I stole this off CraigsList….
Dear Investment Managers,
I should have seen it coming.
Slowly things starts to vanish… like the free Red Bull and Rock Star drinks. Then the disappearance of diet coke and other various snacks and sodas. Next a kind e-mail from your assistant to the entire office with the title “Lunch Policy”. It read that the office would no longer be providing lunch for its employees. When I looked in the office kitchen I noticed that even the Poland Spring order was light – the personal sized water bottles were replaced with the more economic jug.
The office seating was switched around… accounting was moved into a corner far away from the analysts who were diligently working on valuing our hard to value (READ: worthless) securities. You gave the task to the analysts to work on making reports for what you called “color” for the sales guys but what I should have seen was “Oh crap – we need to sell this worthless junk to some other asshole”.
Since there is no real regulation on hedge funds, you had the smart idea of starting a broker/dealer to buy and sell your securities to your own funds – taking a cut each time you buy, sell or move your bonds. Genius really! You pay yourself with each transaction, run all of your costs and expenses (including employees) through the broker dealer! Brilliant!
When the redemptions came in on the first fund, you closed the gate! It was in the best interest of the fund if everyone kept their money in the portfolio… if money were to be taken out, it would soon be found out that not all the money in the monthly NAV calculations was really there because those ABS bonds and aircraft bonds really had a value of zero. That would not have been good for the investment managers or investors. Its better to lock up their money till the market stabilizes and liquidity returns.
You told the investors that the audit delay was due to the auditors belief “mark to market” and that we valued the portfolio at “mark to value”. I guess the investors didn’t know that what you own is only worth was someone else is willing to pay for it.
When the second fund couldn’t meet it’s margin call, you took funds from the already “closed’ first fund and invested into your second fund. A month later, the second fund “closed”.
For some reason, when I went into work on Tuesday, I thought was was just going to be another regular day. Yet even with all the signs presented to me I was surprised when I went to the door and a sign read “Closed. Severance and HR paperwork will be mailed in the next few days”.
I guess I should have seen it coming!
P.S – heard through the grapevine your starting another fund and are looking for some fixed income sales guys. Before you call me – let me just tell you that I’m not interested. And I hope your have the decency to tell your next staff in person that your closing the fund, and not leave a sign on the front door you fucking assholes.