Despite a Tough Year, Hedge Fund Managers Still Pour Money on Real Estate

Posted by Staff Reporter (media@realtytoday.com) on Nov 09, 2015 09:43 PM EST
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Allen And Company Annual Meeting Draws Top Business Leaders To Sun Valley, Idahomore big
SUN VALLEY, ID - JULY 12: Sam Peters, a fund manager at Legg Mason Inc., attends the annual Allen and Company Sun Valley Conference at the Sun Valley Resort on July 12, 2014 in Sun Valley, Idaho. Many of the worlds wealthiest and most powerful executives from media, finance, and technology attend the week-long conference which is in its 32nd year. (Photo : Scott Olson/Getty Images)

Hedge fund investments are having a difficult year but top hedge fund managers are still investing their money on real estate.

Hedge funds are not performing very well so far this year but it has not stopped wealthy hedge fund managers from buying expensive real estate like the penthouse in Manhattan that has a spectacular sweeping vista of the Hudson and the East River.

According to The New York Times, the property was bought for a cool $37.9 million by Larry Robbins, founder of Glenview Capital Management and one of the most well-known hedge fund managers in Wall Street. This move is hardly surprising and is quite common among the ranks of wealthy hedge fund managers. The founder of Citadel Kenneth Griffin paid $200 million on a luxury condominium in Central Park in September.

However, what makes this deal stand out is the timing; Mr. Robbins just sent a letter to all investors on his $8.8 billion hedge fund, apologizing for the 15 percent loss it incurred this year. He reportedly admitted that he was not able to protect their capital and he said he will not collect his pay for the year.

Meanwhile, in a report by Dallas News, one of the biggest drops in stock prices has recently been announced by Valeant Pharmaceuticals International. From $262 it has plummeted down to $81 which is a 69 percent drop. One of the biggest hedge funds in the world had the misfortune of investing money on Valeant stock; Pershing Square Capital Management bought 19.5 million shares which is equivalent to a 5.7 percent ownership of the company.

At the time of the stock purchase, Valeant was at $200 per share which amounts to a total of $3.9 billion. With the price drop, Pershing just lost $2.4 billion with the current price closing the stock's value at only $1.5 billion.

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