Hedge Fund News: Ray Dalio, Howard Marks, Toscafund Asset Management

Hedge Fund Calls New York Times Article a ‘Distortion’ (The New York Times)
Bridgewater Associates, the world’s largest hedge fund, released a statement on Thursday taking issue with what it called “significant mischaracterizations” and a “distortion” of some of its business practices and culture that were described in an article in The New York Times. Ray Dalio, the founder and chairman of Bridgewater, said in a statement that the article “intentionally strung together a series of misleading ‘facts’” in order to “create the most sensationalistic story.” The Times article reported on the culture at Bridgewater as detailed in a sexual harassment complaint and a National Labor Relations Board filing, as well as in interviews with seven former employees or people who have done work for the firm. The article described how the firm’s policy of recording meetings and surveillance had a chilling effect on employees bringing grievances or complaints, according to those people.

Howard Marks Says Hedge Fund ‘Geniuses’ Spawned Too Many Firms (Bloomberg)
Investor appetite for hedge funds has waned after too many managers started such vehicles in the past decade, Oaktree Capital Group LLC’s Howard Marks said. “People have grown appropriately skeptical,” the billionaire investor, whose firm doesn’t manage hedge funds, said Thursday when asked about the $2.9 trillion industry on an earnings conference call. “The performance of the greatest hedge funds, run by geniuses, created a huge umbrella over this industry, which permitted the other 9,990 hedge fund managers to start hedge funds and command hedge fund fees.”

Hedge Fund Reveals Losses After Brexit Vote (The Wall Street Journal)
A London-based hedge fund whose chief economist argued vocally for Brexit sustained heavy losses in its main fund following last month’s vote by the U.K. to leave the European Union. Toscafund Asset Management LLP, founded by trader Martin Hughes and with more than $4 billion in assets, told clients in a note this month that its flagship Tosca fund lost 14.7% in June. U.K.’s surprise decision to leave the EU. The fund was caught off guard by the sharp selloff that followed the U.K.’s surprise decision to leave the EU, the firm said. “We expected a close-run Brexit referendum but believed that ‘Remain’ would ultimately prevail. Clearly, we were wrong,” the firm said in the note reviewed by The Wall Street Journal. “We were not well set up for such an outcome.”