Long-Term Capital Management


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Long-Term Capital Management

A defunct hedge fund, established in 1993, that, at its height, held positions worth more than $1 trillion. Its investment strategy was to take advantage of arbitrage opportunities in bonds and other fixed-income securities; profits on individual transactions were small, so LTCM was required to borrow massive amounts of money in order to operate. It was at first enormously successful, with a 40% annualized return after fees. However, when Russia defaulted on its government bonds in 1998, there was a steep drop in bond prices, endangering LTCM's positions because of its high leverage. Because LTCM controlled upwards of 5% of the bond market at the time, defaulting on its loans would have caused global financial panic. It was eventually bailed out by a consortium of organizations under the supervision of the Federal Reserve.
References in periodicals archive ?
As part of our long-term capital management strategy, we are pleased to announce our exit from the SBLF program,' said Christopher R.
corporate punitive damage award, the highest profile university sexual abuse case, employee sabotage that threatened the very existence of a company, environmental contamination, and the complex $4 billion recapitalization of Long-Term Capital Management by a consortium of 14 of the world's largest financial institutions.
A five-year reinsurance arrangement is signed by Aetna (AET), a diversified health care benefits company with Vitality Re V as part of its long-term capital management strategy.
Some see the move in gold as a possible flashpoint for a broader economic and markets shock comparable to the collapse of hedge fund Long-Term Capital Management in 1998 and even the financial crisis a decade later.
In 1998, Brian was one of six managers selected from a consortium of 14 global financial institutions to manage the liquidation of hedge fund Long-Term Capital Management.
The trickle-down effect from the fall of the Asian Tigers did not end there, for it also contributed to the 1998 Russian financial crisis, which in turn caused Long-Term Capital Management in the US to collapse, after losing $4.
He was at one time employed at Long-Term Capital Management, a hedge fund whose 1998 collapse nearly caused a global crisis.
Ellenberg calls it, as used by Long-Term Capital Management, a Martingale continuous double-down scam.
4 on Thursday, noted author Roger Lowenstein will deliver the breakfast keynote address titled "The Liquidity Trap: From Long-Term Capital Management to Lehman.
In 1998, Long-Term Capital Management, a giant hedge fund, collapsed, but the industry still managed a small positive return.
Citigroup in November said Richard Stuckey, who helped stabilize hedge fund Long-Term Capital Management, was going to fix its troubled subprime mortgage portfolio.
Since the 1998 near collapse of Long-Term Capital Management (LTCM), a large hedge fund--a pooled investment vehicle that is privately managed and often engages in active trading of various types of securities and commodity futures and options--the number of hedge funds has grown, and they have attracted investments from institutional investors such as pension plans.
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