* Early reporting funds lost 0.34 pct on average in Oct
* Pine River, Third Point see multiple portfolios gain last
By Katya Wachtel
NEW YORK, Nov 6 Hedge funds lost money for the
first time since May last month, hurt by exposure to the broader
stock market, which also sank in October.
On average hedge funds fell 0.34 percent in October
according to a group of early-reporting managers to hedge fund
tracking firm eVestment|HFN, while the S&P500 fell 1.85 percent
during the month. Hedge funds are up about 2.8 percent for the
year, while the S&P500 has recorded gains of about 14.3 percent.
It was another positive month for credit-focused managers,
which rose 0.85 percent on average and have gained almost 10
percent this year. Many credit managers have made money this
year by betting on mortgage-backed securities and high-yield
"junk" bonds, which have broadly seen their value rise over the
past 10 months.
Pine River's Fixed Income Fund rose 2.32 percent through
Oct. 26, according to data from HSBC private bank. That almost
$3.5 billion fund is now up 31.55 percent for the year. A
smaller Liquid Mortgage Fund managed by Pine River is up more
than 28 percent for the year through Oct. 26.
Those early-reporting funds focused on investing in mortgage
related securities added more gains in October, leading to
yearly gains of almost 17 percent. Mortgage strategies have
recorded gains every month since November last year.
Early reporting equity-focused funds gained 0.45 percent in
October, though eVestment|HFN cautioned with the "broad-based
decline in developed equity markets during the month ... as more
equity strategies report, this figure will likely move lower."
Losing strategies in October included those that specialize
in investing in commodities and managed futures, "in step with
the extensive declines across the commodity price spectrum, and
with strength in the euro vs U.S. dollar," eVestment said in its
Among those funds that bet on stocks, those with large
exposure to the technology sector were battered as they lost
over 7 percent in the month, but stock-pickers got a boost if
they had large exposure to emerging markets and financials,
Daniel Loeb's flagship Offshore Fund gained 2.6 percent in
October according to a monthly investor note reviewed by
Reuters, pushing yearly returns to 13.8 percent.
The Third Point Ultra fund, which is a levered version of
the Offshore fund, added 3.8 percent in October according to
date from HSBC's private bank. That portfolio is now up more
than 22 percent for the year.