After a brutal start to 2020, hedge fund manager and ex-White House communications director Anthony Scaramucci is turning to the big boys for help.
In a letter to investors obtained by The Post — to be released Monday night — Scaramucci has told investors of his $9 billion fund-of-funds, Skybridge Capital, that he’s allocating $290 million to three of the biggest names in the industry — Howard Marks of Oaktree Capital, Daniel Loeb of Third Point and Ray Dalio of Bridgewater — following losses of 22.5 percent.
Scaramucci, known popularly as “The Mooch,” normally stays away from multi-billion funds in favor of smaller names. But in light of recent losses that have resulted in redemption requests totaling 9.3 percent of the fund, he is changing his usual game plan, he said.
“As Mike Tyson famously said, ‘everyone has a plan until they get punched in the face,’” the letter said. “To this end, modern portfolio theory represents the best defense against unknown unknowns.”
That new reallocation required SkyBridge to sell out of investments in two funds that led to a disastrous March: EJF and Hildene, the letter said. Scaramucci has instead invested $100 million in Dalio’s Bridgewater Associates, $100 million Mark’s Oaktree Capital, and $90 million in Loeb’s Third Point.
“These large, well-known managers have built their track records by capitalizing on substantial market dislocations,” Scaramucci writes to his investors, “and we are excited to add them to [our] portfolio.”
Oaktree’s reported a loss of 7 percent at the end of March, according to SEC filings, and Loeb’s Third Point fell 16 percent in the same period. Dalio‘s flagship fund, meanwhile, reported a 20 percent hit in the early weeks of the market downturn — the opposite of calls leading up to the 2008 financial crisis that helped springboard his fund manage $160 billion, making it the biggest in the world.
“It might keep redemptions down to tell people that Ray Dalio is handling their money, but even Ray Dalio isn’t Ray Dalio anymore,” one hedge fund investor noted.
But Scaramucci, in a footnote, suggests the move is already helping.
“A number of investors have inquired as to whether they can rescind redemptions submitted in April,” he wrote. “The answer is ‘yes.’ For your convenience, attached to this letter is rescission paperwork.”
Source: Read Full Article