Hedge fund veteran Barton Biggs dies at 79

Hedge fund veteran Barton Biggs, whose Traxis Partners strategy was recently made available to the wider world via Deutsche Bank’s Ucits platform, has died at 79.

His death was communicated to employees at his former employer Morgan Stanley by chief executive officer James Gorman.

Biggs was active in the hedge fund industry with its initiators, and famously had lunch in Manhattan with the industry’s founder Alfred Winslow Jones.

There, it is reported, Jones asked him if he washed his hands in the bathroom – and when Biggs gave the wrong answer, Jones dismissed him jokingly as “a conventional thinker”.

However, Biggs went on to be famed for making suggestions to clients that went in the face of what was, at the time, conventional wisdowm.

In the late 1990s he said to sell dot.com shares, just before the March 2000 crash, an event many ‘conventional’ thinkers failed to predict.

Biggs also foresaw the US bull market from 1982, before US stocks for eight years running, and the bear market for Japanese shares before 1989, since when it has fallen nearly 80%.

In surviving the dot.com crash Biggs outwitted industry peers such as Julian Roberston, whose Tiger Management folded just before the market turned.

Biggs worked at Morgan Stanley until 2003, aged 70.

He then started Traxis Partners, but hit problems in the 2008/2009 credit crunch – his Traxis Fund, which held $635m in mid-year, lost 31% by the end of 2008. The year hit the fund’s annual return since 2003 badly, leaving investors barely 2.1% a year better off.

But Biggs and his co-managers then correctly called the turn in March 2009, to end the year with three times better returns than his industry’s 20%.

By 2011 he had opened up an onshore version of the strategy, made available to Deutsche Bank’s clients via its Ucits fund platform. Biggs’s positive outlook for equities at the time accorded with that of Deutsche PWM.

It was, however, his negative calls – on Japan and tech stocks – and his steps into emerging markets, that earned his name.

In mid-1999 he called the dot.com boom “the biggest bubble in the history of the world”, citing his bullish plumber.

He also turned his hand to writing, as he had studied English and creative writing at Yale University.

His memoir, Hedgehogging, published in 2006, is on the obligatory reading list for those aspiring to work in the hedge fund industry. He also wrote Wealth, War and Wisdom, published in 2008, about how financial markets discounted major events during World War II, and a novel about a fund manager in the turbulent markets last decade.

He said of the novel: “I’m interested as to how hubris and arrogance have destroyed people’s lives, and not just the lives of the hedge-fund money managers, but the lives of their wives, children, dogs and everything else.”

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