Amid all the bad news at Pershing Square Capital Management – its long bet on Valeant Pharmaceuticals is down again today and its rare short on Herbalife is breaking into new yearly highs – there are signs of improvement. Considering the HSBC Hedge Weekly performance ranking for instance.

Also see the top hedge fund letters

Pershing Square, Dorset Energy Fund, Oil Prices

Pershing Square is almost out off the 20 worst performers list

William Ackman’s $3.9 billion activist fund, Pershing Square, has been on the list of 20 worst performers for nearly as long as its current drawdown. In 2015 the fund was the 11th worst performer, down 16.66%. This followed the year in which it seemed it could do no wrong – ending 2014 a charmed performer, ending eighth best in absolute return with 37.24%.

Things are starting to look up to a degree, however. The fund, with -18.3% year to date performance, is almost off the list of 20 worst all-time performers, currently sitting on the edge at #20. Investors who enjoyed significant upside of 2014 are still near break even on their investment. The July, 2015 to March 2016 drawdown of 39.81% is the longest in fund history. But the annual volatility of 14.82% is reasonable over the long term relative to 11.77% annualized performance – so long as one can stomach the rather dramatic highs and lows of late, the most volatile period in the fund’s history.

Dorset oil has big 49.62% year to date performance on over $10 move in oil for 2016, higher performance than occurred on the way lower

In the aftermath of the Brexit vote and oil finding resistance and a degree of trend exhaustion near the $50 level, it is the Dorset Energy Fund, LTD – Class A that is the top of the performance list. With 49.62% year to date absolute performance, Dorset, like Pershing Square, has been a roller coaster for investors.

As the Brent oil market fell from a 2015 yearly high of $70 per barrel to a low near $35, Dorset topped the 2015 negative performance list, subtracting -44.05% from investors on close to a $35 move in oil. This also followed a 2014 when the fund lost -27.20% in another negative oil market.

But then there is 2016. Oil moved from a January low and began to trend higher – well before the stock market began to mean revert on February 11. Oil began its uptrend the second week of January and has leveled off, with Brent now trading near $46. During this 2016 bull market move of a lessor magnitude than the 2015 move from $70 to $35, Dorset has nonetheless overcome its negative 2015 -44.05% performance with a much weaker price trend in 2016. The hedge fund’s leverage levels during these up and down markets was unknown, but the fund, with annualized volatility of 25.62%, pulled out of its worst historical drawdown in February of this year. The 70.37% drawdown the now $115 million fund experienced from June 2014 to February is over. Time to tackle markets anew. This might be somewhat difficult as oil markets appear not to be in a significant uptrend at present for both technical and fundamental reasons.

Other notable winners on the top 20 performance list include systematic strategies Quantedge Global Fund, in second place with 40.43% year to date returns. Other notables in this category include the Conquest Macro Fund, LTD (Comp), up 26.50% year to date, Tulip Trend fund, up 22.63% year to date, Renaissance Institutional Equities LP (B), up 17.75% year to date. Welton Global Directional Portfolio, likewise a systematic strategy, uses both short- and mid-term time horizons and is up 14.44% year to date as of July 18, number 17 on the top 20 performance list. With the stock market rally coinciding with a tempering of key market trends recently, the success of the category still remains largely based on existing momentum markets that were positive contributors before the Brexit vote. Many mid-term trade execution triggers that were generated immediately after the Brexit vote have delivered generally mixed if not slightly negative performance.