| NEW YORK, July 25
NEW YORK, July 25 Scoggin Capital Management, a
$3.3 billion hedge fund firm, is facing a challenging year
along with much of the hedge fund world, but its managers see
lucrative opportunities ahead, according to July 15 investor
The New York-based multi-strategy manager said it lost 4.22
percent in the first half in its flagship Scoggin Capital fund,
but was up about 1.7 percent in its Worldwide Fund and up 3
percent in its Credit Opportunities Fund, according to the
"Welcome to the bear market of 2008 -- one of the toughest
markets we have ever witnessed," said Scoggin partners Craig
Effron and Curtis Schenker, who founded the firm 20 years ago,
making it one of the industry's oldest.
The firm, which generated annualized returns of 18 percent
from 1988 through 2007, said it expects the current downdraft
across the financial markets to yield big opportunities in the
coming year or two.
"Over our 20-year history, we have seen four markets that
are similar to this one, albeit they were not as ugly. In each
case, we made outsized returns in the ensuring years," said
Scoggin. "We fully expect this time will play out in a similar
"We expect unbelievable opportunities to present themselves
as this downturn plays out," it said, but warned that "being
too early is far more dangerous in this environment than being
a bit late."
Scoggin officials declined to comment.
The firm said it is increasing its allocations to credit
strategies and reducing exposure to equities this year while
keeping significant amounts of cash on hand for future buying
Scoggin said it was hit by declines in Maguire Properties
MPG.N, a real estate investment trust that dropped from
around $30 per share in late December to $11.01 today. Scoggin
was the third biggest Maguire holder as of March 31 with a 9.4
percent stake, according to regulatory filings.
"We are fully expecting the stock to recover over the next
few quarters as the new management team implements its plan,"
said Scoggin in the letters, which were obtained by Reuters.
It said it made money in the bank debt of Georgia Pacific
and Charter Communications (CHTR.O).
"Once we are officially in a bear market, meaning down 20
percent, the bottom is not too far away," said Scoggin. "As the
general public and professionals alike begin to panic and dump
their holdings, opportunities to make money will become
(Reporting by Dane Hamilton; editing by Gunna Dickson)
(Reuters email: email@example.com. 646 223