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%...
ISSN: 2151-1845 / CDC10004H
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