FrontPoint’s Fixed-Income Arb. Hedge Fund Drops 16%

Aug 15 2008 | 11:45am ET

The bigger they are, the harder they fall. Or something to that extent.

FrontPoint Partner’s $378.5 million Relative Value Opportunities Fund, a fixed-income arbitrage strategy, has been feeling the pinch since the beginning of the year. The fund began its first three months of trading down about 22%, but has recovered some of its losses in recent months to the tune of some 7.6%, according to public databases.

Still, the fund’s performance has fallen in line with those of its competitors dropping 16.09% through June. The Hennessee Arbitrage/Event Driven Index declined 1.48% in July (down 2.26% YTD), with most hedge fund managers hurt by widening Treasuries spreads.

The Relative Value Fund invests in securities and derivatives primarily in the global fixed income and currency markets. It began trading in January 2002 and is benchmarked against the Lehman Brothers Aggregate Bond Index.

FrontPoint manages some $9.4 billion in assets.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...