CNNfn - 10/02/98
Everest Capital loses nearly half of the $2.7B it managed at start of year
October 2, 1998: 8:11 a.m. ET
NEW YORK (CNNfn) - Everest Capital Ltd., a Bermuda-based hedge fund operator, reportedly has lost nearly half of the $2.7 billion
it was managing at the beginning of the year, making it the latest victim in the emerging market fallout. The Wall Street Journal
reports that Everest has lost $1.3 billion so far this year in its two large hedge funds, which had invested heavily in Russian bonds
and Latin American stocks. The losses include major investments by financier Nelson Peltz, chairman and chief executive of RC
Cola parent Triarc Cos. Two endowments for Yale and Brown universities also suffered heavy losses, according to the report. Peltz,
one of the original investors in Everest Capital Fund, reportedly had about $6 million left in the fund at the end of July and Triarc
(TRY) also had a "couple of million" dollars in the fund, the Journal said, quoting a spokesman for Pelz. In a Sept. 9 letter to
investors, Everest Capital Frontier Fund founder Marko Dimitrijevic reportedly revealed the fund's value had plunged 52.4 percent in
August, another 7 percent in early September and 68 percent for the year. "The magnitude of the losses on the Russian debt and
the speed at which they occurred were something that I have never encountered since I began working in professional money
management 17 years ago," he reportedly wrote. Dimitrijevic's other large fund, Everest Capital Fund, had lost 42 percent of its value
through August. Still, the fund is financially better positioned than Long-Term Capital Management, the hard hit hedge fund that was
bailed out last week by a consortium of 14 banks and brokerages, the Journal said. LTCM was highly leveraged and was on the
brink of collapse until the group of financial institutions pulled together a $3.6 billion equity rescue package. Everest told the Journal
it eliminated all leverage, which helped to insulate lenders from the fund's losses.
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