Sitting here skimming Leucadia’s (LUK)10-K today and can across this.
On Jan. 2, 2007 Leucadia formed HFH SHORTPLUS MASTER FUND, LTD.
It purpose?
“HFH ShortPLUS Master Fund, Ltd. (the “Fund”) is a Cayman Islands exempted company incorporated in accordance with the Companies Law (2004 revision) which commenced operations on January 2, 2007. The Fund’s strategy is to assemble a short-biased portfolio of asset-backed securities (“ABS”) that the Investment Manager believes are most likely to produce high returns during periods of adverse credit performance for residential mortgages, and for mortgage-backed securities (“MBS”) and ABS. Returns will come from two principal sources: (i) market value changes arising from changes in credit spreads on the Fund’s short positions; and (ii) credit default payments from counterparties on credit default swaps (“CDS”) or other derivatives.”
Short answer? They bet against mortgages in Jan, 2007.
How did they do?
NET ASSET VALUE PER SHARE, BEGINNING OF YEAR= $ 100,000.00
Net investment income = $ 7,873.42
Net realized and unrealized gain = $ 237,056.11
————–
NET ASSET VALUE PER SHARE, END OF YEAR= $ 344,929.53
==============
Total return(b) 244.93%
The total investment in the fund was $321.3 million.
At December 31, 2007, 931.50 shares were issued and outstanding.
Disclosure (“none” means no position):None
Visit the ValuePlays Bookstore for Great Investing Books
This work is licensed under a Creative Commons Attribution 2.5 License.