Mr. Druckenmiller has over 30 years’ experience, his Duquesne Capital manages $12 billion and since 1986 never had a down year (although it is down 5% YTD). He worked with George Soros (while still managing Duquesne!) and was there for the famous British pound trade. So why quit? Interestingly, he’s “frustrated by his failure in the past three years to match returns that had averaged 30 percent annually since 1986.” Why, in his opinion, did it happen? “Managing more than $10 billion seems to challenge my long-term standard for investment performance.” A fund manager’s mandate is all about investment performance and not AUM growth – the opposite is not just wrong, it can also be self-defeating.
As we blog and try to become more transparent for investors, potential investors and even invested companies, we’re aware of the dangers of over-exposure and “posing”, as these two NY Times pieces highlight. We feel we’re safe because 1) Transparency has always been our culture: we pioneered fund reports in Brazil, then annual investor meetings, and now this blog – and more to come; 2) We’re aware of the risks and have built our processes and incentive systems accordingly; and 3) We tend to assume we’re wrong – meaning we’re conservative. Since we recognize we’re learning as much as everybody else is, we will prefer to err on the side of omission.
Buffett was particularly expansive regarding his processes and methods, and this alone makes this video worth the time (some 90 minutes). The fact that it was October 1998, a pivotal time in the dot-com boom and just after the LTCM imbroglio makes it even more interesting.
Alice “Snowball” Schroeder last month wrote a piece on Bloomberg called “Wall Street makes it hard to earn a legal living”. While IP has always discussed the obvious conflicts of interest for all the market’s agents, and the sell side in particular, Alicemisses a turn in the road somewhere – falls down the rabbit hole? – and turns this article into quite the generalization. The issue of conflicts of interests deserved a better effort.
Looking at the world’s largest remittance players, it’s perhaps useful to use Moneygram – smaller, under-covered and nearly-bankrupt – to better understand Western Union.
