Had October ended a week sooner, hedge fund manager Ken Tropin would have had much a tougher letter to write to his investors.
Instead, the founder of $7.4 billion Graham Capital Management LP narrowed an 8.8 percent decline for the month through October to 3.5 percent in its macro discretionary fund, according to a person with knowledge of the returns.
The fund then gained 2.1 percent in the first 11 days of November, bringing 2014 gains to 4.5 percent, according to an investor document obtained by Bloomberg News.
Graham’s turnaround isn’t unique after equity and debt markets rebounded in the second half of October and volatility slumped after spiking. U.S. stocks have risen to a record on better-than-expected earnings and increased confidence the world’s largest economy can weather a global slowdown.
The Topix (TPX) index has soared 19 percent since Oct. 17, boosted by the Bank of Japan unexpectedly increasing its target for monetary stimulus and measures of credit risk have diminished.
Commonwealth Opportunity Capital’s main hedge fund lost 1.2 percent last month through Oct. 17, according to a document. By the end of October, it had gained 0.8 percent after wagering Japanese stocks would rise, said a person with knowledge of the matter, who asked not to be named because the details are private.
Commonwealth, based in Los Angeles, is run by Adam Fisher and Reagan Silber and managed $2.8 billion as of Sept. 30, according to a filing with the U.S. Securities and Exchange Commission.
Fortress Recovery
Adam Levinson, who runs the Fortress Asia Macro Fund, reduced monthly losses of as much as 4.7 percent during October, according to a document. The fund ended the month down 1.1 percent, bringing losses in 2014 to 5.2 percent. Spokesmen for the firms declined to comment on the returns.
A Fortress Investment Group LLC (FIG) spokesman, didn’t immediately return calls. Macro funds, such as Levinson’s that can trade a range of assets to profit from macroeconomic trends, still had their worst month in more than a year, declining 1.1 percent, according to data compiled by Bloomberg. The strategy has gained about 1 percent this year.
Fund Returns
The average hedge fund fell 0.3 percent in October, according to data compiled by Bloomberg, paring this year’s advance to 2 percent. Hedge funds that use computer models to invest across assets based on macro themes rose 0.5 percent last month and are up 5.3 percent this year, according to data compiled by Chicago-based Hedge Fund Research Inc.
Graham’s largest systematic fund had gained 0.1 percent last month through Oct. 28, the investor document showed. By Oct. 31, it had returned 4 percent, more than doubling its gains for the year, the person briefed on its performance said. Through Nov. 11, the systematic fund climbed 9.2 percent year-to-date, according to the client document.
Renaissance Technologies LLC, the $25 billion computer-driven investment firm founded by Jim Simons, was among October’s strongest performers, gaining 6.4 percent in its Renaissance Institutional Equities Fund, according to a person briefed on the matter. That pushed investor gains to 9.4 percent year-to-date.
The East Setauket, New York-based firm’s Institutional Diversified Alpha Fund rose 4.6 percent for the month, an investor document showed, while the Institutional Futures Fund lost 0.5 percent.
Quant Strategies
Quantitative strategies “have continued to post gains when risk sentiment improved, as they benefit from the resiliency of the bond market,” Philippe Ferreira, the head of research for Lyxor Asset Management Inc.’s managed-account platform, said in a Nov. 3 note. Some credit and event-driven managers failed to rebound in October.
Claren Road Asset Management LLC lost 9.7 percent in its $4.8 billion Credit Master Fund and is down 9.1 percent for the year. Billionaire John Paulson posted a 14 percent loss in his firm’s event-driven hedge fund during October, adding to declines this year, two people with knowledge of the matter said.
The monthly drop left the Paulson Advantage fund down about 25 percent in 2014, said the people, who asked not to be identified because the information is private.
A sharp spike in volatility “like we saw in the first half of October is tough to navigate because indiscriminate selling is often associated with that sort of move,” Adam Taback, head of alternative investments at Wells Fargo & Co., said in an e-mail.
