Tide Point Capital Management was the top performer of 2016 in an otherwise mixed year for the so-called SAC Pack — hedge funds led by individuals who once worked for Steven Cohen’s SAC Capital Advisors.
Alpha is tracking one dozen funds within this group. And just two with sizable amounts of capital — three including a tiny fund — beat the Standard & Poor’s 500 stock index last year. This is significant given that virtually all of the managers run long-short funds.
This is still better than the larger group of funds with ties to another icon — Julian Robertson Jr. — many of which lost money last year, while others barely eked out gains.
In any case, Tide Point Capital Management, Tide Point’s eponymous long-short equity fund, gained 16.15 percent last year after dropping 2 percent in the first month of the year.
The Old Greenwich, Connecticut–based firm is headed by Christopher Winham, a senior research analyst at SAC Capital Advisors from 2002 to 2005. The firm, seeded by Tiger Cub Chris Shumway, managed a little more than $1 billion as of January 1, 2017. It emphasizes industrials, materials, and consumer discretionary and energy stocks.
According to its year-end, one-page exposure report, the fund made more than 29 percent from its long positions but lost about 8 percent from its short bets. Fees and expenses sliced another 5 percent from performance. U.S. stocks account for slightly less than 90 percent of both its long book and short book.
Tide Point was led by chemical maker Albemarle Corp., the firm’s largest individual common stock long holding all year. It surged 55 percent last year.
Otherwise, Tide Point seems to regularly change its top holdings each quarter.
At year-end, its top five longs were all cyclicals that benefit from an upturn in the economy: Albermarle, airlines American Airlines Group and JetBlue Airways Corp., Luxembourg-based steelmaker ArcelorMittal, and oil producer Centennial Resource Developent.
The only other member of the SAC Pack with a sizable sum of assets to beat the market indexes was Melvin Capital Management, headed by former SAC trader Gabriel Plotkin.
As we earlier reported, Melvin, founded in late 2014, posted gains between 11 percent and 12 percent last year.
Melvin’s $3.8 billion U.S. equity portfolio is heavily skewed toward consumer stocks, including three of the four so-called FANG stocks — Facebook, Amazon.com, and Alphabet (Google’s parent company).
The internet stocks played a big role in Melvin’s success last year. Facebook rose about 10 percent, Amazon.com gained nearly 11 percent, and Google climbed a little less than 2 percent.
In addition, Advance Auto Parts, which sells replacement parts for cars, returned more than 12 percent, while Constellation Brands, which distributes liquor and beer, added nearly 7.7 percent.
The worst performer of the SAC Pack was Jason Karp’s Tourbillon Capital Partners, which posted a 9 percent loss in its long-short fund, Tourbillon Global Equities. However, Tourbillon Global Long Alpha Fund, the firm’s long-only fund, gained 9 percent last year.
