Peter Thiel’s Clarium Capital has been betting against a US recovery and paying a steep price for that. Peter Thiel blew more than 57% gain in 2008 and lost about 4.5% that year. During the first six months of 2009, he lost another 6%. In July 2009, Clarium returned 2.2% as the stock market stuttered in early July. Then lost another 4.5% in August. As the S&P 500 index surpassed the 1100 mark at the end of 2009, Peter Thiel’s losses totaled 25% for the year.
2010 wasn’t nice to Peter Thiel either. Clarium was down 13.8% as of July and the loss reached 17.1% by the end of October. November brought his year-to-date returns to -23%. Nobody was surprised when Patrick Wolff, a general manager at Clarium, left the firm to form his own hedge fund: Grand Master Capital. Clarium didn’t charge its investors a management fee (usually around 2% for most hedge funds) and instead opted for a 25% performance fee. This meant Clarium didn’t make any money for a very long time. We were actually surprised Clarium managed to survive this long.
According to Bloomberg, Clarium returned a negative 23 percent for 2010. We first couldn’t believe what we read, but Christian Baumgaertel, the editor of the article written by Saijel Kishan, confirmed the number. That means Clarium finally stopped losing money when there was a huge rally in the stock market. Even though the S&P 500 index had one of its best Decembers in recent history and Clarium has been more bearish than Nouriel Roubini, Peter Thiel didn’t lose anything in December. Good work Peter.