Darden Capital Management Makes the News

Question

Here's a link to a Bloomberg article published today called "Lehman Hedge-Fund Clients Left Cold as Assets Frozen.

https://www.bloomberg.com/apps/news?pid= ... efer=home#

There's a specific mention of Darden Capital Management. Things have been kind of crazy the last few weeks. We used Lehman as our prime brokerage, then after the bankruptcy (securities held by a brokerage are segregated and not considered assets of the brokerage firm) we transferred to Wachovia. I can't really go into detail, but anyone who follows the news knows that Barclay's bought parts of Lehman, Wachovia got bought, etc.; and for us some of the transfers of securities were delayed, didn't take place, were recalled, etc.

For those that aren't familiar, Darden Capital Management is one of the most (the most?) well-known student-run investment clubs. Unlike many other clubs, students make all decisions independently rather than just pitching to a real investment manager or some faculty adviser. Great experience. Just another one for the old scrapbook.

fall09 · Answer

How big is this fund?

bsd_lover · Answer

To add to this Virginia also boasts of the "Chesapeake capital trading room" . :https://www.commerce.virginia.edu/Technology/Labs/MTC.html

Do MBA's access this peli ?

This was built by $500,000 donated by Jerry parker - one of the original turtle traders (and UVA alum). - Source: The Complete Turtle Trader by Michael Covel

pelihu · Answer

The fund has about $7mm total under management, split among four funds with different strategies.

MBAs do not regularly access the Chesapeake trading room. That's at the undergraduate business school, although we do have a trading class. We also host a big two-day value investing conference and this year, we received invitations for 14 slots at the Berkshire Hathaway annual conference (club and UVA hold the stock and we normally get 3-4 slots) including tours of two portfolio companies and a sit-down with the Oracle himself. I really hope I get selected for this; I understand it's a blast.

pguard · Answer

Here's the detailed report.....ouch

Virginia's Student-Run Investments Trapped by Lehman Bankruptcy
2008-10-01 17:00:53.240 GMT

By Tom Cahill
 Oct. 1 (Bloomberg) -- University of Virginia business school students joined the ranks of hedge-fund managers hamstrung by the bankruptcy of Lehman Brothers Holdings Inc.
 Darden Capital Management, a $6.2 million fund-management club run by 18 students of the university's Darden School of Business, used Lehman as the sole prime broker for its four funds. Now those assets are among the billions trapped by the largest bankruptcy in history, along with assets from hedge funds including GLG Partners Inc. and RAB Capital Plc.
 New York-based Lehman provided the prime-broker service of clearing trades, providing loans and handling administration, all at a reduced rate, according to Orlando Gaviria-Cadavid, one of the Darden portfolio managers.
 ``We actually don't know where the assets are and we can't trade right now,'' said Gaviria-Cadavid, a 30-year-old Colombian due to graduate next year with a master's degree in business administration. ``Right now, we're just generating ideas, hoping the funds will come back to us.''
 Darden, in Charlottesville, Virginia, is the 14th-ranked business school in U.S. News & World Report magazine's 2008 ranking. The club, founded in 1990 with a $250,000 endowment grant, has grown into one of the largest student-run fund management organizations in the U.S., according to its Web site.
 ``The idea is they're actually responsible for real money so they've got to be serious in the decisions they make,'' said Beth Schmid, a spokeswoman for the school. ``It gives them real life experience they need to go out and find a job. Certainly these days it may be too real.''

Darden Capital Management Makes the News

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