December 5, 2008 / 9:56 AM / 11 years ago

Hedge funds chalk up more losses, big names suffer

BOSTON (Reuters) - Some of the biggest names in hedge funds lost money in November, including Dan Loeb and Kenneth Griffin, but John Paulson was among the few who made money for their investors.

Hedge fund investors around the world lost money for the sixth straight month as many in the industry reported steepening declines, investors said on Thursday.

Dan Loeb, an activist investor known for his sharply worded letters to poorly performing companies, told investors that his Third Point Offshore fund lost 28.24 percent in the first 11 months of the year after the fund slipped 2.6 percent in November.

James Pallotta’s Raptor Global Fund lost 1.51 percent last month, leaving the fund off 17.36 percent for the year.

Martin Hughes’ Tosca Fund Ltd fell 5.15 percent and is now down 67.54 percent for the year.

And Kenneth Griffin’s Citadel Investment Group, which boasts one of the industry’s longest winning records, lost roughly 13 percent last month, swelling its year-to-date losses to about 47 percent, investors said.

The numbers came as investors suffered through more sharp stock market gains and losses that left many managers ill-prepared, if they were long or short, investors said.

Funds also felt the impact of frozen credit markets.

While many hedge fund managers are still compiling their numbers for the month, early indications show the average fund lost 2.25 percent, leaving it down 21.31 percent for the year, according to data from data tracking company BarclayHedge.

Groups that monitor performance like Hedge Fund Research and Hennessee Group are expected to announce November returns in a few days.

Fed up with the industry’s worst-ever returns, endowments, pension funds and private investors demanded more money back, which forced even more selling among hedge funds, managers said. In October, industry assets shriveled 9 percent to $1.5 trillion, their lowest level in two years, according to data from Hedge Fund Research. Data for November is not available yet.

“Money is coming out of the system, and people are redeeming because they need the money,” said Antonio Munoz, who runs EIM Management USA, a fund of hedge funds.

While many fund managers are nursing heavy losses there are also a few bright spots.

Fund manager John Paulson, one of the first investors to bet that housing prices could decline on a national basis, made more money for his investors in November when his roughly $5 billion Advantage Ltd fund gained 2.04 percent. That leaves the fund up roughly 21 percent since January, according to an investor.

Paulson’s roughly $10 billion (6.8 billion pound) Advantage Plus Ltd fund rose 3.19 percent in November and is now up 33.52 percent year-to-date.

Louis Bacon’s Moore Global Investment Fund gained 3.74 percent through November 26, leaving the fund down only 4.76 percent for the year so far.

And Bruce Kovner’s Caxton Global Investment fund is up 11.52 percent for the year.

Editing by Phil Berlowitz

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