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Morning Brief: Healthcare, Energy Drive Hedge Funds Gains in September

The HFRI Fund Weighted Composite Index rose 0.5 percent last month, increasing year-to-date gains to 5.7 percent.

  • By Stephen Taub

Hedge funds posted their eleventh straight monthly gain in September as measured by the HFRI Fund Weighted Composite Index, which rose 0.5 percent for the month for a year-to-date gain of 5.7 percent. HFR said in a statement October 6 that healthcare, energy and activist strategies led last month’s performance. “Realized volatility remained muted and equities gained, with asset-specific volatility concentrated in the currency and commodity markets,” Kenneth Heinz, president of HFR, said in the statement, pointing to the U.S. dollar, British Pound Sterling and oil. “While expectations for successful tax reform legislation have contributed to recent optimism, many managers are positioning for a continuum of scenarios related to this, which is likely to drive strong industry performance and growth into 2018,” he said.

While hedge funds broadly were up last month, not all strategies posted gains. The HFRI Macro (Total) Index, for example, lost 1.2 percent in September and is now down 0.53 percent for the year. HFR’s two relative value indexes are up a little more than 4 percent this year.

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Elliott Associates disclosed in a regulatory filing that it owned 7.14 million shares of Mitel Networks Corp. on October 3, or a 6 percent stake in the business communications and collaboration software company. However, this is not an activist position. The hedge fund firm disclosed the position in a 13G filing, meaning the investment is passive. Of course, this status could change in the future. In its 13F filing disclosing June 30 U.S. stock holdings, Elliott reported owning more than 12 million shares of Mitel.

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Tiger Global Management said in a filing that as of September 28 the hedge fund owned 1.5 million shares of Roku, or 9.6 percent of the company. Shares of the video streaming company rose 5.4 percent on October 6 to $23.20, up about 65 percent since Roku went public in late September.

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Luxor Capital Group more than tripled its stake in Golar LNG to 5.63 million shares, for 5.5 percent of the total outstanding shares of the liquefied natural gas shipping company, according to a regulatory filing.

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