Credit Crunch Puts U.K. Hedge Fund Master at a Loss

Chrisopher Hohn, who runs the $15billion hedge fund The Children’s Investment Fund Management in the U.K.—and who is practically revered for the average annual returns of 42% he has delivered since the fund’s inception in 2004—has reached an impasse, The Wall Street Journal reports.

“I am not sure what to do now. We have a real credit crisis,” Hohn wrote in an e-mail submitted in a court case involving one of the firm’s investments, railroad transportation company CSX Corp. “We have not appreciated the banking crisis meant banks were just bad to invest in. We kept too much exposure.”

In other missives, Hohn bemoans the fact that the fund was down 15% as of March, ticks off bad investments and questions the fund’s strategy.

“I feel bad that we have not hedged properly. We should have hired a strategist to help us. Maybe we still should,” Hohn wrote in one missive.

The crisis of faith runs parallel to the thinking of the two hedge fund managers from Bear Stearns, in which they expressed dire concerns over the mortgage market.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.