Daniel Loeb’s Third Point Offshore, managed by New York-based Third Point, trimmed its net long exposure on its long-short portfolio to 62.7 percent at the end of August from 66.6 percent the previous month, according to its brief monthly snapshot. Even so, its net exposure is still much higher than the vast majority of long-short funds heading into the third quarter. The one-page report also shows that the sometime-activist fund was hurt by this relatively bullish stance, losing 5.2 percent in August and knocking down its gain for the year to a measly 0.1 percent. The fund lost 6.2 percent on its longs but only made 0.7 percent on its shorts in the long-short portfolio. The credit portfolio eked out a 0.1 percent gain from its long book and a 0.2 percent profit from its short book.
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Another major executive is departing Greenwich, Connecticut-based Viking Global Investors. Chief Financial Officer Barrett Brown is leaving the firm founded by O. Andreas Halvorsen to spend more time with his family, according to Reuters, citing a person briefed on the situation. The firm is seeking a replacement. Earlier this year, Thomas Purcell, the onetime co-chief investment officer of Viking, left the firm following a six-month sabbatical.
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Greenlight Capital’s poor results so far this year are now negatively impacting its insurer, Greenlight Capital Re. On Wednesday, UBS cut its price target for the stock of the Cayman Islands-based reinsurer, to $34 from $37, citing “the lower investment returns” in the third quarter, which it asserts, “in turn, lowers our estimate of total assets available for investment in future years.” This led UBS to reduce its earnings estimates for 2015 and 2016. However, it did retain its Buy rating on the stock. New York-based Greenlight, which manages Greenlight Capital Re’s investment portfolio, posted a 5.3 percent loss in August and is now down nearly 16 percent over the past three months alone.
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In the first look at industry-wide hedge fund performance, The Credit Suisse LAB Index declined by 2.23 percent in August. It is now essentially flat for the year. The Merger Arbitrage strategy was the best performer last month, dropping just 0.43 percent, and is also flat for the year. The Long/Short Equity strategy lost 1.31 percent last month but it is the top performer year-to-date, up 4.22 percent. The LAB series of indices seek to provide exposure to the risk and return characteristics of hedge fund strategies using liquid, tradable instruments.
