| Leon Cooperman, Omega Advisors (Bloomberg) |
A large number of high-profile hedge fund firms posted some ugly results in September.
Alpha has already reported the sharp September declines at three New York firms: Greenlight Capital, Pershing Square Capital Management and Glenview Capital Management.
Now, as more hedge funds report results for the month, it is clear that September is shaping up to be one of the worst months for performance in recent memory.
For example, Leon Cooperman’s Omega Overseas, managed by Cooperman’s New York–based firm, Omega Advisors, lost another 6.3 percent or so in September, bringing Cooperman’s loss for the year to 12 percent.
Cooperman recently reiterated his bullishness on CNBC. “Even though I think the market is in a zone of fair valuation, I think the market is not in a position in my opinion to go down a lot, and I think that the path is still upward,” he told viewers on September 8. Omega is mostly a long-short equity fund.
The manager then repeated his favorite refrain of the past few years: “I think stocks are still the most attractive house in the financial asset neighborhood.”
Richard (Mick) McGuire III’s Marcato International, managed by San Francisco–based Marcato Capital Management, is the latest in a growing list of activist firms to post a sharp loss last month. It declined another 3.7 percent in September, bringing its loss for the year to 11.6 percent.
Marcato had eight disclosed long positions as of the end of the second quarter. One of them — longtime activist position Sotheby’s — fell more than 9 percent last month.
Meanwhile, several hedge funds with roots in Julian Robertson Jr.’s New York–based Tiger Management Corp. also posted sizable losses last month. New York–based Falcon Edge Capital posted a 3.8 percent decline in its main fund and is now down 6.8 percent for the year. The firm was founded in 2012 by Richard Gerson, a so-called Tiger Grandcub because he was previously a founding executive at John Griffin’s New York–based Blue Ridge Capital. The hedge fund is among the Tiger crowd with a growing portfolio of private investments.
Jonathan Auerbach’s Hound Partners, managed by the New York–based firm of the same name, fell 5.7 percent in September. However, the fund, a so-called Tiger Seed because it started with seed capital from Robertson, is still up an impressive 7.9 percent for the year. Its biggest position was Valeant Pharmaceuticals International, which has been in a free fall since mid-September, when Hillary Clinton tweeted that she may regulate drug prices if she is elected president.
Meanwhile, Richard Perry’s Perry Partners lost 3.3 percent last month, extending its loss for the year to 8 percent. It is managed by New York–based Perry Capital. Among macro funds, the ugliness continues at Fortress Macro Fund, managed by New York-based Fortress Investment Group, which extended its loss in September by 4.67 percent and is now down 17.49 percent for the year.
Although most multistrategy funds hovered near the break-even mark last month, one fund posted big losses. Michael Hintze’s CQS Directional Opportunities Feeder Fund, managed by London-based CQS, lost 5.4 percent last month. The concentrated fund was hurt when credit spreads widened last month. This pushed the fund down 2.7 percent for the year, though people familiar with the fund’s performance say it is positive again for the year through October 9. In the credit world, the Mudrick Distressed Opportunity Fund lost another 3.9 percent or so last month and is now down more than 19 percent for the year. The fund is managed by New York–based Mudrick Capital Management, headed by distressed credit specialist Jason Mudrick.
Meanwhile, Philippe Jabre had a particularly rough month in September. His JabCap Global Balanced Fund lost 10 percent last month and is now down more than 7 percent for the year. Jabre is the former star convertibles trader for London’s GLG Partners who now runs Geneva-based Jabre Capital Partners.
Several funds suffered big losses in September but are still positive for the year. They include Hound as well as Mark Kingdon’s M. Kingdon Offshore, managed by New York–based Kingdon Capital Management. The fund fell 4.6 percent last month, sharply cutting its gain for the year to 3.8 percent.