Forced selling of securities, particularly stocks, pre-empted some managers from riding markets higher as volatility dimmed, while “other mangers weathered the storm and generally rode out the volatility.”
bloomberg.com
Instead, the founder of $7.4 billion Graham Capital Management LP narrowed an 8.8 percent decline for the month through October to 3.5 percent in its macro discretionary fund, according to a person with knowledge of the returns.
The fund then gained 2.1 percent in the first 11 days of November, bringing 2014 gains to 4.5 percent, according to an investor document obtained by Bloomberg News.
Graham’s turnaround isn’t unique after equity and debt markets rebounded in the second half of October and volatility slumped after spiking. U.S. stocks have risen to a record on better-than-expected earnings and increased confidence the world’s largest economy can weather a global slowdown.
The Topix (TPX) index has soared 19 percent since Oct. 17, boosted by the Bank of Japan unexpectedly increasing its target for monetary stimulus and measures of credit risk have diminished.
Commonwealth Opportunity Capital’s main hedge fund lost 1.2 percent last month through Oct. 17, according to a document. By the end of October, it had gained 0.8 percent after wagering Japanese stocks would rise, said a person with knowledge of the matter, who asked not to be named because the details are private.
Commonwealth, based in Los Angeles, is run by Adam Fisher and Reagan Silber and managed $2.8 billion as of Sept. 30, according to a filing with the U.S. Securities and Exchange Commission.
Fortress Recovery
Adam Levinson, who runs the Fortress Asia Macro Fund, reduced monthly losses of as much as 4.7 percent during October, according to a document. The fund ended the month down 1.1 percent, bringing losses in 2014 to 5.2 percent. Spokesmen for the firms declined to comment on the returns.
A Fortress Investment Group LLC (FIG) spokesman, didn’t immediately return calls. Macro funds, such as Levinson’s that can trade a range of assets to profit from macroeconomic trends, still had their worst month in more than a year, declining 1.1 percent, according to data compiled by Bloomberg. The strategy has gained about 1 percent this year.
Fund Returns
The average hedge fund fell 0.3 percent in October, according to data compiled by Bloomberg, paring this year’s advance to 2 percent. Hedge funds that use computer models to invest across assets based on macro themes rose 0.5 percent last month and are up 5.3 percent this year, according to data compiled by Chicago-based Hedge Fund Research Inc.
Graham’s largest systematic fund had gained 0.1 percent last month through Oct. 28, the investor document showed. By Oct. 31, it had returned 4 percent, more than doubling its gains for the year, the person briefed on its performance said. Through Nov. 11, the systematic fund climbed 9.2 percent year-to-date, according to the client document.
Renaissance Technologies LLC, the $25 billion computer-driven investment firm founded by Jim Simons, was among October’s strongest performers, gaining 6.4 percent in its Renaissance Institutional Equities Fund, according to a person briefed on the matter. That pushed investor gains to 9.4 percent year-to-date.
The East Setauket, New York-based firm’s Institutional Diversified Alpha Fund rose 4.6 percent for the month, an investor document showed, while the Institutional Futures Fund lost 0.5 percent.
Quant Strategies
Quantitative strategies “have continued to post gains when risk sentiment improved, as they benefit from the resiliency of the bond market,” Philippe Ferreira, the head of research for Lyxor Asset Management Inc.’s managed-account platform, said in a Nov. 3 note. Some credit and event-driven managers failed to rebound in October.
Claren Road Asset Management LLC lost 9.7 percent in its $4.8 billion Credit Master Fund and is down 9.1 percent for the year. Billionaire John Paulson posted a 14 percent loss in his firm’s event-driven hedge fund during October, adding to declines this year, two people with knowledge of the matter said.
The monthly drop left the Paulson Advantage fund down about 25 percent in 2014, said the people, who asked not to be identified because the information is private.
A sharp spike in volatility “like we saw in the first half of October is tough to navigate because indiscriminate selling is often associated with that sort of move,” Adam Taback, head of alternative investments at Wells Fargo & Co., said in an e-mail.
Forced selling of securities, particularly stocks, pre-empted some managers from riding markets higher as volatility dimmed, while “other mangers weathered the storm and generally rode out the volatility.”
bloomberg.com
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