One of the largest hedge funds in the world, Seth Klarman's Baupost Group has nearly USD28 billion in its portfolio, had laid out plans to return money to its clients by the end of 2013. This was confirmed by two individuals familiar with the plans of the Boston based hedge fund firm.
This would mark the second instance that Baupost, under the helm of Klarman for the last 31 years, would return funds to its customers. According to the sources, the decision to return the funds stems from the increased difficulty of putting all that liquid resources to work and return a decent profit. The announcement though did not provide an amount to be returned.
This is not an isolated instance, as more and more hedge fund managers such as Klarman are having difficulty choosing winners in a record high market with much of the activity coming from the US Federal Reserve Bank's easy money plan. Another firm in the same quandary, Daniel Loeb's Third Point LLC had long turned new investments to its firm. It had gone a step further, not even attempting to replace capital that leaves its fold.
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