LTCM’s public success spawned imitator funds with eager capital

Evidence

Imitation seems to have intensified after LTCM’s success became public. Other traders were being told “LTCM made 2 billion last year. Can't you?" (Meriwether interview). For example, LTCM's success meant that it rapidly became largely closed to new investors, and in January 1998 a new fund, Convergence Asset Management, "raised 700 million in a single month purely from disgruntled investors denied a chance to buy into LTCM” (Dunbar 2000, p. 197). — Donald MacKenzie, An Engine, Not a Camera, 1025

Categorization

• XREF: Links to the performativity/contagion thesis — the visible success of a strategy creates its own copycat supply, echoing Briand/Dunbar literature and the broader financialization scholarship on herding. — connects to: Other traders imitated LTCM’s successful arbitrage models and strategy — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 155; LTCM’s disclosed strategy led rivals to take similar arbitrage positions — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1027; Arbitrage strategies became consensus trades as hedge funds imitated LTCM — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1029

Broader Connections

• LTCM’s disclosed strategy led rivals to take similar arbitrage positions #expands (0.95) — Donald MacKenzie, An Engine, Not a Camera, 1027
• Arbitrage strategies became consensus trades as hedge funds imitated LTCM #corroborates (0.90) — Donald MacKenzie, An Engine, Not a Camera, 1029