11.11.2008

Largest Hedge Fund Failures in History

Here is a list of some of the largest hedge fund failures in history:

Amaranth Advisors
- was an American hedge fund managing about US$9 billion in assets. In 2006, it collapsed after losing nearly $6 billion in a single week on natural gas futures. Amaranth's failure was the largest hedge fund collapse in history.

Long-Term Capital Management - Long-Term Capital Management was a hedge fund founded by John Meriwether in 1994 which collapsed in early 2000 after the Russian financial crisis. Meriwether's fund hired some of the brightest minds, including nobel laureates.

Wood River Capital Management- Founded by John Whittier, Wood River closed in 2005 after Whittier was accused of defrauding investors and was said to have had relatively little investment experience. They were later sued by Lehman and others for failing to pay for services.

Bayou Group- Founded by Samuel Israel in 1996, The Bayou Group was a hedge fund with nearly half a billion in assets, but investors accused Israel of fraud. Investors were promised the fund would grow nearly 20 fold in 10 years.

MotherRock - Founded in 2004, MotherRock had $450 million in assets in 2006 when it began having poor returns climaxing in a brutal June where it lost 26% and promptly shut down.

And surely after the poor returns hedge fund indeces showed in Sept and Oct of 2008, there are more hedge fund failures to come.

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