Liongate Tamed By Roiling Markets

Oct 14 2008 | 11:34am ET

Liongate Capital Management’s funds of funds are experiencing their worst year ever since inception.

The firm’s US$460 million Select Fund fell 6.03% last month bringing its year-to-date returns to 11.6%. All strategies within the fund’s portfolio, with the exception of volatility arbitrage, were negative for the month, according to the firm.

“In Sector Specialist, three out of six managers caused the majority of the losses, amidst sharp declines in commodity prices and energy related equities,” it said. “Convertible Arbitrage also made a significant negative contribution due to sharp mark to market losses as a liquidity squeeze in credit markets led to a sell-off in long bond positions that far exceeded offsetting gains made by short equity trades. Most of the losses in the equity long/short allocation came from one manager whose higher directionality hurt the portfolio in the current environment.”

Liongate’s $2.8 billion Multi-Strategy Fund also fell 2.42% last month, leaving it down 0.41% on the year. Last year, the fund returned 17.71%, while the Select Fund fared even better, gaining 23.51%.

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