Appaloosa, Owl Creek, Tudor Among '13 Winners

Jan 3 2014 | 3:11pm ET

History will show that 2013 was an extremely disappointing year for hedge funds, with the average manager struggling to achieve even one-third the return of soaring stock markets. But a number of prominent managers will remember last year very differently.

Appaloosa Management returned 42% and Owl Creek Asset Management 48%, to name just two of the hedge funds to top the Standard & Poor's 500 Index's nearly 30% rise last year. Tudor Investment Corp. didn't do as well overall, but it earned more than 100% shorting gold in 2013.

The $14 billion hedge fund's bearish play on the precious metal was championed by senior trader Chris Tuohy, who turned less than $10 million in gold put options into more than $100 million, The Wall Street Journal reports. Tudor made further gains on gold from founder Paul Tudor Jones' own smaller short against the metal.

Tuohy has since exited his gold short, missing out on its further fall towards the end of the year. Gold lost 28% in 2013, its first annual loss in more than a decade.

Bearish bets weren't the only winners in 2013: Appaloosa's long options on stocks paid off handsomely, and Paulson & Co.'s $2.7 billion Recovery Fund rose 55% through November on bullish stock bets. Jericho Capital Partners earned 33% through November after boosting its exposure to stocks.

Owl Creek's impressive return stemmed from its bet that the new Japanese government, led by Prime Minister Shinzo Abe, would employ aggressive new monetary policies to boost its flagging economy.

Merk Investments' 5.8% return may seem downright pedestrian compared not just to last year's big winners, but also to the average hedge fund. But the Palo Alto, Calif.-based first made its money in currencies, which battered most players in 2013—the average currency fund fell nearly 5% last year.

Merk's founder and namesake, Axel Merk, bet heavily on the euro, which most investors expected to fall. Instead, it rose as fears about a eurozone collapse faded.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.