A Bloomberg reporter observed last summer that Andy Redleaf looks more like Jerry Garcia when he was lead guitarist of the Grateful Dead than he does a Gordon Gekko–style financier. He is short, the New York Times has noted, and has “a belly big enough to balance a pen [on], which he does sometimes.”
It all rings true when Redleaf, 53, shuffles into a conference room at his firm’s offices near Lake Calhoun—big salt-and-pepper hair, engaging smile, a guy you instantly want to like. He’s dressed as if he were joining a backyard barbecue, in a blue golf shirt and jeans, and carries only a list of today’s interview questions and a magnifying glass. Redleaf uses the magnifier frequently when he reads, compensating for macular degeneration that was first diagnosed in 1995. He speaks haltingly, with an occasional stutter.
If the phrase “hedge fund” calls up images of steely market movers, polished to the tips of their Pradas or John Lobbs, Redleaf defies them. He is CEO and founder of one of the world’s most successful hedge fund families: Minneapolis-based Whitebox Advisors.
Whitebox’s multi-strategy fund ranked 58th on Barron’s annual list of the world’s 100 best-performing hedge funds in 2009. HFM Week, a trade publication, honored Whitebox for the performance of that fund and two others that year. The multi-strategy fund, the firm’s principal investment pool, generated returns of 80.6 percent in 2009 and 17.6 percent in 2010, easily outperforming industry-wide indexes for similar strategies.
Last year, Redleaf served up a slashing, witty critique of big banks, regulators, and academe in his book Panic: The Betrayal of Capitalism by Wall Street and Washington, which was coauthored and published by Richard Vigilante, Whitebox’s communications director. The book fingers culprits in the financial meltdown in 2008, and rips popular academic theories of how the securities markets work. Panic has won influential fans, including Yale University economist Robert Shiller and New York Times columnist Joe Nocera.
Redleaf gets kudos for being among the first to predict the seize-ups that shook credit markets starting in 2007. But he failed to foresee the impact of the financial meltdown on Whitebox, which took its worst-ever drubbing in 2008. Now he and his hedge funds are back on top, after what Barron’s, at the end of 2010, called a “ho-hum” year for the industry overall. This year looks to be anything but that.
