Metacapital Tops Bloomberg Hedge Fund Performance List

Jan 4 2013 | 1:22pm ET

Metacapital Management's Mortgage Opportunities Fund was the best-performing hedge fund of the year on Halloween, according to Bloomberg Markets' annual ranking of the world's richest hedge funds.

The $1.5 billion hedge fund, helmed by Deepak Narula, was up 37.8% through Oct. 31, topping its 23.6% return from 2011. Narula has invested heavily in agency mortgages; he's returned 520% to investors since he launched the fund four-and-a-half years ago.

Metacapital's success is something of a harbinger for the rest of the list of the 100 best-performing hedge funds of the year through October. Two other top-five hedge funds engage in mortgage-backed arbitrage, both from Pine River Capital Management: It's $3.6 billion Fixed-Income Fund placed second with a 32.9% return and its $1.1 billion Liquid Mortgage Fund fourth at 28%. Both funds are run by Steve Kuhn.

CQS's Directional Opportunities Fund was third at 28.9% and Odey Asset Management's European Fund fifth at 24.1%. Both of those funds suffered double-digit losses in 2011.

Marathon Asset Management's Securities Credit Fund and Appaloosa Management's Palomino Fund followed with 24% returns. BTG Pactual Global Asset Management's GEMM Fund was eighth at 23.1%, Third Point's Ultra Fund ninth at 22.1% and Omega Advisors' Overseas Partners A fund 10th at 21.7%.

Seer Capital Management returned 21.6%, Tiger Global Management 21%, Eminence Capital 20.9%, Jana Partners' Master Fund 20.4%, Structured Portfolio Management's Structured Servicing Holdings Fund 20.3%, Citadel Investment Group's Tactical Trading Fund 20%, Viking Global Investors' Long Fund 19.4%, Cerberus Capital Management's RMBS Opportunities Fund 19%, and LibreMax Capital and Pine River's eponymous fund each 18.5%.

Other notable names included Man Group's AHL Evolution and Citadel's Kensington and Wellington funds, tied at 22nd with an 18% return, DoubleLine Capital's Opportunistic Income Fund at 26th with a 17.4% return, D.E. Shaw Group's Heliant Fund at 29th with a 16.8% return, Maverick Capital Management at 31st with a 16% return, Fortress Investment Group's Drawbridge Special Opportunities Fund at 37th with a 15.1% return, Bridgewater Associates' All Weather Fund at 43rd with a 14% return, Fortress' Macro Fund at 59th with a 12.5% return, Greenlight Capital at 65th with an 11.4% return, Elliott Associates at 74th with a 10.6% return, Paulson & Co.'s Enhanced fund at 76th with a 10.5% return, Avenue Capital Group's International Fund and SAC Capital Advisors' International Fund tied at 86th with 10% returns, and Och-Ziff Capital Management's flagship OZ Master Fund at 93rd with a 9.5% return.

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