Better returns for hedge fund managers in May

BOSTON: Some hedge fund managers can finally brag a little as several prominent ones, including Daniel Loeb and William Ackman, last month beat the broader stock market’s gains, early returns show.

Loeb, who runs US$16bil Third Point, told investors his Third Point Partners LP fund gained 2.1% in May while its more aggressive Third Point Ultra Ltd fund climbed 3.5%.

The Pershing Square Holdings Ltd fund, run by Ackman’s US$11bil Pershing Square Capital Management, meanwhile climbed 2.4% in May.

Both beat the average hedge fund’s 0.24% gain in May plus the broader Standard & Poor 500 stock market index’s 1.4% gain.

Third Point Ultra is up 16.1% in the first five months of 2017 and Partners is up 9.9%. Ackman’s fund is up 4.3%, after two years of losses.

The gains come at a critical time as industry investors protest lacklustre returns with calls for lower fees. Many hedge fund managers were wrong-footed by last year’s US election inspired rally but said they are now finding their way with bets on foreign stocks and undervalued US companies.

The Citadel Wellington fund, run by Ken Griffin’s US$26bil Citadel, gained 1.9% in May and is up 5.5% for the year. Dan Och’s US$32.4bil Och-Ziff Capital Management’s OZ Master Fund gained 1.31% last month, leav- ing it up 6.15% for the year. Its OZ Asia Master Fund notched a 3.72% gain in May, leaving it up 12.45% for the year.

Some smaller funds, especially activist oriented strategies also gained. Mick McGuire’s Marcato Capital Management, which put three directors on the board at Buffalo Wild Wings, gained 1.6% in May and is up 7.7% for the year. Scott Ferguson’s Sachem Head LP fund gained 2.48% last month.

Foglight Capital, which focuses on companies that have been beaten down with a chance to recover gained 4.2% in May and is up 11.4% this year. Network software company Gigamon Inc was one of its biggest winners last month. — Reuters