Klarman "Catching Knives" Experiences Rare Yearly Loss, Looks Forward

The year that was 2015 was odd for several reasons, Baupost’s legendary value hedge fund manager Seth Klarman noted in a recent letter to investors reviewed by ValueWalk. For one, the hedge fund didn’t generate a profit, a historical oddity regardless of the market environment. But 2015 was clouded by an unusual haze, as if a dependent drug fed intravenously was about to be withdrawn from the system.

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The hedge fund with among the highest win percentages takes a strike

The Baupost Group, the Boston-based $27 billion hedge fund that finds value not only in public stocks but also private deals that sometimes require financial heft, was down -6.7% in the publicly traded portfolio 2015, while up 2.4% in the hedge fund’s private investment portfolio. This was only the third losing year in the hedge fund’s 33-year history, placing them near the statistical pinnacle of all hedge funds with a 90% yearly win percentage.