The Baupost Group, LLC, is a Boston hedge fund founded and run by Seth Klarman in 1982.[1] Baupost Group's investment philosophy emphasizes risk management.[2][3] The firm is a value investing manager and is reported to manage assets of $ 22 billion.[4]
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Risk - It was reported that the Baupost Group does not use leverage in its investments with the exception of real estate where for every one dollar invested the Baupost Group used one dollar of leverage.[5]
It was reported that Baupost CEO, Seth Klarman, explained in a speech to MIT students that investment research driven by emotion is risky and can lead to a bad investment.[6]
Performance - From its founding the firm's three private partnerships have generated an average annual return of 19%.[5][4]
With the rise of distressed debt sales in Europe caused by the sovereign deficit crisis Baupost Group in 2011 opened its first international office in London to take advantage of investment opportunities in European commercial property market, corporate debt trading at distressed valuations and structured products.[7]
After the financial crisis in 2008 Baupost Group sought to purchase insurance as a hedge against the value of money declining as a result of government intervention which was a risk researchers at the company were concerned about. To execute this the Baupost Group purchased options for five year Treasury bonds that would become profitable if Treasury bonds dropped sharply.[4]
Baupost Group's assets were: $30 million in 1982, and $ 22 billion in 2010.[4]
It was reported that in 2004, 42 employees worked at Baupost Group: 12 investment focused and 30 admin.[1]
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