Clarium LP as of May 31st
May
+11.2%
YTD
+36.2%
1-year
+66.1%
3-year
99.8%
5-year
335.9%
Asset Under Management
$5.127 billion
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Back of the envelope calculations, assuming little in the way of redemptions, would suggest that Clarium has garnered about $1 billion of new assets this year, and Thiel’s marketing staff probably has probably the easiest job on Wall Street. Sure, they have to find the right clients, and prudently manage the inflows, but Global Macro funds have the capacity to quickly deploy big money, and ultimately have the capacity to run billions of dollars rather effortlessly.
Will Clarium LP run $10 billion by the end of the year? A decade ago I was part of a small team that, though a combination of killer performance and crackerjack marketing, saw assets balloon from $400 million to nearly $3 billion in 18 months, heady stuff indeed. But the inflows present challenges, and Clarium needs to carefully manage their growing popularity.
Given Thiel’s situation, managing client’s expectations might be his biggest challenge. A slow steady ramp in assets is assured, and given what has transpired since the end of May, it is likely Clarium is closer to $6 billion than $5 billion as we inch toward the end of the second quarter.
Yes, 1440’s 2007 Man of the Year is on a roll, and he will probably do a better job of keeping his emotions in check than I did a decade ago.
Although Clarium does not charge a 2% management fee, their incentive fee, assuming it is 20% (and a few other broad assumptions regarding inflows, weighted average assets, etc) might have accrued in the neighborhood of $325-$375 million as we reach the end of June. A strong finish to the year could certainly see the number rise, and if Clarium can finish the second half of 2008 up another 10% Clarium should have roughly $500 million to show for their efforts, and will be set up for a blowout year in 2009, assuming they can keep it up.
Knock ‘em dead Peter, show the Three Amigos, and Wall Street’s old guard, how it is done.
Bravo!
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This video is roughly nine months old, and clearly shows Peter was, thematically, ahead of the curve.
Mandatory viewing
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Peter on Peter, explaining what he does day in and out:
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How do you feel about taxes? Peter has some thoughts on marginal rates, U.S. competitiveness, etc.
Hey Obama, please watch this:
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Clarium Capital LP Dominates Global Macro Strategies
1440 Wall Street
Clarium Capital LP Posts Good Year, in January
1440 Wall Street
The Kingdom of Hedgistan
New York Magazine
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Which one of the Three Amigos is the Sith Lord? I surmise it’s not Tilson since Usana’s the only Utah issuer he was bearish on and he is bullish (and underwater) on his Fairfax position.
Is it Einhorn or Ackman?
the guy is as hot as anybody I have witnessed in my investing career. an amazing long winning streak of big ballsy global trend following. no way I thought his streak could go this long.
I passed on the fund about three years ago.
I don’t know which Amigo is the Sith Lord, but Thiel is a Jedi Knight, given he has clearly mastered the use of the FORCE.
We need to have a vulcan mind meld with Thiel on Wallstrip.
Now that would be cool!
Thiel’s as hot as those Chicago Cubs.
Can you say SWEEEP the Sox (not to be confused with the other SOX as in semi-conductors)?
good story, but a look at his 13f and i don’t know what all the fuss is about. his holding as of may look rather pedestrian.
Jim,
Keep in mind the 13-F shows longs, but does not include shorts, and they no doubt are short “leveraged institutions” and no commodity futures etc show up. No doubt he is long oil in some way, but parsing filings for hedge funds different than long only guys.
Basically, the sexy stuff, ala futures (CFTC) etc, does not show up.
good point about not showing short positions (or option positions for that matter) but if your saying he is doing well in the managed futures portion of the fund that is a different story. ALL managed futures managers are killing it, trend followers or discrestionary. and i can’t find these guys listed as a CTA. are you sure they are trading futures?
Jim,
I have no idea of what they own or don’t, outside of stale filings, but they could own a number of derivatives and instruments that would not necessarily show up, perhaps they are even long energy long via some synthetic position.
Checking on mutual fund managers is one thing, hedge fund managers another.
Clearly Clarium got the trade right, as evidenced by the performance.
And the OTC market dwarfs the futures markets, this is from a note a read a few weeks back:
The big market is the OTC market. The futures markets are small in relation to the OTC market. Improving surveillance of futures markets is next to meaningless because anyone that is up to no good will shun the futures markets and operate on the much larger OTC market.
Don’t knock yourself outlooking for their position, and while they could tell you, Thiel would have to kill you.
Plus, his financial shorts might be outperforming his long oil position!
SJ
Hey there SJ, I guess I’m old school, or maybe just old. It never crossed my mind that one fund would simultaneously do your commodities trading and equities trading. No thanks. One of the benefits of having a managed commodity account is diversification form the equities market. By putting both in one account it seems counter productive. When choosing a commodities trading advisor I was looking for someone with the unique skill set to make the most of commodities markets. What qualifies this guy? He sold a startup? Ummm, no thanks again. Now if his fund concentrated on micro-cap startups like his little mini prospectus says, then I’m on board. I realize he has had a great run, and good for him and his investors, but I see no reason he is not the next Bill Miller, if you catch my drift.
Peter’s fund is certainly volatile, he had down months this year in excess of 5% if I am not mistaken, but was up 24% in January alone.
We all must have an open mind though, and Peter’s though provoking comments will challenge you, even if you don’t agree with them.
He but has assembled a team that could care less for the consensus on Wall Street, and probably ignore the vast majority of it. Yes, he will eventually get out of synch with the market, but is the most exciting thing happening, IMO.
SJ
PS- Sign me up for the sea steading project, as long as I can bring my dog.
Peter is German. He is on a hotter streak than the German National Soccer Team in Euro 2008. Read once he is a big table tennis afficionado. Clarium screens their prospective employees in an interesting way. If they played basketball or baseball they were regarded to be idiots and not considered for employment. Frat boys excuded as well.
You are correct about not charging a management fee but Clarium’s performance fee was 25% when we were invested a couple of years ago. I’d be surprised if they’ve reduced it since. So adding another 5% to your estimates gives $390-450m.
Not bad!
Marcus
Marcus,
thx...tried to leave it open. I did not realize they waived the mgmt fee until recently.
Of course, it RenTech can charge 5 and 44, 0 and 30 might not be out of the question.
How big will he get before he closes? That is what I am curious about. Global Macro funds can still be a bit nimble at $10 billion i suppose, depending on how they approach things.
In any case, it is nice to see someone doing well.
SJ
Thiel ended up 16% in June, but did not have a long crude oil position on.
He made most of his money short US financials.
Clariumis up to $6.4 billion in assets, and no doubt having an excellent July with his shorts continuing down. They could be close to $7 billion by now.
sj
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