March 10, 2016 / 7:31 PM / 3 years ago

Hedge funds score tiny gains in February - HFR data

(This version of the story corrects last paragraph to reflect 10 percent gain is for 2016 not for 2015.)

NEW YORK (Reuters) - The average hedge fund posted tiny gains last month to beat the broader stock market index, according to new data released on Monday.

Even so, investors and analysts said many of the most prominent funds were nursing heavy losses for the month.

Research firm Hedge Fund Research’s (HFR) Hedge Fund Weighted Composite Index inched up 0.5 percent in February after having dropped 2.46 percent. It was down 2 percent for the year. The broader stock market, having been knocked by fears about growth in China and where interest rates will move next this year, lost 5.4 percent in the first two months of the year.

So called global marcro hedge funds that bet on currencies, interest rates and stocks, led performance in February, gaining 1.93 percent, HFR reported. Other strategies, however, were squarely in the red with activist investors who often pressure management to make changes losing 1.26 percent in February, leaving them off 6.57 percent for the year.

Some activists, including William Ackman’s Pershing Square Capital Management and Barry Rosenstein’s Jana Partners were nursing even bigger losses. Pershing Square lost roughly 19 percent while the Jana Nirvana fund was off 11 percent for the first two months of the year, both funds battered by a sharp drop in pharmaceutical company Valeant last month, investors in the funds said.

Even some of last year’s winners, including Jason Karp’s Tourbillion, are off this year. Tourbillon gained roughly 10 percent in 2015, and is now off roughly 10 percent, a person familiar with the numbers said.

John Burbank’s Passport Global Strategy fund, which gained roughly 10 percent last year, lost 5.7 percent in February, leaving it off 1.17 percent for the year, an investor said.

But there were winners as well. Renaissance Technologies LLC, one of the world’s most prominent hedge funds with roughly $27 billion in assets, has gained roughly 3 percent in February in its two portfolios that are available to outside investors. Both the Renaissance Institutional Diversified Alpha (RIDA) fund and the Renaissance Institutional Equities Fund (RIEF) gained roughly 10 percent this year after gaining roughly 16 percent last year, a person familiar with the numbers said.

Reporting by Svea Herbst-Bayliss and Lawrence Delevingne; Editing by David Gregorio

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