If you look at the venture capital business, it's about getting grand slam investments. After all, Sequoia's investment in Google (NASDAQ: GOOG) made up for every dog and then some.The VC approach sometimes applies to hedge funds. And this is certainly the case with Atticus Capital's brash leader, Tim Barakett. In fact, he recently got a write up in the Wall Street Journal [a paid service].
First of all, he likes to play IPOs. Hey, isn't that where there is big-time volatility?
But Barakett combines that approach with a strong focus on fundamentals, preferring industry leaders with strong balance sheets.
Maybe that's why Atticus has 20% of its money in rail stocks, an area that has attracted another great investor, Berkshire Hathaway's (NYSE: BRK.A) Warren Buffett.
The returns for Atticus? They are stunning. Last year, its main fund was up 40% (even after deducting for his juicy fees).
Yet, if history is any indication, even the great hedge funds managers – like George Soros – run into problems. But so far, Barakett still has the Midas Touch.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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