Lahde, who bet versus subprimes, quits hedge funds

NEW YORK, Oct 17 (Reuters) - Andrew Lahde, the hedge fund founder who shot to fame with his small fund that soared 870 percent last year on bets against U.S. subprime home loans, has called it quits, thanking "stupid" traders for making him rich.

In a biting, but humorous letter to investors posted on the website of Portfolio magazine on Friday, Lahde told investors last month he will no longer manage money because his bank counterparties had become too risky.

Lahde ripped his profession in the letter. He noted another hedge-fund manager who recently closed shop and was quoted in The Wall Street Journal as saying: "What I have learned about the hedge fund business is that I hate it." To which Lahde responded, "I could not agree more with that statement.

"The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking," said Lahde, who according to the website birthdates.com is 37.

"These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America."

Lahde, whose Lahde Capital's Short Credit Fund returned 886 percent in 2007, said he didn't have a strong opinion about any market other than to comment, "Things will continue to get worse for some time, probably years."

But while he will no longer manage money for high-net worth individuals or institutions, he will continue to manage the wealth he has amassed.

"Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest," he said. "I am content with my rewards. Moreover, I will let others try to amass nine-, 10- or 11-figure net worths. Meanwhile, their lives suck."

Last autumn, the Financial Times reported that Lahde had launched a fund to bet against commercial real estate -- which made 42 percent in its first two months.

"I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life -- where I had to compete for spaces in universities and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not," Lahde said. (To see more of Lahde's farewell letter, please see here) (Reporting by Jennifer Ablan; Editing by Leslie Adler)

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