Lehman hedge funds mostly up for May, down YTD

NEW YORK, July 3 Thu Jul 3, 2008 2:36pm EDT

NEW YORK, July 3 (Reuters) - Lehman Brothers' LEH.N LibertyView hedge funds posted mostly positive performance in May even as stock and bond markets suffered, but most still lost money for 2008, the firm said this week.

LibertyView, a $2 billion division of asset manager Neuberger Berman that Lehman purchased in 2003, posted gains of 1.4 percent in May in its Leverage Plus Fund, a $765 million fund that trades various equity and credit arbitrage strategies.

But the May performance still left the fund down 9 percent in the year-to-date through May after a first-quarter slump, according to July 1 investor notes obtained by Reuters.

A non-leveraged version of the same strategy called Plus Fund was up 0.74 percent in May, but since it wasn't leveraged, it was down only 2.62 percent in 2008.

A spokesman for Lehman declined to comment.

The 2008 first quarter was wrenching to hedge funds and the markets generally. The average hedge fund lost 2.7 percent in January and 2.2 percent in March, according to industry tracker Hedge Fund Research.

By May, things had improved, with the average hedge fund posting gains of 2.1 percent, according to HFR, leaving them essentially flat for the year through May.

LibertyView posted its best performance in its Convertible Arbitrage Fund, which was up 1.88 percent in May. However, the fund, which has $62 million, was still down nearly 3.6 percent year-to-date.

The worst performer was its $267 million Special Opportunities Fund, which was down 1.43 percent in May and down 8.53 percent year-to-date.

Elsewhere across the Lehman hedge fund sector, its Satori Technology Fund I, which invests in semiconductor, information technologies and other securities, was up 3.56 for May. But after a 12.7 percent loss in January, the fund was up only 1 percent for the year to date.

The following are performance figures for six LibertyView hedge funds and two other Lehman funds. Year-to-date is through the end of May.

- LibertyView Plus Fund ($765 mln): up 0.74 pct for May; down 2.62 pct YTD.

-LibertyView Leverage Plus (sister fund included in LibertyView Plus): up 1.39 pct for May; down 8.99 pct YTD.

-LibertyView Special Opportunities ($267 mln): down 1.43 pct for May, down 8.53 pct YTD.

-LibertyView Credit Opportunities ($506 mln): up 0.63 pct in May; down 3.57 pct YTD.

-LibertyView Credit Select ($260 mln): up 0.91 pct for May; down 3.48 pct YTD.

-LibertyView Convertible Arbitrage ($62 mln): up 1.88 pct for May; down 2.45 pct YTD.

-Satori Technology Fund ($118.3 mln): up 3.56 pct for May, up 1.01 pct YTD.

-Lehman Brothers GTAA Fund I ($213 mln): up 2.13 pct in May; up 0.59 pct YTD. (Reporting by Dane Hamilton; Editing by Gary Hill) (Reuters email: dane.hamilton@thomsonreuters.com. 646 223 6161)