John Meriwether

John William Meriwether (born August 10, 1947) is an American hedge fund executive, seen as a pioneer of fixed income arbitrage.

Education

Meriwether earned an undergraduate degree from Northwestern University and an MBA degree from the University of Chicago Booth School of Business.^[1]

Salomon Brothers

After graduation, Meriwether moved to New York City, where he worked as a bond trader at Salomon Brothers. At Salomon, Meriwether rose to become the head of the domestic fixed income arbitrage group in the early 1980s and vice-chairman of the company in 1988. In 1991, Salomon was caught in a Treasury securities trading scandal perpetrated by a Meriwether subordinate, Paul Mozer. According to Roger Lowenstein's biography of Warren Buffett (at page 378), Mozer reportedly told Meriwether he had submitted a "single false bid" and described his effort to cover it up. Meriwether was "stunned" and inquired, "Is there anything else?" Mozer "lied" and "begged for another chance" according to Lowenstein. Meriwether then "huddled" with Salomon CEO John Gutfreund and Salomon's general counsel. They all agreed the firm should report it to the Treasury Department but nothing happened for four months as the partners, including Gutfreund, "belabored" issues of who should call whom, what to say, and when. Mozer was left at his desk and submitted another false bid, this time resulting in an SEC investigation, Gutfreund's resignation, Buffett's intervention, and (although Lowenstein does not discuss it in this book) Meriwether's $50,000 civil penalty. Meriwether decided to leave Salomon. Three years later he started LTCM, leading to Wall Street's next crisis and Roger Lowenstein's next book.

LTCM

Meriwether founded the Long-Term Capital Management hedge fund in Greenwich, Connecticut in 1994. Long-Term Capital Management collapsed in 1998. The books When Genius Failed: The Rise and Fall of Long-Term Capital Management and Inventing Money: The story of Long-Term Capital Management and the legends behind it detail the events leading up to and following Long-Term Capital Management's demise.

JWM Partners

A year after LTCM's collapse, in 1999, Meriwether founded JWM Partners LLC. The Greenwich, Connecticut hedge fund opened with $250 million under management in 1999 and by 2007 had approximately $3 billion.^[2] The Financial crisis of 2007-2009 badly battered Meriwether's firm. From September 2007 to February 2009, his main fund lost 44 percent. On July 8, 2009, Meriwether closed the fund. In a Bloomberg story on the closing of JWM Partners Tammer Kamel, an investment adviser, said that, "For many investors, John Meriwether is by now just another hedge-fund manager," and that "LTCM’s infamy was a big story in 1998, but the events of 2008 might finally relegate LTCM and 1998 to footnote status.”^[3]

JM Advisors

Meriwether opened his third hedge fund venture, named JM Advisors Management, also based in Greenwich, Connecticut, in 2010.^[4] The fund is expected to use similar strategies as both LTCM and JWM, namely highly leveraged "relative value arbitrage". By March 2011, however, the JM Advisors Macro Fund had raised only $28.85 million.^[5]

Thoroughbred Racing

John Meriwether has been an owner of Thoroughbred horses for a number of years and is a member of the Board of Directors of the New York Racing Association (NYRA). He is best known for once saying "bet on a horse that craps just before the race". He notably campaigned Buckhan, winner of the 1993 Washington, D.C. International Stakes.^[6]

See also

• List of trading losses

References

1. ↑ Morgenson, Gretchen (2 October 1998). "John Meriwether: Hedge Fund Wizard or Wall St. Gambler Run Amok?". The New York Times. Retrieved 17 March 2016. 
2. ↑ "JWM Partners-Company description-Hoovers". Retrieved 2008-04-11. 
3. ↑
4. ↑ Sam Jones: Meriwether setting up new hedge fund, Financial Times, 22 October 2009
5. ↑ SEC Filing for JM Advisors
6. ↑ John Meriwether, Richard Leahy - NTRA Archived 2007-10-20 at the Wayback Machine.

Sources

• Lowenstein, Roger (2000). When Genius Failed: The Rise and Fall of Long-Term Capital Management. New York: Random House. ISBN 0-375-50317-X. 
• Dunbar, Nicholas (2000). Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It. New York: John Wiley & Sons. ISBN 0-471-89999-2. 
• Lewis, Michael (1989). Liar's Poker: Rising through the Wreckage on Wall Street. New York: W.W. Norton. ISBN 0-393-02750-3. 

External links

• Case Study: Long-Term Capital Management
• Meriwether and Strange Weather: Intelligence, Risk Management and Critical Thinking