mostly China, India and Japan, in making Macro decisions.
Pete Thiel is quoted in this article about oil price surges. He discusses how events likes hurricanes can affect prices. Clarium is heavily invested in oil.