Hedge Fund Brothers Feel The Pain

Tim Barakett and his brother, Bret Barakett, run two high-flying hedge funds that have exceeded market benchmarks over the past few years, but both have encountered problems as the markets sold off in recent months.

Tim Barakett is the managing director at Atticus Capital. Atticus Capital, a $14 billion hedge-fund, was recently forced to quiet rumors it was closing down and liquidating after its two main hedge funds were hit with large losses.

Atticus was hit hard by the major stock sell off. As of last quarter, Union Pacific (NYSE: UNP), Burlington Northern (NYSE: BNI), Mastercard (NYSE: MA), ConocoPhillips (NYSE: COP) and NYSE Euronext (NYSE: NYX) were some of Atticus's largest holdings. Some of these stocks like Mastercard and NYSE Euronext have been cut by more than half since Atticus purchased these stocks.

Now it appears that Tim's brother, Bret Barakett's Tremblant Capital is also suffering performance problems. The NY Post reported that the volatile markets in August and September hurt Tremblant's otherwise great record. Through the end of September, Tremblant's main fund was down 27.9% for the year after losing 19% in September alone, according to data the NYPost gathered from investors.

A smaller fund at Tremblant Capital, Tremblant Concentrated, is down 40.1% following a deep decline of 27% drop in September.

The funds obviously got hurt after the markets fell in August and September. The Post reported assets across all three Tremblant funds have dropped from a peak of $4.5 billion last year to just $2.1 billion.

The Barakett boys are definitely not the only hedge funds having trouble as hedge fund redemptions are likely to be at record levels by year end. Other large hedge funds to report trouble recently, include Citadel, Third Point, Highland Capital, and SAC among others.

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