Hedge Fund Explodes Eating Japanese
Endeavour Capital LLP, the hedge-fund firm founded by former Salomon Smith Barney Inc. traders, fell about 28% this month on losses in Japanese bonds.
Endeavour seeks to profit from discrepancies in the prices of various fixed-income securities and currencies, a strategy known as relative-value trading.
The fund suffered as the spread, or difference, between yields on Japanese 7- and 20-year bonds widened to 1.44 percentage points on March 17, the most in almost nine years.
As it attempted to unwind its positions, the $2.88 billion Endeavour Fund sold "substantially all" of its Japanese government debt this week,
Gina Sanchez, who manages about $4.2 billion for the California Endowment in Los Angeles: "We're experiencing a massive de-leveraging event.
We're really going to find out who has actually been hedging and who has got too much leverage on. There's going to be more blowups."
Hattip To Bloomberg.
Endeavour seeks to profit from discrepancies in the prices of various fixed-income securities and currencies, a strategy known as relative-value trading.
The fund suffered as the spread, or difference, between yields on Japanese 7- and 20-year bonds widened to 1.44 percentage points on March 17, the most in almost nine years.
As it attempted to unwind its positions, the $2.88 billion Endeavour Fund sold "substantially all" of its Japanese government debt this week,
Gina Sanchez, who manages about $4.2 billion for the California Endowment in Los Angeles: "We're experiencing a massive de-leveraging event.
We're really going to find out who has actually been hedging and who has got too much leverage on. There's going to be more blowups."
Hattip To Bloomberg.
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