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Even hedge fund billionaires tighten purse strings

International Herald Tribune- On a sun-splashed day this month, Harald Grant, a Sotheby’s real estate agent, showed his top listing to a hedge fund client.

The client himself was not touring the jaw-dropping, 11-acre estate, with its two swimming pools, 21 bedrooms and sweeping view of Lake Agawam in Southampton, an exclusive Long Island village outside New York City. Instead, he had sent a representative – a fast-talking young woman with jewels on her fingers and a cellphone pressed to her ear.

“So, asking is 48 million,” she said. “Magnificent.”

But unsold. There have been several low-ball offers for the estate, dubbed Old Trees, over the past year, mostly from hedge fund executives and other Wall Street barons, Grant said.

A few years ago, as markets boomed and the new hedge fund rich banked paydays that surpassed $1 billion, Old Trees, with its Gatsbyesque allure, would have been snapped up by a brash executive looking to crash the old money gates of Southampton.

But a cautiousness has begun to creep in, brought on by the recent turmoil in the markets, the uproar over the conspicuousness of the 60th birthday party for the equity buyout chief Stephen Schwarzman and the cries from Capitol Hill to increase taxes on hedge funds and private equity billionaires.

In August, hedge funds showed a negative return of 2.5 percent, according to the HRFX index of leading funds compiled by Hedge Fund research. On the surface it does not seem like a lot, given the billions of dollars that hedge funds have accumulated.

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