Clarium Capital
Encyclopedia
Clarium Capital Management LLC is an American investment management
and hedge fund
company that pursues a global macro
strategy, that Peter Thiel founded in San Francisco in 2002. Clarium's assets under management grew to $8 billion in 2008 after which a series of unprofitable investments and client redemptions resulted in its assets declining below $1 billion as of 2011.It is headquartered in New York City
, and also has an office in San Francisco, California
. The company was founded by Peter Thiel
, co-founder of PayPal
and early investor in Facebook
.
. Clarium is an employee-owned firm that invests in public equity (primarily in micro-cap
companies), fixed income
, and hedging markets. The company's activities were temporarily put on hold while Thiel worked at PayPal, and then activities resumed in 2002. Unlike most funds, which charges clients about 2% of their total assets invested, Clarium charges a performance fee
of 25% of the increase in the fund's net asset value
.In June 2010 Thiel closed the New York office to consolidate the company and its employees into one location at its San Francisco office.. The firm employs fundamental and quantitative analysis to make its investments. It also conducts in-house research to make its investments.
, raised to $7.8 billion in June 2008, then dropped to $1.5 billion in July 2009, after investors withdrew money from the fund. The fund lost most of its value in 2008 due to large bets against the US dollar, in the hopes that it would drop in value. The fund subsequently lost 13% in August 2008 and it lost 18% in October 2008. Although the fund eventually recovered, with losses of only 4.5% for 2008 compared to the average of 20% for other hedge funds, most investors had already pulled out their investments. Subsequent down years have reduced the fund's assets under management
to $681M as of December 2010. Clarium Capital Management was reported to have had big losses in 2010. The firm has continued to struggle with bets that it made on inflation and the US dollar.
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
and hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
company that pursues a global macro
Global macro
Global Macro is defined as the strategy of investing, on a large scale, around the world using economic theory to justify the decision making process...
strategy, that Peter Thiel founded in San Francisco in 2002. Clarium's assets under management grew to $8 billion in 2008 after which a series of unprofitable investments and client redemptions resulted in its assets declining below $1 billion as of 2011.It is headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, and also has an office in San Francisco, California
San Francisco, California
San Francisco , officially the City and County of San Francisco, is the financial, cultural, and transportation center of the San Francisco Bay Area, a region of 7.15 million people which includes San Jose and Oakland...
. The company was founded by Peter Thiel
Peter Thiel
Peter Andreas Thiel is an American business magnate, venture capitalist, and hedge fund manager. With Elon Musk and Max Levchin, Thiel co-founded PayPal and was its CEO...
, co-founder of PayPal
PayPal
PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders....
and early investor in Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
.
Company
The company moved its headquarters from San Francisco to New York City so that it was closer to Wall StreetWall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
. Clarium is an employee-owned firm that invests in public equity (primarily in micro-cap
Micro-Cap
Micro-Cap. is a SPICE compatible analog/digital circuit simulator with an integrated schematic editor that provides an interactive sketch and simulate environment for electronics engineers. It is developed by Spectrum Software and is currently at version 10....
companies), fixed income
Fixed income
Fixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....
, and hedging markets. The company's activities were temporarily put on hold while Thiel worked at PayPal, and then activities resumed in 2002. Unlike most funds, which charges clients about 2% of their total assets invested, Clarium charges a performance fee
Performance fee
A performance fee is a fee that an investment fund may be charged by the investment manager that manages its assets, calculated by reference to the increase in the fund's net asset value , which represents the value of the fund's investments...
of 25% of the increase in the fund's net asset value
Net asset value
Net asset value is a term used to describe the value of an entity's assets less the value of its liabilities. The term is most commonly used in relation to open-ended or mutual funds because shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net...
.In June 2010 Thiel closed the New York office to consolidate the company and its employees into one location at its San Francisco office.. The firm employs fundamental and quantitative analysis to make its investments. It also conducts in-house research to make its investments.
History
Clarium launched in 2002. Through a series of correct bets in the energy markets that global demand would cause an oil shortage Clarium's 2002 performance was reported as "impressive".Recent performance 2008-2010
Clarium was down 4.5% in 2008, down 25% in 2009, and down 23% in 2010. For the first half of 2008, the fund had a YTD return of 57.9%. At the start of 2008, the fund had $4 billion in assets under managementAssets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
, raised to $7.8 billion in June 2008, then dropped to $1.5 billion in July 2009, after investors withdrew money from the fund. The fund lost most of its value in 2008 due to large bets against the US dollar, in the hopes that it would drop in value. The fund subsequently lost 13% in August 2008 and it lost 18% in October 2008. Although the fund eventually recovered, with losses of only 4.5% for 2008 compared to the average of 20% for other hedge funds, most investors had already pulled out their investments. Subsequent down years have reduced the fund's assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
to $681M as of December 2010. Clarium Capital Management was reported to have had big losses in 2010. The firm has continued to struggle with bets that it made on inflation and the US dollar.
Further reading
- "Clarium Capital Gained 4% In May As Deflation Trade Returned". Wall Street Journal. June 4, 2010.