The hedge fund that takes disaster in its stride

It is a mistake to hedge all tail risks at the same time; far better to accept little losses and base an investment strategy on lumpy payouts, at least according to Mark Spitznagel, founder of hedge fund Universa Investments. Mark Pengelly reports

Having been caught out by the ferocity of the financial crisis, investors are now much more aware of the risks of extreme events - and the fact they seem to occur a little more frequently than many had thought.

This change in perception has led to an increasing interest in a new generation of funds designed to perform well in times of crisis. One of the largest is Santa Monica, California-based Universa Investments - a hedge fund thought to have around $6 billion in assets. The company runs a