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The Morning Brief: HFR Composite Slipped 1.7 Percent in January Rout

Hedge Fund Research’s Weighted Composite Index posted a 1.7 percent loss in January while the Chicago firm’s Asset Weighted Composite Index fell 1.2 percent. Doesn’t sound too bad, especially given that the Standard & Poor’s 500 index was down 5 percent for the month. Of course, many of the hedge fund firms in the composite don’t use the HFR Composite as a benchmark because they’re not just stock funds. The HFRI Equity Hedge (Total) Index, however, fell 3.7 percent, the worst monthly performance since May 2012. The worst performers among the HFR benchmarks were the emerging Asia and Middle East indices, which fell 7.3 percent and 6.8 percent, respectively. The best performers were macro funds, which posted a gain of 1.5 percent for the month while the HFRX Macro: Systematic Diversified CTA Index was up 2.6 percent. “The four-year global equity bull market ended in the latter half of 2015 and financial markets are currently progressing through a cyclical transition period, which is likely to be defined by continued volatility, diverging regional economic cycles and increased opportunities in sophisticated, tactical, hedged strategies,” said HFR president Kenneth Heinz in a press release. “Hedge funds, which have demonstrated their ability to preserve capital and generate uncorrelated gains through this environment, will serve to reduce overall portfolio volatility and will continue to attract investor capital into early 2016.”


While the composite indices didn’t fare too badly, January performance is looking downright ugly for some as more and more firms report. For example, according to HSBC’s latest report, Larry Robbins’ New York-based Glenview Capital Partners fell more than 13 percent, Richard “Mick” McGuire III’s San Francisco-based Marcato International was off 12 percent while Leon Cooperman’s New York-based Omega Overseas was down nearly 10 percent.


On the other hand, John Burbank III’s San Francisco-based Passport Special Opportunities fund was up 16 percent, Russell Clark’s London-based Horseman Global fund rose 8 percent and Jim Simons’s East Setauket, New York-based Renaissance Institutional Equities Fund rose nearly 7 percent.


Omega Advisors’ Leon Cooperman disclosed he owned 7.7 percent of the shares of Loral Space & Communications, the satellite communications company, as of December 31. In the past two days, he has filed separate 13Gs indicating he owned more than 5 percent of seven stocks as of December 31. These holdings will also show up in his quarterly 13F filing, due no later than February 16.

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