King Street stockpiles cash
By Britt Erica Tunick
Mon Aug 8, 2011
The firm was already positioned cautiously amid volatile market conditions, which likely paid off during a week of wild volatility.
Cash is king for King Street Capital Management these days—a fact that had previously elicited mixed reactions among the firm’s investors but now looks extremely prescient following Standard & Poor's downgrade of U.S. Treasuries and the wild market gyrations that followed.
After cashing out on several positions in the firm’s portfolio at the end of 2010, and facing limited investment opportunities, King Street started 2011 with roughly 60% of the firm’s $19.5 billion in assets under management in cash. Since the beginning of the year the firm has put nearly $2 billion of that capital to work, but a handful of investors say they are frustrated to be paying management fees for a portfolio that is still so heavily in cash. For the most part, however, the majority of King Street’s investors believe the...
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