Posted on Reuters: Hedge funds chalk up more losses, big names suffer
- By Svea Herbst-Bayliss
BOSTON, Dec 4 (Reuters) - Some of the biggest names in hedge funds lost money in November, including Dan Loeb and Kenneth Griffin, but John Paulson was among the few who made money for their investors.
Hedge fund investors around the world lost money for the sixth straight month as many in the industry reported steepening declines, investors said on Thursday.
Dan Loeb, an activist investor known for his sharply worded letters to poorly performing companies, told investors that his Third Point Offshore fund lost 28.24 percent in the first 11 months of the year after the fund slipped 2.6 percent in November.
James Pallotta's Raptor Global Fund lost 1.51 percent last month, leaving the fund off 17.36 percent for the year.
Martin Hughes' Tosca Fund Ltd fell 5.15 percent and is now down 67.54 percent for the year.
And Kenneth Griffin's Citadel Investment Group, which boasts one of the industry's longest winning records, lost roughly 13 percent last month, swelling its year-to-date losses to about 47 percent, investors said.
The numbers came as investors suffered through more sharp stock market gains and losses that left many managers ill-prepared, if they were long or short, investors said.
Funds also felt the impact of frozen credit markets.
While many hedge fund managers are still compiling their numbers for the month, early indications show the average fund lost 2.25 percent, leaving it down 21.31 percent for the year, according to data from data tracking company BarclayHedge.
Groups that monitor performance like Hedge Fund Research and Hennessee Group are expected to announce November returns in a few days.
Fed up with the industry's worst-ever returns, endowments, pension funds and private investors demanded more money back, which forced even more selling among hedge funds, managers said. In October, industry assets shriveled 9 percent to $1.5 trillion, their lowest level in two years, according to data from Hedge Fund Research. Data for November is not available yet.
"Money is coming out of the system, and people are redeeming because they need the money," said Antonio Munoz, who runs EIM Management USA, a fund of hedge funds.
While many fund managers are nursing heavy losses there are also a few bright spots.
Fund manager John Paulson, one of the first investors to bet that housing prices could decline on a national basis, made more money for his investors in November when his roughly $5 billion Advantage Ltd fund gained 2.04 percent. That leaves the fund up roughly 21 percent since January, according to an investor.
Paulson's roughly $10 billion Advantage Plus Ltd fund rose 3.19 percent in November and is now up 33.52 percent year-to-date.
Louis Bacon's Moore Global Investment Fund gained 3.74 percent through Nov. 26, leaving the fund down only 4.76 percent for the year so far.
And Bruce Kovner's Caxton Global Investment fund is up 11.52 percent for the year.
The following article on Bloomberg talks more on Ken Griffin's Citidel: Citadel Funds Lose 13% in November, 47% This Year
- By Saijel Kishan and Katherine Burton
Dec. 4 (Bloomberg) -- Citadel Investment Group LLC, the Chicago-based hedge-fund firm run by Kenneth Griffin, lost 13 percent in November, bringing the decline for the year to 47 percent, according to two people familiar with the matter.
Losses at the Citadel’s two biggest funds came from investments in convertible bonds, high-yield bonds and bank loans, and investment-grade bonds, which were hedged with credit default swaps that protect the buyer in the event of a default. These same wagers started the funds’ tumble in mid-September.
“Digging out of this hole may be tough for them,” given the lack of trading in the credit markets, said Michael Rosen, principal at Santa Monica, California-based Angeles Investment Advisors LLC, which advises clients on hedge-fund investments.
The Kensington and Wellington funds, which together manage $10 billion in assets, have received requests from investors who want to withdraw about $1 billion by the end of the year, said the people, who asked not to be identified because the information is private.
Griffin, 40, had posted just one losing year since starting the firm in 1990, dropping 4 percent in 1994. Katie Spring, a spokeswoman for Citadel, declined to comment on the returns, which were reported earlier today by the Wall Street Journal on its Web site.
The hedge-fund industry has posted its worst performance on record this year, with average losses of about 22 percent this year through November, according to data compiled by Chicago- based Hedge Fund Research Inc.
The Citadel funds have made money in stocks and on so-called macro trades -- wagers on stock indexes, bonds, commodities and currencies based on macroeconomic trends.
Three other Citadel funds, whose returns are tied to the firm’s market-making business, have climbed about 40 percent this year. Those funds manage about $3 billion.
Even with Citadel’s drop in assets, the firm has not breached the terms of its contracts with lenders, one of the people said.
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