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In 1991, John Meriwether lost his job at Salomon Brothers in the wake of a government bond scandal; he then proceeded to open up his own hedge fund: Long-Term Capital Management. After the collapse of that fund nearly torpedoed the entire global economy -- and was chronicled in the highly readable When Genius Failed -- Meriwether has gone through a string of less notable ventures.
His latest is now coming to an end. Bloomberg reports that "JWM Partners LLC is closing its main Relative Value Opportunity II fund after losing 44% from September 2007 to February 2009."
It's hard to have much sympathy for the investors who lost their money putting their faith in the mastermind of one of the biggest disasters in the history of global finance, although he was more conservative this time around: The Relative Value Opportunity II fund was leveraged just 15 to 1 instead of the more than 25 to 1 that led to the demise of Long-Term Capital. This time though, Meriwether's fund was a victim of market problems instead of a cause of them.
The Relative Value Opportunity II fund returned an average of 1.46% per year since its inception in 1999 -- underperforming the Credit Suisse/Tremont Hedge Fixed-Income Arbitrage Index's gain of 2.4% during that period by a significant margin.
If three failures is enough to ruin a career, then Meriwether should be just about done by now.
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