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Big Name Hedge Funds Struggle While Markets Surge

Plenty of the biggest names in hedge funds have failed to take advantage of the markets lately.

Several of the biggest names in the hedge fund world are losing money this year despite the double-digit returns being generated by most of the widely followed indexes.

Of course, there is John Paulson, who has at least two funds that are down by double digits through July.

As we have reported earlier, many of the funds of Sloane Robinson continue to struggle this year. For example, one of the classes of the Sloane Robinson Global Fund is down more than 13 percent through August 22. Another offering was off by more than 4 percent.

The macro funds are also continuing to struggle.

For example, Caxton Global Investment, headed by Andrew Law — who at the beginning of the year took over the firm founded by Bruce Kovner — was down 3.4 percent through August 28. It is not clear how the macro manager is positioned at this time.

Comac Global Macro Fund, a $4 billion London-based fund headed by Colm O’Shea, was down 5.9 percent through August 24. The firm describes the fund as a discretionary global macro hedge fund that focuses on directional market movements that commonly have a strong fundamental reasoning based upon economic and political analysis. The firm, founded by Soros alum O’Shea in December 2005, earned its reputation in 2008 when it generated a 30 percent return. Earlier this year, the Ohio Public Employees Retirement System reportedly invested $120 million in the fund.

David Harding’s Winton Futures Fund, a $7.5 billion systematic global fund, was off nearly 2 percent through the end of August.

Tail risk funds have also been badly hurt this year. These funds — which are costly — are generally designed as insurance for imploding markets. Instead, these funds are tanking this year.

For example, the $2.4 billion Capula Tail Risk fund was off 9.4 percent on August 24. According to the firm, the fund invests in a range of instruments primarily in G7 markets. It targets superior returns in times of liquidity and systemic crises, while minimizing downside during normal market conditions.

Meanwhile, Greg Coffey continues to struggle. His $450 million Moore Emerging Equity Fund was down about 13.7 percent at mid-August.

Coffey is the former GLG Partners star who left hundreds of millions of dollars on the table when he bolted from the firm a few years ago to start his own firm, which never materialized.

Also, Elm Ridge Value Partners Offshore, run by Ronald Gutfleish, was down by more than 10 percent through the end of July. Gutfleish is the one who, along with his wife Stacey Sorrow, bought Brooke Astor’s 65-acre Westchester County estate late last year for $6.45 million, half the reported listing price.

Several funds are down a little less than 1 percent this year. They include Brevan Howard’s BH Macro fund and the $4 billion Saba Capital Offshore fund, the master fund run by long-short credit specialist Boaz Weinstein of Saba Capital Management.

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