The Good: Och-Ziff, Asian Volatility Funds

Aug 10 2011 | 12:23pm ET

Not every hedge fund manager is weeping over the market rout that has taken hold of global stocks this month. Some are doing quite well by it.

Among the larger funds not joining the summer swoon is Och-Ziff Capital Management. The New York-based firm, which manages some $30 billion, rose 1% last week, Bloomberg News reports.

The firm's flagship macro fund is up 1.2% this year. Och-Ziff gobbled up billions in options during the first quarter, which has helped it ride out, and even profit, from the volatile markets.

On the other side of the world, things look even better. Singapore-based Vulpes Investment Management, founded by former Artradis Capital Management chief Stephen Diggle in May, is riding out its first market crisis nicely, adding 4% in the first six trading days of the month, Reuters reports. Fellow Asian hedge fund Tantallon Capital did as well or better, rising 4.15% last week.

"Everyone is just trying to reduce their exposure to equities principally in a very thin August market and that has caused very significant volatility," Diggle, who specializes in volatility arbitrage, told Reuters. "We are basically long risk and that's going higher."

Vulpes and Tantallon are not alone in the region: Macquarie Group's Asian Alpha Fund added 0.4% last week.

Other top hedge funds have had to settle for not losing ground this month. Citadel Investment Group's flagship Kensington and Wellington funds are little changed this month, according to Bloomberg, which JAT Capital Management is also roughly flat. Both firms are no doubt breathing a sigh of relief that August's troubles haven't put a dent in their impressive returns for the year; JAT is up 32% and Citadel's fund 14%.


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