AQR Capital Adapting to Troubled Times
|May 27th, 2009||
|The Wall Street Journal ran an article yesterday entitled “A Hedge-Fund King Is Forced to Regroup” that discussed how AQR Capital is now struggling with tough times after a period of expansion and growth. AQR had amassed over $40 billion in assets in mid-2007, but ran into trouble when mortgage-backed securities began to flounder and Lehman Brothers dissolved. According to inside sources, the group was losing $500 million per day for a week at one point. The firm also suffered badly throughout 2008 as the financial crisis deepened. |
For a firm that had made its money with a complex series of small bets throughout its growth years, the dire macroeconomic situation forced that the firm and its founder Clifford Asness to search for new strategies. According to the article, AQR’s has been adjusting its business model by lowering management fees, launching mutual funds and investing in more “momentum” stocks. Mr. Asness recently invested $5 million of personal money into one of AQR’s funds, which is up 17% for the year through mid-May.
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