LTCM: The Innovative Financial Technology Company

Long-Term Capital Management L.P. (LTCM) hedge fund management used absolute-return trading strategies that combined sophisticated analytics (tee hee!) with 100 to 1 financial leverage.

The firm’s master hedge fund, Long-Term Capital Portfolio L.P., collapsed, leading to an agreement on September 23, 1998, among 16 financial institutions—which included Bankers Trust, Barclays, Bear Stearns, Chase Manhattan Bank, Credit Agricole, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, Paribas, Salomon Smith Barney, Societe Generale, and UBS—for a $3.6 billion recapitalization (bailout) under the supervision of the Federal Reserve.

This is their promotional materials circa 1996:

 

 


12310