The Red Sox owner, John W. Henry, has blown another trade. No, not another Eric Gagme trade. I’m talking about the “carry trade”,
Aug. 20 (Bloomberg) — A doubling in currency volatility since June has knocked the “carry trade” off its perch as the most profitable strategy in foreign exchange, hurting investors from John W. Henry & Co. to Campbell & Co.
In one of the more popular carry trades, a U.S. investor who borrowed in yen to buy high-yielding Australian dollars enjoyed a return of 11 percent this year through June 5, data compiled by Bloomberg show. The gains have since been wiped out.
Chalk up another victim to the spreading U.S. subprime mortgage contagion.
John Henry has been a great owner for the Red Sox. Unfortunately for his hedge fund clients, his performance as a money manger has been more like that of the Tampa Bay Devil Rays.
In currencies, Boca Raton, Florida-based Henry’s largest loss in July was in the yen, Kenneth Webster, president and chief operating officer, said in a statement on its Web site. Assets at the firm, which is owned by John W. Henry, who also controls the Boston Red Sox baseball team, have plummeted by 75 percent since November to $479 million.
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At what point does this start to impact John Henry’s other businesses, namely, the Red Sox?
“Sorry fans, no free agent signings this year. Have you seen the prices of copper and soy beans lately? We couldn’t possibly afford it.”