Think it’s too late? The world’s greatest fund manager didn’t make money until he was 52

Jim Simons had modest wealth at 52; now he’s worth $ 23 billion

Jim Simons

Financial markets — and risk taking in general — are largely the domain of the young. Early adulthood is the time to swing for the fences while middle age is a time for prudence, perhaps risking a manageable part of the nest egg.

Yet that’s not always true. It’s particularly untrue of some of the world’s greatest investors.

Among them is Jim Simons, the king of quants. Yesterday Gregory Zuckerman published “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.”

It details how a 40-year old math professor walked away from a job at Stony Brook University to try trading currencies. He had no idea what he was doing but raised $ 4 million with a few partners. He recruited renowned mathematicians to help him. It didn’t work and losses topped $ 1 million.

“If you make money, you feel like a genius,” he told a friend. “If you lose, you’re a dope.”

He gathered more data and persevered through the 1980s with a mixed record. In 1989 he lost 4%.

Finally, Simons along with recently recruited colleagues Henry Laufer and Elwyn Berlekamp, started to focus on short-term patterns — Monday’s price action often followed Friday’s, while Tuesday saw reversions to earlier trends.

It worked and the Medallion fund gained 55.9% in 1990. It hasn’t stopped. His fund as generated average returns of 66%, racking up gains of $ 100 billion. No other fund or manager is even close. A $ 10,000 investment 30 years ago excluding fees would be worth $ 40 billion today. Even after fees, it would be worth $ 195 million.

How the fund makes money is one of the world’s most-closely guarded secrets but it’s story isn’t. Simonds certainly had mathematical talents but he know almost nothing about markets when he started out at age 40 and managed to amass one of the world’s great fortunes.

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Mnuchin backs proposal to double IMF’s crisis fund

© Reuters. Treasury Secretary Steve Mnuchin speaks at a news briefing © Reuters. Treasury Secretary Steve Mnuchin speaks at a news briefing

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin on Friday said he welcomes a proposal to double the size of the International Monetary Fund’s $ 250 billion crisis lending fund as part of a deal to maintain overall IMF resources.

Mnuchin, in a statement to the IMF’s steering committee, said he backed the funding increase to ensure the global lender remained adequately resourced to respond to potential crises over the medium term.

He also called for various reforms to streamline the fund’s costs, modernize salaries and benefits, and adopt a more independent, centralized risk management system.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Record highs in U.S. stock market not enough to attract fund investors

© Reuters. FILE PHOTO: Traders work on the floor at the NYSE in New York © Reuters. FILE PHOTO: Traders work on the floor at the NYSE in New York

By David Randall

NEW YORK (Reuters) – Investors retreated from the U.S. stock market last week despite the benchmark reaching new record highs, pulling nearly $ 9.1 billion from mutual funds and exchange-traded funds that hold domestic stocks, according to data released Wednesday by the Investment Company Institute.

The move away from the U.S. market came on the heels of $ 1.1 billon in inflows the week before, continuing a pattern in which the outsized gains in S&P 500 have been unable to attract investors en masse. The benchmark index is up more than 20% for the year to date, thanks in part to expectations of at least one equity-friendly interest rate cut by the Federal Reserve this year. Over the same time, investors have pulled nearly $ 67 billion out of domestic stock funds.

Instead, investors continued to pile into fixed income by sending $ 10.4 billion into taxable and municipal bond funds, extending a streak of positive inflows over every full week of the year that has brought more than $ 255 billion into the category.

World stock funds, meanwhile, continued a 9-week losing streak by dropping slightly more than $ 1 billion in assets. Investors have pulled approximately $ 20.5 billion from the category since the start of the year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Bloomberg: Japan’s Government Pension Investment Fund has started to hedge overseas bond investments

Could hit the USDJPY

Bloomberg is reporting that Japan’s Government Pension Investment Fund has started to hedge overseas bond investments.

The move could tilt the USDJPY lower and push the price to the lower end of the recent range.

The author notes that the “details are sketchy”, but it is worth keeping an eye on.

The USDJPY has moved lower and trades at new session lows at 108.479. The high for the day was up at 108.683. The next target comes in at 108.37 (high from July 16) and then the 100 hour MA/trend line at 108.308.  The 200 hour MA is lower at 108.089.  The recent lows are down at 107.20 (low for July) and the low for June was down at 106.77.  

First things first, if the “sketchy details” are true, a break below the 100 hour MA and trend line at 108.308 would tilt the bias more to the downside for the pair. 

USDJPY moves lower

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Chinese private equity firm Centurium raises over $2 billion in debut fund

© Reuters. FILE PHOTO: Jenny Qian Zhiya CEO of Luckin Coffee celebrates the company's stock trading during the IPO at the Nasdaq Market site in New York © Reuters. FILE PHOTO: Jenny Qian Zhiya CEO of Luckin Coffee celebrates the company’s stock trading during the IPO at the Nasdaq Market site in New York

By Julie Zhu

HONG KONG (Reuters) – China’s Centurium Capital, a big backer of domestic startup Luckin Coffee, said it has raised more than $ 2 billion in its debut fund, giving the private equity firm more firepower to cut deals involving the world’s second-largest economy.

