A Portrait of a Fallen Hedge Fund Manager

Date: Monday, October 8, 2007
Author: Dealbook.blogs.nytimes.com

Victor Niederhoffer, the hedge-fund manager who lost his entire $130 million portfolio in the Thai stock market crash of 1997, has found himself out of luck again.

The latest downfall of Mr. Niederhoffer, who in September was forced to close two of his funds, including his flagship, Matador, is tracked in a long profile in The New Yorker this week. “The market was not as liquid as I anticipated,” he told the publication. “The movements in volatility were greater than I had anticipated. We were prepared for many different contingencies, but this kind of one we were not prepared for.”

The magazine tracks the woes — past and present — of this champion squash player, statistician and serial risk taker.

After his first hedge-fund blow-up in the 1980s, Mr. Niederhoffer was forced to sell his silver and take out a mortgage on his 20,000-square-foot home in Weston, Conn., to stay afloat. He got back in the game in 2002 with Matador, although he seemed to acknowledge at the time that it might be his last chance.

“I am still walking on very thin ice,” he told The New York Times two years ago. “And I am older. I am 61. I don’t have the resilience to come back again.”

Even so, his latest comments to the New Yorker suggest Mr. Niederhoffer isn’t ready to pack it in quite yet.