Toomre Capital Markets LLC

Real-Time Capital Markets -- Analytics, Visualization, Event Processing, and Intelligence

Binghamton University Graduate Kirk Wright in Hiding

The Press & Sun-Bulletin of Greater Binghamton New York has published a story entitled BU graduate in hiding after taking money and running that has further information on Kirk Wright and his International Management Associates hedge fund. The article written by Jeff Platsky starts:

Here's a Binghamton University alumnus who won't be listed with Tony Kornheiser, Paul Reiser, Billy Baldwin or Camille Paglia as distinguished graduates. You won't read about him in the university's Alumni News or its weekly newspaper. But you can read about him on the front page of last Thursday's Wall Street Journal. And you can be sure the university won't ask for publication rights to the story. That's because this graduate is accused of bilking investors of up to $185 million in an Atlanta-based hedge fund.

The article goes on to confirm that Kirk S. Wright is indeed a “honored’ graduate of Binghamton University where he received his bachelor’s degree in political science. Kirk Wright apparently then went on to obtain a master’s degree in public administration from Harvard University. What is fascinating though is the following quote:

Wright's International Management Associates reported a 27 percent average annual return to investors over the past seven years, about five times the average annual return of the Standard & Poor's 500 over the same period. You can make money fast with those types of returns. Based on Wright's numbers, an investment would have quintupled in value in seven years if left in his hands.

While we at Toomre Capital Markets had seen the 27 percent number mentioned before, we did not appreciate that this was the supposed “average” return IMA produced over a seven year period. To produce such incredibly high investment returns seems near impossible with the Nasdaq crashing in 2000, the S&P 500 gaining something like 5% a year and the domestic bond market in a trading range. Where the heck was the investor’s sense of skepticism when considering to invest with this hedge fund operation? What due diligence, if any, was ever performed to substantiate the reported return numbers?