The most famous hedge funds are george soros's Quantum Fund and Julius Robertson's Tiger Fund, both of which have created compound annual returns of 40% to 50%. High-risk investment may bring high returns to hedge funds, and it may also bring unpredictable losses to hedge funds. The biggest hedge fund can't be invincible in the unpredictable financial market forever.
quantum fund
Shuang Ying Fund, the predecessor of george soros 1969 Quantum Fund, was founded by george soros with a registered capital of US$ 4 million. 1973, the fund was renamed Soros fund, and its capital jumped to120,000 USD. There are five hedge funds with different styles under Soros Fund, and Quantum Fund is the largest one and one of the largest hedge funds in the world. 1979 Soros renamed his company again and officially named it Quantum Company. The so-called quantum comes from Heisenberg's uncertainty principle of quantum mechanics, which is consistent with Soros's view of financial market. The law of uncertainty holds that it is impossible to accurately describe the motion of atomic particles in quantum mechanics. Soros believes that the market is always in an uncertain and constantly fluctuating state, but it is possible to make money by gambling with obvious discounts and unpredictable factors. The smooth operation of the company and the price exceeding par value are based on the supply and demand of stocks.
The headquarters of Quantum Fund is located in new york, but its investors are all non-American foreign investors, in order to avoid the supervision of the US Securities and Exchange Commission. Quantum funds invest in commodities, foreign exchange, stocks and bonds, and make extensive use of financial derivatives and leveraged financing to engage in all-round international financial operations. With Soros's excellent analytical ability and courage, quantum funds have gradually grown in the world financial market. Because Soros has accurately predicted the extraordinary growth potential of a certain industry and company many times, he has gained excess returns in the rising process of these stocks. Even in the bear market where the market fell, Soros made a lot of money with his superb short-selling skills. By the end of 1997, the quantum fund had increased its total asset value to nearly $6 billion. The $65,438+0 injected into the Quantum Fund in 65,438+0969 has increased to $30,000 by the end of 65,438+0996, which is an increase of 30,000 times.
Tiger fund
From 65438 to 0980, Julian Robertson, a famous brokerage firm, set up his own company-Tiger Fund Management Company with a financing of 8 million US dollars. 1993 Tiger Fund, a hedge fund under Tiger Fund Management Company, successfully attacked the pound and lira and gained huge profits in this operation. Since then, Tiger Fund has gained great fame and been sought after by many investors. Since then, the capital of Tiger Fund has expanded rapidly, eventually becoming the most prominent hedge fund in the United States.
Since the mid-1990s, the performance of Tiger Fund Management Company has been rising, and great achievements have been made in stock and foreign exchange investment. The company's highest profit (excluding management fees) reached 32%. 1in the summer of 998, its total assets reached the peak of $23 billion, and it once became the largest hedge fund in the United States.
1998 In the second half of the year, Tiger Fund made a series of investment mistakes and went downhill from then on. During the period of 1998, after the Russian financial crisis, the exchange rate of the Japanese yen against the US dollar once fell to 147: 1. It is expected that the exchange rate will fall below 150 yen. 6? 1 Robertson ordered his Tiger Fund and Jaguar Fund to short the yen in large quantities, but the yen soared to 1 15 yen within two months without any improvement in Japan's economy, and Robertson suffered heavy losses. Among the biggest losses in a single day (1998 10.07), Tiger Fund lost $2 billion, and in September of 1998 and June of 10, Tiger Fund lost nearly $5 billion in yen speculation.
During the period of 1999, Robertson invested heavily in the shares of American Airlines Group and Waste Management Company, but the share prices of these two commercial giants continued to fall, and the Tiger Fund was hit hard again.
From 1998 to 12, nearly $2 billion of short-term funds were withdrawn from Jaguar Fund, and from 1999 to 10, a total of $5 billion was withdrawn from Tiger Fund Management Company. The withdrawal of investors has prevented fund managers from focusing on long-term investments, thus affecting the confidence of long-term investors. Therefore, on October 6th, 1999/kloc-0, Robertson requested that the redemption period of his three funds, Tiger, Cougar and Jaguar, be changed from March 3rd, 2000 to semi-annual, but on March 3rd, 2000, Robertson was in Tiger Fund. After the collapse of Tiger Fund, it liquidated $6.5 billion in assets, of which 80% was returned to investor Julian? 6? 1 Robertson's personal stay1500 million USD for continued investment.
