Hutchin Hill, famous for bagging the other side of the London Whale trade, was up 3.83 percent in Q1 after adding a 0.95 percent return in March. The programming driven hedge fund now has $1.1 billion in assets under management. Hutchin Hill’s return lags the S&P 500 but outperformed the HFRX Global Hedge Fund Index and the Barclays US Aggregate Bond Index.

Neil Chriss CEO of Hutchin Hill
Neil Chriss CEO of Hutchin Hill

The hedge fund has low net exposure, with equal allocation in the long and short strategy of each asset class. The largest portion of of HH’s funds are invested in equities and corporate debt. The fund was down in all of its strategies except for Event Driven and Credit focused ones. For information on the fund’s top corporate credit positions, read the January performance summary.

Hutchin Hill Gained From Shorts

HH was up in the Event Driven strategy as merger talks between two unnamed airline companies. The only recent merger in the airline industry that was heard of recently was between US Airways Group Inc (NYSE:LCC) and American Airline Company. The merger was approved by court last month and is expected to finalize in the third quarter. HH also gained from shorts in commodity technology companies.

In the credit space, the trading liquid strategy was nearly flat as performance in long positions was wiped out by losses in the short holdings. The corporate credit L/S strategy detracted slightly in March. Going forward, the fund does not expect the credit spreads to widen much further. Due to the market rally in risky assets, HH has dialled back on its shorts in the respective categories thereby reducing its risk exposure. Hutchin Hill is positioned on the short side of metal miners, like several other investors, and is bullish on companies that are targets of shareholder activism.

The fund was up in its macro trades in EM’s but detracted in similar positions in the developed markets. In equities, HH gained from its long positions in large cap biotech but was down in its  shorts in smaller biotech companies. The fund continues losses in shorts in credit card companies and large cap banks. Longs in stock exchanges and small/mid sized banks were profitable. The high returns on S&P 500 in Q1 resulted in losses for HH’s statistical arbitrage strategy due to strong price reversion coupled by increased deleveraging.

Hutchin Hill has promoted David Gulkowitz to Chief Operating Officer, Joe Lanzillotti to Chief Financial Officer and Sean Huba to Chief Information Officer.