Niederhoffer Flagship Loses Almost 10% In March

Apr 8 2011 | 3:53am ET

Add R.G. Niederhoffer Capital Management to the list of hedge funds hit hard by last month's massive earthquake and tsunami in Japan.

The firm's $368 million Diversified Program lost 9.8% in March, despite getting off to a strong start last month. But the March 11 disaster, which triggered the ongoing nuclear crisis at northern Japan's Fukushima power plant, changed everything, MarketWatch reports.

"We have had periods like this before in which exogenous negative or positive events have caught our strategy positioned incorrectly both during the event and afterwards," firm founder Roy Niederhoffer explained. "March was particularly disappointed, given our strong start to the month. Unfortunately, the vents at the Fukushima reactor in the two days following the tsunami and the subsequent three-week 'risk-on' rally that followed caused many parts of our strategy to incur significant losses."

The flagship's March losses come on top of a more modest 1.4% decline in February. As for last month, Niederhoffer says, it could have been worse.

"Luckily for investors, the [Standard & Poor's 500 Index] was dutifully resilient and rebounded strongly right off the March 16 low," he wrote in the Tuesday letter to investors. "However, a more sustained correction would have caused enormous losses for hedge fund investors."

"As one of the largest investors in our programs, I remain very confident in our strategy and our prospects," he added.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Scene Last Night: Clinton, Schwarzman, Corzine, Neidich, Diamond

Nov 25 2014 | 5:52pm ET

Steve Schwarzman had a granddaughter yesterday morning. Last night he sat one table...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.