Home / FINANCE / ‘Cryptocurrency mania’ burnt a $1 billion sidestep account that was betting opposite chipmakers (NVDA)

‘Cryptocurrency mania’ burnt a $1 billion sidestep account that was betting opposite chipmakers (NVDA)

Dallas-based Carlson Capital’s Black Diamond Thematic account has mislaid 14.2% net this year by Jul 31, according to a customer refurbish reviewed by Business Insider, and bitcoin insanity is partly to blame. 

The $1 billion equity long-short account had been adult about 10% after fees around this time final year, Business Insider formerly reported. Carlson Capital manages about $9 billion firmwide.

Screen Shot 2017 08 03 during 4.33.59 PMMarkets Insider

“We are naturally unhappy by a opening of a initial half of 2017,” a portfolio managers, Richard Maraviglia and Matthew Barkoff, wrote in a fund’s second-quarter letter, that was also reviewed by Business Insider. 

In a letter, antiquated June, Maraviglia and Barkoff pronounced their fund remained brief a batch market, particularly in a semiconductor space. But a swell in seductiveness in bitcoin and ethereum has pushed shares of semiconductor makers higher. Their chips are used in a computers that solve formidable equations to cave for cryptocurrencies.

From a minute (emphasis added):

“Our biggest brief thesis given a initial entertain has been semiconductors where we see high inventories, double ordering, large capex supply responses and tangible pockets of weakening direct in smartphones, autos, and a Chinese visual market. Nonetheless, a zone has incited into something of a burble characterized best by a swell in GPU stocks, Advanced Micro Devices and Nvidia, driven by a cryptocurrency mania.  Bitcoin and Ethereum have depressed neatly over a past month, and we trust they will tumble a lot more. We trust a other side of this impossibly absolute accord pierce in record will be really essential for us though to date, it has been a poignant drag on performance.” 

Carlson’s flagship fund, Double Black Diamond, LP, is also down for a year, losing -2.1% this year by a finish of July. That account had only over $5 billion in resources as of 2013, owner Clint Carlson told trade announcement PI.

The organisation has 7 supports in total. Here’s Carlson’s scorecard for a firm’s 5 other funds, this year through Jul 31:

  • Double Black Diamond, LP: -2.1%
  • Black Diamond Partners, LP: -3.7%
  • Black Diamond Relative Value Partners, LP:  -3.2%
  • Black Diamond Arbitrage Partners, LP:  6.2% 
  • Black Diamond Mortgage Opportunity, II:  5.6%
  • Black Diamond Energy, LP: -6.8%


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