This content is from: Portfolio

The Morning Brief: Hedge Funds Fall in August, But do Better in September

More data trackers are reporting August hedge fund performance numbers, and not surprisingly, they don’t look good. The SS&P GlobeOp Index declined 1.09 percent in August, down 0.69 percent from July.  Meanwhile, hedge fund flows climbed by 0.64 percent in September, the firm found. The index is up by 6.22 percent for the year to date. SS&C GlobeOp says its index represents some 10 percent of the industry.

SS&C Technologies chairman and CEO Bill Stone said in a statement that both inflows and outflows of industry assets have been steady, despite the recent rough patch of performance. “Given the ongoing turmoil in global markets, this indicates that investors are confident the hedge fund industry can deliver attractive returns in times of increased volatility,” he said.
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Things are looking better for hedge funds in September so far, at least according to the latest weekly report from Lyxor Asset Management’s managed account platform research team. Hedge funds gained 0.6 percent last week, according to the Lyxor Hedge Fund Index, which is now up just 0.3 percent for the year. The best-performing sub-index is still long-short equity, up 1.6 percent YTD after returning 0.8 percent last week. The CTA sub-index returned 1.4 percent last week, with CTAS buoyed by long bond positions, but is still down by 2.4 percent this year.

Fed fund futures are indicating that the probability that that the Federal Reserve will hike interest rates this week for the first time since 2006 is just 28 percent — which means markets are not pricing in a rate hike. Lyxor says this will likely mean losses in equity markets and “a bear flattening of the yield curve,” according to its report. Still, the asset manager thinks the Fed will hold off this time and as a result is “eager to take some directional risks,” and has upgraded event driven strategies as a result.

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In perhaps the most frightening of the recent hedge fund ex files, Jericho Capital Asset Management chief Joshua Resnick’s ex-wife Nirit Varenbut threatened Resnick’s current wife, food writer Danyelle Freeman, with violence on Freeman’s Facebook page. Varenbut wrote, “I want to be the one who skins her alive,” referring to Freeman, according to the New York Post, citing court documents. Varenbut rented a home in the Hamptons this past summer to spy on Resnick and his wife, who have two children, according to the Post, which cites sources. Resnick and Varenbut split in 2012, after ten years of marriage. They have one child. Resnick and his current wife have taken out orders of protection against Varenbut, the Post reports. “This family has been victimized over and over again for far too long,” their lawyer, Robert Gottlieb, told the paper. “They have been forced to live in a constant state of fear of physical harm to their children and themselves.”

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