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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note