As Bill Ackman, Dan Loeb and Carl Icahn do battle over
Herbalife Ltd., it is impossible to predict which hedge-fund manager has bet
correctly and will “win.”
…..Ackman has been betting that Herbalife is operating a
pyramid scheme and, therefore, is overvalued. Loeb has taken the opposite
position. Icahn, meanwhile, has been rumored to have followed Loeb and gone
long on the nutrition-products company.
What is certain is that as soon as Loeb placed a big long
bet against Ackman’s short bet on Herbalife, investors in the funds, as a
group, became the losers because of the way hedge- fund compensation works. If
you are an investor in both the Ackman and Loeb funds, the total return before
fees on the Herbalife trade will be 0 percent. Whatever Ackman makes, Loeb
loses; and, vice versa. If Ackman makes $1 billion, Loeb loses $1 billion....
More? Check out the coverage at http://www.theglobeandmail.com/globe-investor/inside-the-market/canadian-hedge-funds-worst-performers-of-2012/article8487275/
No comments:
Post a Comment