Stock Slide Sees Hedge Fund Giants Sink

Aug 2 2007 | 8:21am ET

The fear and loathing—and hedge fund collapses—surrounding the sub-prime mortgage market have occupied much of the industry’s attention, but the declining equities market also put the hurt on hedge funds during the month of July.

The losers include some of the biggest names in the industry. Tudor Investment Corp.’s $8.9 billion Raptor Fund was battered by plunging stock prices, falling by 9% last month through July 27; it is down 2.9% year-to-date after the decline. The Greenwich, Conn.-based firm’s flagship fund, the $10.3 billion Tudor BVI Fund, didn’t escape unscathed, either: It fell 3.1% on the month, though it is still up 4.6% on the year. The Man Group, the world’s largest publicly-listed hedge fund manager, saw its flagship AHL strategy lose 6.7% last week, Financial News reports. And Greenwich-based SAC Capital’s main fund fell 1% last month, but its year-to-date return remains a healthy 14%.

The news on those giants comes as the $11 billion New York hedge fund manager Caxton Associates felt compelled to send a letter to investors denying rumors that it was in serious peril of collapsing. Its flagship did fall by 3% in July, but is still up more than 3% on the year.

Others, meanwhile, are laughing all the way to the bank on the sub-prime mortgage market fiasco. New York-based Harbinger Capital Partners returned a whopping 17% last month, and is up better than 40% year-to-date, thanks to its bets against sub-prime mortgages. Citadel Investment Group, most recently seen picking clean the corpse of collapsed Boston hedge fund Sowood Capital Management, was flat last month, and is up 17% year-to-date.


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