Passport falls short
By Lawrence Delevingne
Mon Mar 26, 2012
After falling in love with John Burbank’s big bets, some investors worry he is now running a not-so-risky business.
Everything about John Burbank is big. He has expansive macro
views on world economic deleveraging and the growing demand for
natural resources. His $3.8 billion San Francisco firm,
Passport Capital earned 219.7% in 2007 by being on the right
side of the subprime credit fallout, and his flagship fund has
produced a net annualized return of 19.2% since its August 2000
inception. And with his large frame and full beard, he has a
commanding physical presence.
But ever since Passport's near-death experience in 2008-when
the flagship Global strategy lost 50.9%- Burbank has bet
relatively small. Since then, the equity-focused macro strategy
has had its substantial long gains muted by losing short
positions that some investors attribute to an enhanced emphasis
on risk management. The result, they argue, has been the
flagship strategy's underperformance during the past 36 months,
during which it rose 3.4%...
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