In the past two years, as most hedge fund managers were engaged in damage control and trying to avoid liquidating funds, Seth Klarman managed to rise above the chaos and double his hedge fund’s assets. According to Bloomberg, Baupost Group LLC, which now manages $22 billion, didn’t change its strategies when the financial crisis hit the market, and Mr. Klarman’s tenacity seems to have paid off. In 2008, while many hedge funds took disastrous losses, Baupost managed to raise almost $4 billion by focusing on corporate bonds that would provide solid returns even in the face of a worsening economy.
Baupost Group’s great success is attributed to its manager and his individual style of value investing, which he has followed throughout his investing career. . While, like most investors who adhere to the value investment strategy, Mr. Klarman focuses on undervalued securities, he says he excels in complicated situations and complex, often illiquid assets, benefitting from the reduced number of potential investors.
Today, Mr. Klarman says that he is wary of a decrease in the dollar’s value and a rise in inflation and interest rates, and he anticipates that stocks will yield poor returns for as long as ten years. |
