Baupost's Klarman blames Fed response to 2008 crisis for '22 volatility
Scott Olson


Seth Klarman, head of Baupost Group, told the hedge fund's investors that the Federal Reserve's response to the 2008 financial crisis sowed the seeds for last year's market slump.
"A boom based on easy-money policies will inevitably contain the seeds of its own destruction," he wrote in the year-end letter to clients, the Financial Times reported Wednesday.

He warned that last year's selloff "probably has further to go," and that there's the potential for a sovereign debt crisis.
The volatile market helped Baupost's 2022 performance, with it netting $1.6B from its hedging and helped to counter losses in its stock portfolio that included Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Meta (NASDAQ:META), and Just Eat Takeaway (OTCPK:JTKWY) (OTCPK:TKAYF).
The letter said the hedge fund posted a single-digit decline last year, outperforming S&P 500's 20% decline.
SA contributor John Vincent focuses on tracking Baupost Group's Holdings.


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