U.S. Markets

Some hedge funds deliver double-digit gains for 2017

BOSTON (Reuters) - A handful of hedge funds ended 2017 with double digit returns, their investors said, at a time the $3 trillion industry took in fresh money and posted its best returns in years, industry data show.

Activist hedge fund Marcato Capital Management, which waged proxy fights at Buffalo Wild Wings and Deckers Outdoor Corp. last year, ended 2017 with a 25.6 percent gain at its flagship fund while its smaller Encore portfolio climbed 22.6 percent.

Atlantic Investment Management, which focuses on bets that inexpensive stocks will appreciate in value, posted a 16.4 percent gain in its Cambrian Global Fund.

Both firms beat the industry average with industry tracking firm Hedge Fund Research reporting that the average hedge fund gained 7.6 percent through the end of November.

Stock oriented funds posted a 12 percent gain through November. December numbers have not been released as many hedge funds are still tabulating their performance for the year, but so far the industry is on track to post its best returns since 2013, the Hedge Fund Research data show.

Similarly Renaissance Technologies, staffed by nearly eight dozen scientists with doctorates in physics, math and other fields, posted a 15 percent gain in its Renaissance Institutional Equities fund, the firm’s oldest portfolio available to outsiders.

Brahman Capital posted a 12 percent gain in its hedge fund while a portfolio that makes only long bets that securities will rise climbed 22 percent.

Activist hedge fund Engaged Capital, which pushed for changes at tea maker Hain Celestial Group rental company Rent-A-Center last year, posted a 10.7 percent gain.

Hedge funds are private and generally guard their performance numbers closely. Representatives for the firms declined to comment.

The gains suggest better times in the hedge fund industry after investors spent years complaining about low returns and high fees. Investors even added $2.9 billion in new money to the industry in the first three quarters of 2017 after having pulled out $70 billion in 2016, data from Hedge Fund Research show.

Some firms even celebrated single-digit gains, signaling a rebound after a difficult 2016 or early 2017. Greenlight Capital, run by David Einhorn, ended the year with a 2 percent gain while Folger Hill, run by former SAC chief operating officer Sol Kumin, ended the year with a 2.6 percent gain in its U.S. fund and a 3.6 percent gain in its Asia fund.

Reporting by Svea Herbst-Bayliss; Editing by Susan Thomas