Billion Dollar Wall Street Baller no more?: John Devaney, the flamboyant hedge fund manager and head of United Capital Markets Holdings who made massive wrong way sub-prime bets, was forced to liquidate his Horizon funds. And unfortunately, investors will be getting bupkus. Yep. A total zero.
Early this year, Devaney spoke at a conference where he said that it was time to start moving back into the sub-prime market. To keep his sinking empire afloat, he had been selling assets -- including his prized yacht "Positive Carry", helicopters, a plane and a Renoir.
According to Bloomberg:
The Horizon group of funds run by Devaney's United Capital Markets Holdings Inc. couldn't meet a margin call from Deutsche Bank AG at the end of June, according to a letter to clients today obtained by Bloomberg News. Deutsche Bank then seized and auctioned off the collateral.
``The survival of the funds and any potential recovery for their investors has been dependent on these lenders continuing their relationships with the funds,'' Devaney wrote in the letter dated July 9. United Capital is based in Key Biscayne, Florida.
``Since the funds currently owe Pershing more than the market value of the bonds still held by the funds, we are expecting that there will be no equity remaining and that the funds will be fully liquidated,'' Devaney said in the letter.
He was also quoted in the NY Times:
“I’m devastated, I’m totally devastated,” Mr. Devaney said by telephone from Aspen, Colo. “I feel horrible that I’ve lost my own money and that so many people who saw the skills I have and trusted in us have now been hurt.”
“I’ve taken as much pain as virtually anybody in this industry,” Mr. Devaney said. “I am bleeding, personally.”
So how long before he annouces his next fund?
United Capital Liquidates Funds, Investors Get Zero - Bloomberg
Hedge Fund Manager Describes Rock Bottom - NY Times
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