Hedge Funds: Seth Klarman Emerges to Open Baupost Group
Value investor Seth Klarman has emerged from his bearish slumber. The head of Baupost Group announced he had spent $1.5 billion on new investments in recent weeks. Bloomberg reports that Klarman sees significant value due to fears about coronavirus and valuations.
The hedge fund manager also announced he is seeking more investor capital for his $29 billion fund.
Seth Klarman on Opportunities Ahead
While Baupost didn’t comment on the report, Baupost did suffer losses in the recent selloff. The report states that the fund lost as much as 10% to date. That said, Klarman has complained vocally for years that it was hard to find value in a stretched market. The firm’s cash position has dropped to 27% this year thanks to the deployment of capital. It was 31% at earlier in 2020.
Reports indicate that the firm has about 33% of its capital in stocks. Another 17% is currently in stressed credit investments.
The market has been in a freefall since February 21 when fears about the spread of coronavirus started to rattle investor sentiment. The outbreak started in China in December and failed to garner widespread attention until late January. Markets have been in a free fall with significant levels of forced selling by funds and negative momentum in the market.
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