This was a great year for activist hedge funds. Barry Rosenstein’s Jana Partners, Mick McGuire’s Marcato, Carl Icahn, Larry Robbins’ Glenview, Nelson Peltz’ Trian Partners – all have gained decent numbers so far. Put another way, overall long/short equity strategy did the best in 2013. Credit Suisse Long/Short Equity AllHedge Index was up 15% through the end of November. HFRX Equity Hedge Index gained 9.77% in the same period.
Small hedge funds, big gains
Just like most years, this was a great time for some small hedge funds. We have noted the eye-popping returns that Japan-focused hedge funds have gained this year; it is time to look at some who have gained in the U.S and Europe while managing less money than the bigwigs of the industry.
Angus Donaldson and David Yarrow’s long/short equity strategy has gained a whopping 58.8% in Pegasus Fund through the end of November, according to data from Bloomberg. The fund is managed by Clareville Capital, a London-based investment manager and holds positions in several names in U.K’s retail sector. Returns were particularly boosted by gains from Thomas Cook Group plc (LON:TCG), an airline carrier, which is up 240% YTD.
Like we reported earlier, Maglan Capital, with $60 million under management, netted a gain of 47%, according to their monthly letter. Maglan gained from long bets in FairPoint Communications Inc (OTCMKTS:FRCMQ) (NASDAQ:FRP), MGM Studios and SUPERVALU INC. (NYSE:SVU) and is set to end this year with its highest return since inception in 2011.
Antares European Fund, an Ireland-based long/short fund, has returned 23% through the end of November. According to data from HSBC Hedge Weekly. the fund manages $500 million.
Billings Capital Management has gained 46% through the year in its BCM Weston Fund. Bloomberg reports that the hedge fund managed by Billings family, made the highest gains in media and financial services stocks. BCM Weston manages $60 million and was up in its bets on LIN Media LLC (NYSE:TVL), Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Nexstar Broadcasting Group, Inc. (NASDAQ:NXST), Visa Inc (NYSE:V), Mastercard Inc (NYSE:MA) and Wells Fargo & Co (NYSE:WFC).
Dorset Energy Fund is up 29% for the year even after a roughly 5% decline in November. The hedge fund manages $270 million according to HSBC Hedge Weekly. JENOP Global Healthcare Fund Ltd, is up 23.5% YTD. The fund oversees $150 million and is managed by David Chan.
Lucerne Capital Management, founded by Pieter Taselaar, reported a gain of 26.8% through the end of November. The Hedge Fund manages $300 million and is co-managed by Taselaar and Thijs Hovers. Taselaar is bullish on European equities and expects them to outperform the U.S. market in the coming period.
Three Bridges Capital’s Europe Master Fund recorded a gain of 1.7% in November, pushing up total return to +22.2%. The Hedge Fund manages $550 million and maintains a long/short ratio of 1.8. The fund’s largest long positions are in BNP Paribas SA (EPA:BNP), Axa SA (OTCMKTS:AXAHY), Kingfisher plc (LON:KGF), BT Group plc (NYSE:BT) and BHP Billiton Limited (NYSE:BHP) (NYSE:BBL), according to a monthly shareholder letter seen by ValueWalk.
Former SAC and Carlson Capital alum Jason Karp’s 15% return over the third quarter is also impressive, particularly because Karp has several interesting short bets. Karp’s Tourbillon Capital is managing $350 million, and the fund was launched in Jan 2013. Tourbillon’s returns were helped by its profitable short bet in J.C. Penney Company, Inc. (NYSE:JCP).
Loyola Capital Partners has also reported big gains but since it is a long-biased strategy, the returns are not equally impressive. The hedge fund manages $84 million and recorded a gain of 43% through the end of November.
Small hedge funds win but others lose in commodities, managed futures
The strategy that did not do well in 2103 was easily managed futures/quant/CTA, whatever you like to call it. Cantab Capital is looking at a 22.75% loss in its Aristarchus Program whereas BlueCrest Capital has lost 8.6% in its BlueTrend Fund in the eleven months of 2013. Others who have seen major losses are Brevan Howard’s Emerging Market Strategies down 12.8% whereas Brevan Howard Commodities Strategies is down 7.7% through November. Waterstone Market Neutral Fund, a long/short equity fund recoded a loss of 16% through November 22 of this year.