Hutchin Hill’s performance has been covered in our previous articles. According to a shareholder letter, Hutchin Hill Capital Master Fund gained a handsome +4.3 percent boost in October (gains for November have not been disclosed yet). HH Master Fund is up 7.7 percent for the ten months of 2012. The YTD returns compare well with the HFRX Global Hedge Fund Index, which was up 2.15 percent in the same period, but under-performed the S&P 500 that has gained 12 percent through October.
In Events, the investor letter mention strong gains from a rights offering of a media company. Hutchin Hill disclosed a position in Liberty Interactive Corp (NASDAQ:LINTA) in 13f filed for Q3. Liberty Interactive Corp (NASDAQ:LINTA) put up a rights offering in October so we can only guess that this is the position Hutchin Hill is referring to. The fund also profited from the breakup of two conglomerates in October.
In equities, the fund profited from longs in mortgage servicing companies and bank stocks, and detracted slightly in the short portfolio. Going forward, the fund has exited its position in mortgage servicing and is long in credit cards, mid and small banks, exchanges and short in large cap banks, trust banks, and online brokers.
The fund was profitable in the quantitative credit strategy, with gains from long positions in Investment Grade credit and shorts in high yield bonds in Europe. In the US, the fund managers expect detraction in CDS and equities, due to fears of a fiscal cliff. Hutchin Hill’s CEO, Neil Chriss, talked about the repercussions of the fiscal cliff on Bloomberg yesterday. The fund is looking to short the cash assets in the future. HH was also up in the statistical arbitrage strategy. The fund is bearish on technology companies that are unable to transition through the slowdown in the PC and printer market, telecom and auto companies in Europe that have reduced demand, and companies exposed to volatility in iron ore pricing.
Hutchin Hill’s macro strategy was successful in emerging markets, but underperformed in developed countries. The expectation is for lower interest rates throughout the developed markets. The fund lost in opportunistic and managed futures strategy and has cut exposure in bond futures because of low yields.
Hutchin Hill plans to change the name of Hutchin Hill Capital Fund to Hutchin Hill Diversified Alpha in the next year, in order to identify it separately from the firm’s name.