Ainslie's Maverick Cap backfires in August

Tue Sep 13, 2011 1:26pm EDT

* Maverick ranks among industry's losers in August

* A Maverick levered fund falls 23 pct

* Chinese Internet company Youku.com Inc hurt returns

By Katya Wachtel and Svea Herbst-Bayliss

NEW YORK, Sept 13 (Reuters) - Maverick Capital's Lee Ainslie took a bath last month when his flagship hedge fund racked up a double-digit loss, pushing it solidly into the red for the year, said two people familiar with the results.

A smaller more aggressive portfolio performed even worse, losing 23 percent in August, these people said.

Ainslie, who oversees about $10 billion, is one of the better-known tech investors in the $2 trillion hedge fund industry. His poor performance in August ranks alongside the downbeat numbers turned in by another hedge fund giant, John Paulson manager of Paulson & Co. [ID:nN1E7771XM]

Maverick's flagship fund tumbled 11 percent last month, and is now down about 10 percent for the year, the two people familiar with the numbers said.

Ainslie's spokesman declined to comment.

While August was a bad month for the stock markets and most hedge funds, the hefty losses racked up by Ainslie, Paulson and other prominent names represent a real blow to those managers' reputations as savvy investors.

"These marquee names have attracted a lot of institutional money in the last years but in light of these numbers, it is possible that big investors are going to look downstream for new names," said Doug McGregor, who owns Hampton Hedge Fund Marketing, which helps hedge funds find investors.

Judging by his sharp losses, Ainslie was badly battered by the market's sharp sell off at the start of August. Many other hedge fund managers were able to pare losses -- the average fund lost 2.3 percent, according to Hedge Fund Research.

Chinese Internet company Youku.com (YOKU.N), which is down 41 percent his year, was a prominent loser last month for Ainslie. Regulatory filings show that Maverick owned 7.7 percent of the company at the end of the second quarter, making him the largest institutional owner.

Similarly, solar energy company First Solar (FSLR.O), which has lost 34 percent this year, and Citigroup (C.N), which declined 43 percent this year, inflicted damage.

Since launching Maverick Capital in 1993, Ainslie, one of a handful of managers mentored by industry titan Julian Robertson, delighted small endowments and wealthy clients with strong numbers.

The Maverick Fund Ltd, listed in HSBC's private bank hedge fund listings, has returned an average 12.3 percent per year since 1995. That fund is down 12.28 percent this year, according to HSBC.

Ainslie has been a big draw as a featured speaker at many of the industry's most prominent conferences this year, including the Skybridge Alternatives Conference.

Traditionally Ainslie has focused heavily on technology, media and telecom, industrials , healthcare, financials and consumer stocks.

The Maverick losses are big but not the industry's biggest. Paulson, who oversees about three times as much money as Ainslie, has lost 35 percent this year in his biggest fund, investors with him said. [ID:nN1E7731FP] (Reporting by Svea Herbst-Bayliss and Katya Wachtel, edited by Matthew Goldstein and Tim Dobbyn)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.