August Takes Its Toll On Big-Name Hedge Funds

Sep 10 2007 | 1:43pm ET

The first two weeks of August were awful to hedge funds. The rest of the month, as it turns out, wasn’t much better.

Hedge funds fell 1.31% last month, according to Hedge Fund Research, their worst monthly performance in more than a year, and this first month in the red in 2007. Separately, the Hennessee Group reported that hedge funds fell 0.7% on the month. On the bright side, it noted that hedge funds remain up 8.3% year-to-date.

"Hedge fund performance volatility increased at the end of July and has persisted into September," Kenneth Heinz, president of HFR, said. His numbers show emerging markets funds, a top performer in 2007, pacing August losses with a 2.5% decline, followed by macro funds with a 2% drop and high-yield falling 1.97%.

The volatile equities market and continued credit market problems plagued an all-star list of hedge funds last month. In fact, the only funds that seemed to enjoy a modicum of success in August were the quantitative funds that suffered the most in its opening days.

Tudor Investment Corp.’s $6 billion BVI Global Fund fell 5.5% last month and is down 1.5% year to date. The Greenwich, Conn.-based firm’s $6 billion Raptor Fund also dropped 5.6% in August, and is down 9% year-to-date, the Financial Times reports.

Other big losers include Caxton Associates, whose $11 billion flagship shed 4.8% last month and is down 1.5% in 2007.  Tewskbury Capital Management’s $3 billion fund fell 8% and is flat year-to-date.

Moore Capital’s $7 billion Global Fund dropped 5.7% on the month, while its Fixed Income Fund fell 4.3%. According to the FT, both remain in the black year-to-date. The same is true of Atticus Capital’s flagship funds, in spite of double-digit declines in both during August. Fellow New York-based activist Third Point fell 8% last month, though it too remains in positive ground year-to-date. Stamford, Conn.-based SAC Capital Advisors’ International Fund dropped 3% on the month, but is up 10% year-to-date.

And not all quants rebounded from the early August bloodbath. New York-based Tykhe Capital’s statistical arbitrage fund—dubbed “Class B”—was down 18% in August, bringing its year-to-date loss to 21%. Its global equities fund, “Class C”, was even worse, dropping 26% in August, leaving it down 25.8% year-to-date.

Across the pond, some big British names were also hurting, including Lansdowne Partners, GLG Partners and Sloane Robinson.


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