YEAR OF ‘DISTRESS’

Hedgie Mudrick’s 40% gain stands out in tough ’16

In an another tough year for hedge funds — where the industry was forced again to defend its high fees and generally underwhelming returns — Jason Mudrick’s $1.4 billion Distressed Opportunity fund is putting the finishing touches on a dramatic turnaround.

After finishing 2015 down 25 percent, Mudrick’s distressed debt fund is up nearly 40 percent through Dec. 16, The Post has learned.

That’s more than six times the 6.3 percent investment gain the average hedge fund posted through Nov. 30.

The S&P 500 Index is up 9.3 percent over the same period.

“It was a good year for distressed generally,” Mudrick told The Post. He added that volatility brought on by the changing administration should provide interesting investment opportunities in 2017.

That weak overall performance of the hedge fund industry is partially responsible for the $77 billion that investors withdrew from the $3 trillion industry over the first 10 months of the year, according to eVestment data.

Underperforming fund managers such as Och-Ziff Capital Management, Brevan Howard and Pershing Square lowered fees to stave off redemptions. And yet, 2016 saw some bright spots. For example:

Renaissance Technologies has been a consistent winner this year. The firm, which relies heavily on computer-based models, is up 14 percent through Nov. 30 and is on track to deliver its fourth consecutive year of double-digit returns, according to HSBC data.

David Einhorn’s Greenlight Capital staged a slight comeback after a dismal 2015 in which the fund lost 20 percent — in part due to an investment in now-bankrupt SunEdison.

The fund is up 6.6 percent through Nov. 30, according to HSBC data.

On the downside, Bill Ackman’s Pershing Square is set to take another beating this year. In 2014, the hedgie’s stock picks rewarded investors by nearly 40 percent.

Those gains, and more, have been given back as the fund, which lost 20 percent last year, is down 12 percent through Dec. 13, due in part to a disastrous investment in Valeant Pharmaceuticals.

Perhaps the biggest loser this year is London-based Odey European. Despite posting double-digit returns immediately after Brexit, the fund is down 48 percent for the year after losing 12 percent in 2015.