One year ago
»» AR profiled Bob Treue, the founder of Barnegat Fund Management. Treue’s laid-back lifestyle is atypical of many hedge funders—he rides to work on a bike he bought at Target and often works barefoot in his office in the summertime—but his trading style has generated big profits. Barnegat gained a stunning 132.68% in 2009 and 15.82% in 2010, well ahead of the AR Fixed Income Index, which returned 15.66% in 2009 and 9.55% in 2010.
Treue continues to outperform. Through April, the Barnegat Fund gained 9.04%, and it has produced a net annualized return since inception of 17.97%. He attributes performance to the thinning competition. “Our fixed income relative value competition continues to depart,” he wrote in a March 9, 2011 investor letter, adding that the crisis in 2008 and 2009 led several funds with billions of dollars under management to shut down or shrink. And although the Volcker rule is forcing proprietary desks to close, which may increase the number of fund launches, the new funds don’t have the same power as the desks that are departing, he says. “No matter what the business, less competition is an appealing attribute.” Barnegat manages $494 million.
Five years ago
»» Ralph Rosenberg, a 17-year veteran of Goldman Sachs and the bank’s former head of special situations, formed R6 Capital and planned to launch its flagship global credit fund in October 2006. R6 invested across a variety of distressed securities.
Rosenberg was only able to raise $300 million, and after lackluster returns—from November 2006 through October 2007, it was up approximately 5%—he liquidated the fund and joined Eric Mindich’s Eton Park Capital Management. Rosenberg invested $20 million of his own money in Eton Park, which at the time, oversaw $10 billion firm-wide. He focused on credit, distressed and real estate investing.
Rosenberg left Eton Park in December 2010 when the firm balked at his idea to launch a commercial real estate fund. He “focused on areas of illiquid opportunities that, for different reasons, were not likely to be key areas of investment for us in the near term,” read a January 18, 2011 investor letter.
Three months later, in March 2011, Rosenberg landed at $61 billion private equity firm KKR, where he was made chief of global real estate investing, and is responsible for finding “attractive real estate opportunities for the firm’s diverse pools of capital, including equity, debt and special situations investments,” according to a KKR statement.
»» Brevan Howard Asset Management, the now-$32 billion London macro shop which at the time managed approximately $10 billion, planned to roll out a European equity long/short hedge fund with $500 million. It marked the macro firm’s first major foray into equities.
The Brevan Howard Equity Strategies Fund began trading on July 1, 2006, and while the fund did not produce disastrous losses in 2008 compared with many of its peers (it was down 8.48%), its performance since then has been tepid. It gained 5.59% in 2009, 3.04% in 2010, and is down 1.42% through March. The fund’s net annualized return since its inception is 2.54%. See AR’s database for more detail on performance. Brevan Howard manages $25 billion.
