Anthony Scaramucci’s investment in Third Point Ultra, the hedge fund run by his longtime pal Dan Loeb, helped fuel SkyBridge Capital’s gains during August.
Third Point Ultra, which rose 11 percent in August, contributed 65 basis points (0.65 percent) of the month’s return of 2.11 percent for SkyBridge’s registered fund of funds, founder Scaramucci wrote in a September letter to investors.
At the end of August, that fund, called SkyBridge Multi-Adviser Hedge Fund Portfolio Series G, had gained 10.63 percent since the March Covid-19 drawdown that had left it down 23 percent for the year for the first quarter. Even so, it’s a slow march back up—SkyBridge’s fund is still down 16.16 percent for the year through August.
The letter was also signed by SkyBridge’s Ray Nolte and Troy Gayeski. Regarding the Third Point stake, the men wrote, “We are gratified that one of the portfolio’s ‘diversifiers’ has added so much value.”
Third Point Ultra, a levered version of Loeb’s Third Point Partners, has gained 31.2 percent since April 1, according to the letter. On September 1, SkyBridge swapped the position back into Third Point Partners, which is a fund that SkyBridge has invested in for years.
“Third Point Partners holds the same investments as Third Point Ultra, but is run with lower net exposure (currently about 45 pts less),” Scaramucci, Nolte and Gayeski wrote. “Suffice to say, this swap was affected to mitigate overall portfolio risk.”
Third Point Ultra was one of the top-ten funds for SkyBridge, accounting for 6.73 percent of the fund of funds’ portfolio.
SkyBridge was dominated by hard-hit structured credit funds when the coronavirus crash occurred, so it shook up its main portfolio, branching out into macro, multistrategy, distressed, and equity funds.
Among the new names SkyBridge has said it was investing in are Renaissance Institutional Equities Fund, Bridgewater Pure Alpha Fund 18, Point72, Canyon Balanced, and Brevan Howard Master.
Yet performance for a couple of these — Renaissance and Bridgewater — has been poor this year, and only two are among SkyBridge’s top-ten fund positions now. Point72, Steve Cohen’s multistrategy fund now makes up 7.28 percent of the SkyBridge portfolio, while Canyon Balanced Fund, a distressed corporate credit fund, now accounts for 6.99 percent.
One of SkyBridge’s top remaining structured credit funds is Angelo Gordon’s AG Mortgage Value Partners fund, which made up 8.59 percent of the portfolio at the end of August is and the second-largest position.
The comeback of structured credit is also boosting SkyBridge.
“The structured credit book continues to crank out solid months. In August, the average dollar weighted return of our structured credit managers was 1.98 percent,” the execs wrote investors.
And while SkyBridge has shifted into macro and multistrat names to some degree, they said that 74 percent of the fund will continue to be credit strategies, either structured credit or distressed corporate credit.
“We believe that there is room for considerable price appreciation from structured credit (aside from the inherent ‘pull to par’), and thus, we expect the total return from these assets to continue to be strong for the coming year,” the letter said.