Hedge fund investment case
In many known hedge fund investment cases, when the prices of financial markets are disturbed by hedge funds, these prices will continue to fall in the direction expected by hedge funds. At the same time, the more serious the damage to the attacked country, the better for the attacked hedge fund. The result is a redistribution of wealth between hedge funds and nation-states. From the perspective of fair distribution, this behavior of hedge funds is considered to be close to monopoly, so its income is close to monopoly profit. Economists believe that the market is an effective resource allocation mechanism. However, once hedge funds manipulate prices, the chances of winning or losing are not equal, which will lead to the destruction of the market itself, including the monetary system, not to mention improving the efficiency of the market. Judging from the values of economics, since there is no efficiency, there is no moral foundation. Because of the redistribution of wealth caused by this behavior, the winner's income is not only at the expense of the loser's equal loss, but also at the expense of the loser's greater loss, even the collapse and failure of its monetary system and economic mechanism; From a global perspective, it is a net welfare loss.
1, 1992 sniper pound:
Since 1979, the European economy, which has not yet unified the currency, has unified the currency exchange rates of various countries and formed the European currency exchange rate linked insurance system. The system stipulates that national currencies are allowed to float within 25% of the European "central exchange rate". If the exchange rate of a member country exceeds this range, the central banks of other countries will take action to intervene. However, the economic development of European member States is unbalanced, and fiscal policies cannot be unified at all. The currencies of different countries are affected by their respective interest rates and inflation rates. Therefore, sometimes, the linked insurance system forces the central bank to take actions against its will. For example, when foreign exchange transactions fluctuate violently, these central banks have to buy weak currencies and sell strong currencies to maintain the stability of the foreign exchange market.
1989, after the reunification of East and West Germany, Germany's economy grew strongly, while the German mark was firm. 1992, Britain was in a period of economic depression and the pound was relatively weak. In order to support the pound, the interest rate of British banks has been high, but this will inevitably hurt Britain's interests, so Britain hopes that Germany will lower the interest rate of the mark to ease the pressure on the pound. However, due to the overheating of the German economy, Germany hopes to use the high interest rate policy to cool the economy. Due to Germany's refusal to cooperate, Britain continued to fall in the money market. Although Britain and Germany joined hands to sell marks for pounds, it still didn't help. 1In September, 1992, the governor of the German central bank published an article in the Wall Street Journal, in which he mentioned that the instability of the European monetary system can only be solved by currency devaluation. Soros had a premonition that the Germans were going to retreat, and Mark no longer supported the pound, so his quantum fund borrowed a large sum of pound, and 5% of the deposit bought Mark. His strategy is: before the exchange rate of the pound falls, buy the mark with the pound, and when the exchange rate of the pound plummets, sell part of the mark to pay back the original borrowed pound, and the rest is the net profit. In this operation, Soros's quantum fund shorted the pound equivalent to $7 billion and bought the mark equivalent to $6 billion. In more than a month, it made a net profit of $65.438+$50 billion, while European central banks lost $6 billion. The event ended with the pound exchange rate falling by 20% within 654.38+0 months.
2. Asian financial turmoil
1In July 1997, Quantum Fund sold a lot of Thai baht, forcing Thailand to abandon its long-term fixed exchange rate pegged to the US dollar and float freely, thus triggering an unprecedented crisis in Thailand's financial market. After that, the crisis quickly spread to all countries and regions with freely convertible currencies in Southeast Asia, and Hong Kong dollar became the most expensive currency in Asia. Later, Quantum Fund and Tiger Fund tried to attack the Hong Kong dollar, but the Hong Kong Monetary Authority had a large amount of foreign exchange reserves, and the authorities raised interest rates sharply, which made the hedge fund plan unsuccessful. However, high interest rates caused Hong Kong's Hang Seng Index to plummet by 40%. They realized that short selling the Hong Kong dollar and stock futures at the same time, the former led to soaring interest rates and dragged down the entire Hong Kong stock market, and they were "sure" to make a profit. However, the Hong Kong government intervened in the market in August of 1998, which made hedge funds fail in both the foreign exchange market and the Hong Kong stock futures market.