Wednesday, February 11, 2009

Dan Zwirn's Attempt To Join The Lazarus Line

Meriwether, Zimmerman, Gendell, Weinstein... Seems hedge fund managers really have no transferable skills as all they can do is beg for more money to burn. However, it really starts to hurt when you realize that not only can you not raise a new fund, but you very well have to jump from interview to interview and wait for that 3rd round call back late into the night and, (if lucky) work for some other portfolio manager (or heaven forbid trader).

Such is the fate of former distressed debt god Dan Zwirn, who was one of the more impressive flame outs of early 2008, at a time when the credit crisis was only in its warm up acts. According to today's Hedge Fund Alert, Dan Zwirn, whose DB Zwirn Co. fund was a $10 billion heap of toxic 2nd lien assets at is peak, has "updated his resume and is looking for fund management work. He already has held discussions with several firms." Looks like his attempt to raise a new fund, ZLC, has met with spectacular failure. What is appalling is that he is trying to leave DB Zwirn at a time when the fund is only about 20% done with unwinding its ultra illiquid assets, and "is talking to investors about installing new management to oversee the liquidation of D.B. Zwirn funds, a process that could take four years." Nothing like leaving your existing employees to sort out the mess you created.

The 37 year old, who is clearly missing the glory days of corporate jetdom, was last seen waiting to hear back from headhunters if they had any medium-level analyst openings.
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Anonymous said...

He is not a total asshole, this was from the Post last fall. Much of the remaining work is clerical etc, let him go try to find a job.

I might not hire him but have seen underlings get treated far worse.

Daniel Zwirn, a once-highflying hedge-fund manager whose fund imploded back in February, has been dipping into his own pocket over the past several months to keep the lights on at his firm D.B. Zwirn & Co.

According to sources, Zwirn has been writing checks totaling as much as $50 million to cover the costs of staying in the Midtown office he leases at 745 Fifth Avenue, as well as to pay vendors and employees as he unwinds his $5 billion hedge fund...... The manager has recently tapped into deferred compensation, including $12.6 million of his own money, to fund the firm’s operations, according to Hedge Fund Alert. By doing so, it ensures his investors get their money back.

Despite the situation, Zwirn has generated goodwill with some of his investors, leading him to consider launching a new fund. However, it’s unclear whether that plan will get off the ground given the carnage in the hedge-fund world.

November 13th

Anonymous said...

Let Dan Zwirn go find a job? His investors have pulled the plug on him and he is under an ongoing investigation by the SEC for:
1. Over stating asset values which inflates his fees and makes the fund look better than it actually was.
2. Transfering funds between offshore and onshore accounts to make the fund performance look better than it actually was.
3. "prepaying" his management fees - what is that called in banking?
4. Expensing his private jet to his investor/partners.
5. Having his audit delayed by 5 months for obvious reasons and screwing up his fund of fund investors with auditors warning about proper steps not taken to prevent ongoing "problems."
6. Hiring known felons.
And this is just what is know publicly.
He has also paid out millions of the funds' dollars to lawyers (including Vinson & Elkins of Enron fame) in legal actions from Hawaii to Virginia as he shuts down businesses that borrowed from his fund exposing the fund to at least two potential class action lawsuits.
Dan Zwirn, what a catch. Where do we send our money to?