Wednesday, July 8, 2009

Meriwether To Shut Hedge Fund After Losses

The Wall Street Journal reports that John Meriwether is shutting down the flagship hedge fund he founded in 1999 at his firm, JWM Partners, according to Bloomberg, after it lost 44% between September 2007 and February this year.

This failure, whose effects were magnified by high levels of borrowings the fund made to invest in markets, led the U.S. Federal Reserve to organise a bailout by the portfolio's creditors, and to begin examining the role of hedge funds in financial markets - an examination which continues to this day, and which arguably has intensified since LTCM failed.

What other causes may have contributed to Meriwether's failure?

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