Hedge Fund Manager Loses 99.8% In 9 Months, Tells Investors He Is “Sorry” For “Overzealousness”

and its gone

Hedge Fund Manager Loses 99.8% In 9 Months, Tells Investors He Is “Sorry” For “Overzealousness” (ZeroHedge, Jan 21, 2015):

Day after day, mainstream media proclaimed December the month to be in stocks: seasonals, Santa Claus rally, and performance-chasing funds would ‘guarantee’ upside. For Owen Li, former Raj Rajaratnam’s Galleon Group trader, and the clients of his Canarsie Capital hedge fund, December 2014 will never be forgotten. According to CNBC,from around $100 million in AUM in March 2014, Li told investors in a letter, the fund had lost all but $200,000 and he was “truly sorry,” for “acting overzealously” in the last 3 weeks.

Lawrence Delevingne reports:

A hedge fund manager told clients he is “truly sorry” for losing virtually all their money.

Owen Li, the founder of Canarsie Capital in New York, said Tuesday that he had lost all but $200,000 of the firm’s capital—down from the roughly $100 million it ran as of late March 2014.

“I take responsibility for this terrible outcome,” Li wrote in a letter to investors obtained by CNBC.com

“My only hope is that you understand that I acted in an attempt—however misguided—to generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse,” he added.

Li said in the letter that he made a series of “aggressive transactions” over the last three weeks to make up for poor returns in December. He said he bet on stock price options, predicated on the broader market rising. But stock indexes instead fell, causing the huge losses along with several undisclosed direct investments, according to the note.

Li is a former trader at Raj Rajaratnam’s Galleon Group, which collapsed amid insider trading charges.

Li’s lieutenant at Canarsie is Ken deRegt, who joined in 2013 after having retiring as the global head of fixed income sales and trading at Morgan Stanley.

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To Mr. Li’s less than sophisticated investors we have a short clip summarizing what just happened:

As for Mr. Li, we look forward to his next “hedge” fund reincarnation so that we too can give him some of our money to manage because it really is not easy to find someone who can blow through $100 million in less than a year. And who knows: if someone is willing to fund a guy that dumb and that clueless, next time he actually is due to hit it out of the ballpark.

2 thoughts on “Hedge Fund Manager Loses 99.8% In 9 Months, Tells Investors He Is “Sorry” For “Overzealousness”

  1. Overzealous? That is another word for over greedy…..and I have no sympathy for the investors who greedily sought to profit on the real investments of others by gambling on what happens to them, investing nothing towards any growth, just gambling. It is overdue to set some serious laws into place to stop this kind of insane greed.

    As I have ranted here many times, 90% of all transactions on the stock market are high frequency, a few individuals controlling large funds ($100 million sounds about right) buy and sell huge amounts of securities in less time then one blinks an eye…..the key word is sell. Nothing has been put into the market, all they do is step in, skim, and leave. This used to be illegal, and ought to be again if the US is ever to have a market again.

    This is just the beginning. First, they removed the securities laws that kept people at a reasonable amount of margin buying…..50% for stock, 90% for bonds which used to be solid. Junk bonds destroyed that forever.
    Now, the greedy guts can gamble with 90%, then they can borrow more on the 90%……the market is made up of smoke and mirrors. As I have been saying, at some point, people will start asking for their money. When that happens, all hell will break loose.

    When only 10% of the market is made up of real investors, we don’t know how many of them have borrowed and bought on margin. We do know some key CEOs of major corporations have been borrowing money to buy back their own stock (ie: debt). Apple leads the pack with over $17 Billion and climbing.

    So, he is down to $200K…..breaks my heart. My mother was a young woman when the crash of 1929 hit, and she said it was those down to their last million who jumped out of windows, not people who lost their savings……Her father was a lawmaker, so she knew a lot of the big players, and she spoke from her own observations.

    It is greedy people who have caused this, and the more they panic and grab for their money, the faster the truth will be revealed. I bet Putin is laughing today, I just shake my head, will people never learn? Over the past 10,000 years, we have learned nothing. No matter how far we go, what we invent, greed has destroyed every great empire, and now, the US is falling by the wayside. It is happening very fast, people watching US media still think the economy is fine now………..that creep in the white house said so, so it must be true. How they hug the delusions fed them…………………..I have no sympathy for any of them.

  2. I just checked the CNBC website. The Dow was up 39 points, 3 points yesterday, and some the day before……….don’t recall what. They are touting it as the longest “winning streak” of 2015.

    Talk about lies and spin.

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