It is always reassuring when hedge funds avoid big losses because they actually hedged. After all, they are “hedge” funds. But, of course, this is not always the case in market downturns. Just look at the number of funds that lost 30 percent, 40 percent, 50 percent in 2008.
However, at least four of the largest and most high-profile macro and multi-strategy managers did make money last month, when the global stock markets suffered their worst August in nine years.
Sources say Stevie Cohen’s SAC Capital, Ken Griffin’s Citadel Kensington and Citadel Wellington and Louis Bacon’s Moore Macro Managers funds were up 1 percent for the month. Moore Global Investments and Moore Remington were up between 1.3 percent and 1.4 percent for the month. OZ Master Fund — whose mission is to achieve consistent, positive absolute returns — was up 0.27 percent, according to a regulatory filing.
Cohen is said to have benefitted from his quantitative portfolio, even though it accounts for less than 20 percent of his assets, which stood at $12 billion at year-end. His long-short exposure was also said to be tight, but he benefitted from good stock-picking on both the long and short sides, according to investors.
All of Griffin’s strategies were said to be profitable, especially energy and convertible arbitrage.Year-to-date performance for this trio, however, is mixed.
SAC Capital is up 6 percent, Moore Macro Managers is up 4.4 percent, OZ Master 3 percent and Citadel’s funds 2 percent.
However, Moore Global Investments is still down 3.9 percent for the year while Moore Remington is off 4.9 percent.
Special situations/even driven funds have also fared well. One example: Polygon Europe Equity Opportunity fund was up slightly less than 1 percent in August and is up 15 percent for the year. It is said to be benefitting from the global pick-up in mergers and acquisitions activity.
Stephen Taub , who has covered the hedge fund industry for 30 years, is a contributing editor to Institutional Investor and Absolute Return-Alpha magazines.
