SkyBridge Flagship Soars 17.4% In '10

Feb 25 2011 | 10:11am ET

Buying three alternative investments business from Citigroup was only part of SkyBridge Capital's big 2010. The firm's flagship fund of hedge funds returned in excess of 17% last year, easily besting both the average returns for hedge funds and funds of funds, as well as that of the broader stock market.

The Multi-Adviser Hedge Fund Portfolio's 17.4% jump last year made it one of a very small handful of funds of funds to top the Standard & Poor's 500 Index's 15% return. The fund enjoyed positive returns in all but two months last year, and racked up gains up 3.82%, 2.85%, 1.39% and 2.14% over the last four months of the year. In the fourth quarter alone, the fund was up 6.4%.

SkyBridge credited its bets on hedge funds investing in mortgage-backed securities.

"The biggest profit generator in the Series G Portfolio continued to be the agency and non-agency prime mortgage-backed securities exposure," the firm wrote in an investor letter obtained by FINalternatives. "However, in the fourth quarter, this was a function of both position sizing and absolute performance in that the portfolio's event-driven equity and distressed exposures performed slightly better than the portfolio's average MBS manager exposure."

Those bets should continue to do well this year, SkyBridge wrote. It said half of its mortgage exposure is to agency bonds, with the rest in jumbo MBS and subprime investments.


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