Atticus Capital Defends Itself After Hedge Fund Liquidation Rumor

September 4, 2008 5:11 PM EDT

According to reports from the Wall Street Journal, hedge fund Atticus Capital denied rumors it is liquidating. In fact, Atticus founder Tim Barakett told them, "We're certainly not liquidating... we have a large net cash position and are looking for opportunities to invest capital."

These rumors about Atticus and other hedge funds followed news earlier in the week that Ospraie, once the world's largest commodities hedge fund, closed its flagship fund after a massive 27% loss in August.

Atticus was once one of the largest holders of Freeport-McMoRan Copper & Gold (NYSE: FCX), which is off 45% from its 52-week high related to the recent commodities sell-off. As of June 30th, Atticus still owns 4.9 million shares of Freeport-McMoRan, but they trimmed their position 6.6 million shares from the prior quarter.

Atticus also own a large stake in Peabody Energy (NYSE: BTU), a big coal company with coal being one of the worst performing sectors recently.

Although unrelated to commodities, another one of Atticus' large holdings, Mastercard (NYSE: MA), is down 32% from its high.

Atticus, which has posted losses between 25% and 32% in its two main hedge fund this year, said its investors are sticking with it, according to the Wall Street Journal. Barakett said they had less than 10% of their capital put in for redemptions for September 30.

An interesting quote in the article from an unnamed head of prime brokerage at a major investment bank sums up the recent action. He (or she) said, "Hedge funds that picked on Lehman Brothers and Bear Stearns now are picking on each other."

Link to WSJ Article

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