Varus Fund Adds 3.06% In July

Aug 10 2012 | 1:29pm ET

The Varus Fund, a Swiss-based long/short hedge fund specializing in German mid and large-cap companies, is up 3.06% in July.

That puts the fund down 6.04% year to date and up 38.6% since inception.

In their monthly letter to clients, Varus founders (and Absolute Capital Management veterans) Stefan Heieck and Frank Siebrecht characterize the July numbers as “an excellent risk-adjusted July result with minus 6.2% average net exposure.”

“We bought Siemens into their weak Q2 figures on 26 July 2012 in anticipation of a special dividend later this year. The Siemens shares increased by 15% supported by their surprise share buyback announcement vs. bond placement—don`t worry, be happy if you are able to buy Germany`s largest company with a market cap of EUR 68 billion at the right time of the year.”

In H2, the managers say, they expect to profit from short bonds versus high-yield and share buyback stocks, citing companies like Adecco and Siemens which have already issued bonds to finance buybacks of their own shares and listing a number of others (including Adidas and Software AG) which they believe may follow suit.

 

 


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