CQS Management, Limited is a hedge fund company with $12 billion in assets under management, based out of London. The fund is famous for its successful bet against US subprime.
CQS uses fundamental research, investing across the capital structure, in securities with the highest risk adjusted return.
According to our sources with direct knowledge of the matter, most of the hedge funds managed by the firm posted positive results in the month of June.
The flagship hedge fund, ABS fund, was down 0.7% for June. The fund uses a long/short value oriented strategy. Year to date, the ABS fund is up 5.5%, and since inception in 2006, has produced annual returns of close to 30%. Asset backed bonds produced positive returns, but long and short positions in equity and credit offset these gains. The fund has been closed to new investors since June of 2011.
The Diversified fund of funds posted a positive gain of 0.90% for the month of June. Year to date, the hedge fund is up 5.7%, and up 8% CAGR since inception in 2007. The fund lost money in asset back securities and posted profits on structured credit and convertible bonds.
CQS started a European distressed fund in August 2011 ((the same month in which US based, Apollo Global Management LLC (NYSE:APO)) , started European distressed credit fund)). The distressed fund has returned 2.2 CAGR since inception, and 1.8% year to date. In June, the hedge fund had a slight gain on asset backed securities and credit positions. The fund posted losses from accrual accounting of Irish debt.
The long short credit fund produced slight positive gains despite having a net short position. Shorts in European debt produced positive returns despite a market rally in June. The hedge fund has slight gains for 2012.
The Asia fund had a gain in June of 0.50%, with losses in equity, offset by gains in convertible debt. Japan convertible debt was responsible for a large portion of the gains. The fund is up 1.7% for the year.
The Directional Opportunities fund posted a 3.9% gain for June on equities, derivatives, structured credit, and convertible debt. Year to date, the fund is up an impressive 17%. Since inception in late 2005, the fund has posted annual returns of 19.7%.
The Convertible and Quantitative Strategies Fund was up 1.1% in June mostly on European convertible bond positions. Since inception in early 2000, the fund is up 8.6% annually, and 5.7% for the year.
CQS’ seven hedge funds are all up this year, and with the exception of ABS, they all posted gains in June.