Nimble, Liquid Hedge Fund Strategies Up In Early Days Of August

Aug 11 2011 | 12:37pm ET

While many big name global macro hedge fund managers have been getting slammed in the first few weeks of August, the market volatility has been good to some smaller, more nimble players.

R.G. Neiderhoffer Capital Management has seen its Diversified Program gain 16% month-to-date (through August 10) while its Negative Correlation Program has surged 27.9%. The gains mean that  Diversified—which has $361 in assets under management—is now flat for the year, while Negative Correlation, with $23 million in AUM, is now up 9% year-to-date.

“The debt crisis which has driven markets to extremes since late July has provided extraordinary opportunities for our strategy,” Roy Niederhoffer wrote today in a letter to investors obtained by FINalterntives. “Volatility has increased dramatically across all sectors, particularly equities, and our models have been extremely accurate.”

R.G. Neiderhoffer’s two other programs, Trend Hedge (AUM $23 million) and Optimal Alpha (AUM $10 million), are up 4.9% and 10.9%, respectively, thus far in August, but they are both still in negative territory for the year. 

Lyford Group, which manages a discretionary macro strategy emphasizing tactical short-term trading, is up 2.25% in the first weeks of August.

According to Daniel Solomon, chief operating officer of Lyford, the S&P’s downgrade of U.S. debt and the subsequent roller coaster ride in the markets has not affected the firm’s operations.

“We trade futures contracts. Our margin to equity is well under 10% and it is a liquid, nimble, tactical strategy,” said Solomon. The firm—which has $82 million in assets under management—has gained 8% in the May-August period (through Aug. 10).

John W. Henry and Company has also seen its fortunes rise in August, with the firm’s various programs gaining between 4-6% in the first weeks of the month, according to a source close to the firm.

The gains follow a good July for JWH, which saw its Diversified Plus program up 6.2% for the month and its GlobalAnalytics program gain 9.6% over the same period.  JWH has approximately $301 million in assets under management.


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