The terrace at One, in Toronto's Yorkville district, is more a scene than a restaurant, a tangle of the lithe and the tanned, of bare midriffs, bling and Bay Street boys, their ties rakishly askew.
It is also Rohit Sehgal's local, and in more carefree times, the star hedge fund manager shyly admits, he has been known to roll past in his new BMW on the drive home, indulging in a moment of boyish preening.
But on a warm evening in early August, as a sea of flesh presses in against the tables, Sehgal barely takes notice. He is fixated on the blinking red light of his BlackBerry, which in recent weeks has morphed into a messenger of doom, spitting out grisly updates on the collapse of another Wall Street titan, on brutalized stock markets and, of course, on the plunging value of Sehgal's portfolios.
"I'm afraid to open my e-mail and see the numbers, because I know it's fucking bad," he confides. "If you're down, your self-esteem goes down. I've been doing this for 30 years, but that never helps."
Sehgal, who is 62 and serves as chief investment officer of DundeeWealth's Dynamic Funds, is a walking embodiment of the swiftness and severity of the mortgage-fuelled credit crisis. Things have gotten so ugly, so fast, that even the smart money is getting killed--and Sehgal, who has gone from being a penniless crate-packer to one of the most revered money managers in the country, is one of the smartest.
Only a few months earlier, at the Lipper Awards in New York, Sehgal had been crowned the top hedge fund manager in his class in North America. Around the same time, Barron's ranked his flagship fund as the second best in the world: It had produced an annualized return of 60.2% over the previous three years, and a gaudy 38.6% in 2007 alone.
But that was before storied Wall Street firms began toppling like dominoes, inciting a wave of panic that turned the credit markets into a cryogenics project, and forced the U.S. government to embark on the biggest bailout effort in history.
When the commodities market began to unravel, sounding a prelude to the crisis, it was as though someone had removed a linchpin from Sehgal's growth funds, which have made heavy bets on the world's rising demand for energy, minerals and other natural resources.
July was especially painful. Sehgal's main hedge fund plunged 18% during that month alone--easily the worst 30-day spell the fund had experienced. His emerging markets fund, meanwhile, fell 20%. The results were only slightly better at his Canadian growth fund (down 11%) and his balanced fund (down 6.5%).
As he consoles himself with lobster spoons, a ribeye steak and frites, Sehgal confesses that in the course of his long career, he has never seen the markets behave this erratically. And it is getting to him. "I've never been more stressed," he says. "I'm getting tired. I'm getting older. This is the most responsibility I've ever had. I can't fail."
Sehgal was eight years old when he made his first trade, a precocious variant of what financial types call the "naked short." This is when someone sells stocks without technically owning them first. In Sehgal's case, the currency was stickers--a collection of adhesive cricket cards that had been painstakingly collected by his oldest brother, Lalit.
"One day the album disappeared," recalls Lalit, a retired nuclear physicist who has lived in Germany since the early 1970s. "He had traded off my album for another that was more to his liking. It made me quite furious."
The younger Sehgal was a popular, if mischievous, kid, and naturally inclined to sports. Yet he often struggled in school, and oddly, given his current profession, was particularly poor at mathematics. Lalit dispensed some after-school tutorials--and occasionally some corporal punishment when Sehgal failed to get the answers correct.
Sehgal was born in Lahore, in what is now Pakistan, in 1946, a little more than a year before India was partitioned by the British. His mother's family was considered part of the aristocracy, and his maternal grandfather was a senior magistrate. Sehgal's father, trained as an economist, worked for the government. The family fled Lahore when Rohit was an infant, placing him among what Salman Rushdie described as Midnight's Children. Leaving their possessions behind, the family headed for Shimla, near the Himalayas, where Sehgal's father was posted to help oversee village industries.
