Hedge Funds: October Performance Numbers ~ market folly

Tuesday, November 11, 2008

Hedge Funds: October Performance Numbers

We have been anxiously awaiting the numbers from various hedge funds to see just how poorly (for the most part) many of them did in the abysmal month of October. If you'll recall, the indexes fell 10% or so in the month alone. Undoubtedly, the swift move caught a lot of people off-guard. Below, I've assembled a collection of performance numbers from various funds sourced from anonymous investors, hedge fund investor letters, and various media publications. If you missed it, you can check out our September hedge fund performance update to get a feel for how these funds were doing before the month of October struck. So, let's get right to it.

  1. Maverick Capital's Maverick Fund was -6.34% for October and is now -26.47% ytd. Lee Ainslie's fund is off the beaten path this year, as they are accustomed to solid annual returns. You can see their most recent investor letter here, and their portfolio holdings here.
  2. Viking Global's Global Equities III Fund was -1.10% for October and is -2.41% ytd. Their Global Equities LP is -3.92% for the year and was down 1.10% in October. Andreas Halvorsen and company seem to be faring alright this year, all things considered. You can view their month by month performance breakdown here.
  3. Barry Rosenstein's Jana Partners had a rough month. Their Piranha fund was -19.2% for October and is now -21.7% for the year. Additionally, their Nirvana fund fell 13.2% in October and is down 21.9% ytd. As you can see, a big chunk of their losses came solely from the month of October. You can check out some recent Jana portfolio updates here and read about their recent rough patch here.
  4. Steven Cohen's SAC Capital was -12% for October and now find themselves -18% year-to-date. Those performance numbers angered ole Stevie and he moved SAC to cash. Also, Cohen is said to be closing his CR Intrinsic fund, which is comprised of mainly his own personal money. [Dealbreaker]
  5. Farallon Capital was -9% for October and -23% ytd.
  6. Tontine Capital Partners was -65.7% in October and now down an astonishing 76.8% for the year. We recently detailed that they had revealed a 6.16% stake in Myr Group (MYRG). You can also find out where their pain was coming from by checking out Tontine's portfolio holdings.
  7. Peter Thiel's macro fund Clarium Capital was -18% for October and now find themselves -2.8% for the year. The month of October was disappointing for them, as they basically gave up the solid gains they had posted from earlier in the year. This was in part due to their shift to equities right before the carnage hit in October. We posted about Clarium's recent performance here and detailed their portfolio holdings here.
  8. Passport Capital's Global Strategy Fund was -38% for October and is now -44% for the year. We had previously written about Passport's performance here.
  9. Ken Griffin's Citadel continues to feel the pain as their Wellington fund was -38% for October and sits -44% for the year. We recently detailed Citadel's pain here.
  10. Bruce Kovner's Caxton Associates is faring decently this year. Their Global Investment fund was up 2.6% for October and sits up 7.25% year-to-date. They recently boosted their stake in Ferro (FOE). Here's the rest of Caxton's portfolio.
  11. Daniel Loeb's Third Point was -10.3% for October and is -26.9% ytd. Our most recent coverage of Third Point's portfolio can be found here.
  12. Paulson & Co's dominance continues. Their Advantage Plus fund is up 29.4% for the year after posting a +3.8% gain in October. Paulson & Co recently took a large stake in Cheniere Energy (LNG) and we previously saw them shorting UK banks.
  13. Philip Falcone's Harbinger Capital was -5% for October and finds themselves down only 13% for the year. The fund has had a wild ride this year, being up 42% in June and now -13% for the year. This can partially be attributed to the fact that their portfolio was previously littered with natural resource equities that had been obliterated such as Cleveland Cliffs (CLF) and Freeport McMoran (FCX). Check out how Harbinger profited from shorting Wachovia (WB) and view the rest of their portfolio here.
  14. David Einhorn's Greenlight Capital sees themselves -13% for October and now -26% for the year. We've covered Einhorn's portfolio activity here.
  15. Shumway Capital Partners' Ocean Fund was up 0.85% in October but is still down 8.24% for the year. The fund is ran by Chris Shumway, one of the many 'Tiger Cubs' we cover here on the blog. 'Tiger Cubs,' if you're not familiar, are pupils of legendary Julian Robertson's Tiger Management hedge fund. Shumway recently detailed some investment ideas at a 'Tiger Cub' hedge fund panel.

While many funds have found it difficult out there, others have gained footing. Obviously, in such a market environment, one would expect bearish funds to do well. And, that's exactly the case with $7 billion short-seller Jim Chanos. His Kynikos long-short fund is up 11% through the year. His Ursus short only fund is up 53% through October. And, he's done even better than his numbers last year, in which he returned 30%. And, in a comment with the NY Post, Chanos refused to name names, but revealed that, "We are short all of the satellite and most of the cable companies in the US."

Additionally, others have found a way to profit off the gloom and doom. Drury Capital is up 60% for the year with the help of their proprietary computer models. Conquest Capital, a $611 million macro fund ran by Marc H. Malek, is up 44% year-to-date. The scary part about his fund? Even with his stellar performance, he is still seeing redemption requests. That just goes to show that everyone simply needs cash. And, when in times of duress, sell your winners.

This has easily been the worst year for hedge funds in quite some time, thanks to yet another horrible month in October. As evidenced above, even some of the historically brightest managers in the game are stumbling. Such struggles will lead to even more investor redemptions and continued deleveraging. For more information and background on some of the prominent hedge funds mentioned above, head over to my posts on hedge fund manager interviews and Alpha's hedge fund rankings.

Make sure to check back with us here at MarketFolly.com as the new 13F filings start to pour in this week and next week. We'll examine these latest SEC filings that reveal the updated portfolio holdings of the hedge funds mentioned above.

Sources: Anonymous investors, hedge fund investor letters, (2), NY Post, NY Times, & Bloomberg

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