TOSCA

THE events of September have had a profound negative effect on our performance. On behalf of the team, we apologise for this outcome. It is emotionally and financially draining that after eight solid years the fund should be so damaged by the failed global monetary system. The speed of regulatory intervention, the mania of negative business coverage and panic have clearly hurt our mid-term investment plans.

OAKTREE

WE never claim to be able to invest at the bottom. So we always consider it inevitable that we’ll buy on the way down, and that’s what we’ve done to great effect in the past. Our funds’ recent losses prove we’ve been doing just that. In other words, we’re grabbing at falling knives. Others may refuse to do so and instead wait for the dust to settle and the uncertainty to be resolved. We consider it our job to catch falling knives - in a careful, skilful manner.

CITADEL

REGRETFULLY, we did not foresee the financial disaster that was to unfold in September. The financial crisis dramatically raised the cost of borrowing and reduced the availability of credit to market participants, materially reducing the value of cash assets. The decision of regulators to ban the short-selling of equities created material dislocations across many of our portfolios and disrupted our ability to assume and manage risk.

ELLIOTT

THE next time anyone tells you, as the geniuses who run our financial system have done, that the ever-rising prices of homes should be counted in savings, you should lean close to his/her ear and scream: “IDIOT!” The free-market theological fantasy related to the American financial system has obviously collapsed. Mistakes will be made and mud will splash on our fenders as we manoeuvre through the muck but we will reach the other side.

GREENLIGHT

OBVIOUSLY, this was a very frustrating quarter and the environment remains scary. While the result is not what we would like and we made some mistakes, we believe that our portfolio management has been reasonable. In hindsight, our suggestion from last quarter’s letter to go to cash and go to the beach would have been the better option. Over the short term, our response has been to reduce our exposure and to exit our most marginal ideas.

MAVERICK

YESTERDAY I was asked: “Wouldn’t it be easier just to hang it up rather than deal with these preposterous markets and the looming high water marks?” I replied: 1) I love what I do; 2) I am way too proud and competitive to walk away from the most compelling market I have seen in 15 years; and 3) Maverick’s investors have been wonderfully supportive of our effort and we fully intend to reciprocate this loyalty by honouring any high water marks we may face.

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