Varus Fund Wins In June, Brings YTD Gains To 16%

Jul 14 2011 | 11:18am ET

The Varus fund, a Swiss-based long/short hedge fund specializing in German mid and large-cap companies, is up almost 16% YTD, having added over 1% in June.

The fund’s Class A Euro shares returned 1.11% in June, 15.8% YTD and 41.6% since inception. The fund’s share class for U.S. clients returned 1.48% in June, 20.4% YTD and 49.3% since inception. The fund was launched in September 2009.

Zurich-based Varus Capital Management, which runs the long/short vehicle, said its two best investments in June—a month during which the average hedge fund was down 1.59%, according to Hedge Fund Research—were European shorts in the French cement maker Lafarge, which lost 8.4% and the Swiss chemicals and biotech company Lonza, which turned in the worst performance on the Swiss Swiss Market Index for the month, losing 9.9%.

The fund, in its monthly statement, notes that European shares have experienced eight straight weeks of losses—the longest losing streak since 1998. “June has been a very good month for us to demonstrate our risk management skills in highly volatile markets like in 2008 and many very weak months since the launch of Varus Fund (May and August 2010 plus May 2011 were positive months for the fund).”

Varus, which secured its first U.S. investor—an unnamed Connecticut-based fund of funds—in January of this year, announced in April it was seeking a strategic partner to bring its assets under management from US$20 million, where they stood as of May 2011, to over US$50 million.

Asked for an update, Stefan Heieck, co-founder of the fund, told FINalternatives they had closed one investment with a "larger" family office and were at work on three larger due diligences which could increase the fund's AUM to "EUR 50-100 million."

"Good things come to those who can wait I learned once," said Heieck, "But not to those who wait too long - that is why we are seeing rising interest from additional investors to monitor the fund besides the current due diligences."


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