The firm, co-founded by the former head of Warburg Pincus Asia Pacific, David Li, said in a statement on Wednesday that Centurium Capital Partners 2018 L.P. raised the sum in U.S. dollars.

The fund secured strong interest from global investors, known as limited partners (LPs), such as pension funds, sovereign wealth funds and funds-of-funds, it said.

Investors in the fund include Singapore’s GIC Pte Ltd [GIC.UL] and Temasek Holdings (), Canada’s Ontario Teachers’ Pension Plan, China Investment Corp (CIC) and U.S. pension fund Washington State Investment Board, said two people with direct knowledge of the matter.

Centurium declined to comment on the fund’s LPs. All the investors didn’t immediately respond to requests for comment.

The U.S. dollar fund will help Centurium invest in Chinese firms that use overseas structures such as variable-interest entities.

Centurium joins several China-focused private equity and venture capital managers who raised $ 17.3 billion in dollar-denominated funds in the first half of the year, versus $ 13 billion over the same period last year, according to data provider Preqin.

Launched in March 2018, Centurium’s maiden fund reached the first close of nearly $ 1 billion three months later and has beaten the $ 1.5 billion and $ 1.98 billion fundraising targets since then.

BESPOKE SOLUTIONS

Beijing-based Centurium was set up in early 2017 by Li and two other partners. Li had worked with Warburg Pincus for 14 years and led several investments for the U.S. buyout firm in China, including in top car rental service provider CAR Inc.

“After helping several entrepreneurs fulfill their entrepreneurial dream for so many years, I also have my dream of launching our own (investment) firm,” Li told Reuters.

Centurium primarily seeks control and significant minority investment opportunities across China’s consumer, services and healthcare sectors where it looks to boost operational efficiency and tackle structural deficiencies.

“The Chinese business environment nowadays needs a new generation of investors that combine the global PE best practice and local experience,” Li said.

“Instead of being a pure capital provider, firms like Centurium can better integrate with local markets and be more efficient and responsive to provide bespoke local solutions to new challenges and opportunities faced by Chinese entrepreneurs.”

Centurium began to gain recognition last year when it made a big bet on Luckin Coffee, the Chinese challenger to Starbucks Corp (NASDAQ:). It invested about $ 180 million in Luckin in the startup’s first two fundraising rounds.

Li said that Centurium has invested about 40% of the capital raised in the debut fund in five firms in China and aims to fully deploy the fund by the end of next year.

Besides Luckin, Centurium’s portfolio firms include Keking, an online logistics services provider, China Biologic Products, a biopharmaceutical firm which makes and sells plasma products, and online education platform Happy Kids Education.

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Stock Market News

Hedge fund Vor Capital secures investment from Borealis Strategic: sources

Hedge fund Vor Capital secures investment from Borealis Strategic: sources Hedge fund Vor Capital secures investment from Borealis Strategic: sources

By Svea Herbst-Bayliss

BOSTON (Reuters) – Borealis Strategic Capital Partners, which invests in new hedge funds, has written its first check to commit capital to Europe-oriented stock fund Vor Capital, two people familiar with the matter said on Friday.

Vor Capital launched a year ago with a plan to invest in mid-sized European internet companies. It is run by Brant Rubin, who previously worked for hedge fund Luxor Capital.

Borealis did not answer a call for comment. Vor did not return an email seeking comment.

The sources did not say how much Borealis was committing but one said it would bring Vor Capital’s total assets under management to roughly $ 100 million.

Many institutional investors are giving hedge funds the cold shoulder, criticizing their high fees and generally lackluster returns. But investors are still eager to find promising newcomers who could outperform existing rivals and often wait until an established investor has made a commitment that could prompt others to follow along.

During 2018, its first year in business, Vor delivered returns of 15 percent, a person familiar with the returns said. Since January the fund has returned roughly 10 percent and it made money in December 2018, a time when most hedge funds lost money, the source said.

The average hedge fund gained roughly 6 percent in the first three months of 2019 after having lost 5 percent last year, Hedge Fund Research data show.

Borealis plans to provide start-up capital to roughly four to six funds, including some that might pursue activist strategies, one of the people familiar with the matter said.

The firm is run by Scott Schweighauser and traces its roots to Aurora Investment Management, a fund of funds that once managed $ 14 billion in assets. Schweighauser was Aurora’s president and oversaw the firm’s liquidation in 2016 after its owner Natixis Global Asset Management decided to shut it down.

Borealis is getting into the seeding business at a time it is becoming ever tougher for new hedge funds to sign up clients. Firms like Blackstone (NYSE:) Group, Paloma Partners, Protege Partners and Reservoir Capital Group also make start-up investments with new hedge funds.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Economy News

Mubadala launches a $1 billion Abu Dhabi-based fund

© Reuters.  Mubadala launches a $  1 billion Abu Dhabi-based fund © Reuters. Mubadala launches a $ 1 billion Abu Dhabi-based fund

CAIRO (Reuters) – The United Arab Emirate’s state-owned Mubadala Investment Company has launched a new $ 1 billion fund, Abu Dhabi Catalyst Partners, state news agency WAM said on Thursday.

“The new fund will target opportunities across asset management, speciality finance and financial infrastructure, with investees expected to have a presence in ADGM,” WAM reported, referring to Abu Dhabi Global Market, a financial center located in the emirate.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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