So, it appears somebody in San Diego had the wherewithal to see the hedge fund Amaranth Advisors for what it was before it collapsed. The county pension fund, of course, lost $105 million, if not more.
Officials from the San Diego Foundation just confirmed for me that their endowment had a $500,000 investment in Amaranth managed by a firm called Harris Alternatives LLC. Harris representatives visited Amaranth in May to check things out. They were concerned enough to get the San Diego Foundation’s money out right away, even though the fund had to pay a redemption fee of 2 percent.
Four months later, Amaranth collapsed, losing more than two-thirds of its value in a matter of days.
Duane Drake, the chief financial officer for the San Diego Foundation, said he was pretty happy that the endowment was able to get its funds out of Amaranth before the hedge fund imploded.
“It made us feel really good that the oversight we have in place worked,” Drake said.
He said the managers from Harris had returned from visiting Amaranth “very uncomfortable” with how much leverage the fund was carrying. He said they were also concerned about the fund’s apparent concentration in energy trading.
“As a public charity, we certainly want to be very prudent with these dollars,” Drake said.
Drake said the San Diego Foundation has 7 percent of its $240 million in assets invested in hedge funds.
The county pension fund has 20 percent of its $7.7 billion in hedge funds.