Hutchin Hill is a well known Multi strategy hedge fund founded by a very clever former SAC quant PM. He has seed capital from James Simons (Renaissance).
Hutchin Hill Capital has outperformed the S&P 500 and HFRX Global Hedge Fund Index for April 2012. Net returns for Hutchin Hill were +2.65% compared to 0.63% for S&p 500 and +0.12% for HFRX. From its inception in July 2008, the hedge funds’s net performance has been +36.43 percent or +8.53% annualized, compared to a +23.80 percent (+5.79 percent annualized) for S&P 500 in the same period. The total return for HFRX for the same period were -11.73%, or -3.23% annualized.
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The fund manager diversifies its portfolio into following six strategic areas.
1. Managed Future Strategy
It focuses on liquid futures and forward contracts in a variety of asset classes including equities, fixed-income, commodities and currency. It is under the direct management of Investment Committee (Messrs Chriss and Padowitz). It was slightly down in April due to losses in commodities and Asian equities, which offset the gains in Western equities and currencies.
2. Quantitative Strategies
This division keeps an eagle’s eye on exploitable opportunities from systemic mispricings by following disciplined research process and methodologies. It generally focuses on exchange-traded funds, options, futures, bonds, swaps and currencies.
3. Discretionary Credit
The fund employs a variety of investment techniques to globally invest in tradable debt. Discretionary Credit trades in new issues, liquid bond issues, re-financing, credit default swaps and relative value trades. It contributed +0.29% to the total net performance (+2.65%) in April 2012.
4. Event Driven / Risk Arbitrage
Posted the best performance amongst all the strategies in April, contributing over half of the total monthly gain (+1.36% of +2.65%). It takes long and short positions in companies which generally have low exposure to the market movements. It trades in liquid instruments like preferred stock, listed options, listed common stock, etc.
5. Macro Strategies
Volatility arbitrage, directional, cross-sectional, global relative value, quantitative macro and capital flow arbitrage are the techniques used globally. This strategy produced positive returns for the company.
Hutchin Hall plans to grow its exposure to macro strategies. Therefore it will be adding Omar Saeed, who is a Partner at Eton park Capital Management. Omar will look after the macro and derivative strategies of the hedge fund. Another high profile person joining Hutchin Hill is Jim Saparo who currently runs the proprietary trading business at Royal Bank of Canada (Royal Bank of Canada (TSE:RY) (NYSE:RY) will join in July, according to sources familiar with the matter.
6. Opportunities Strategies
This strategy is under the direct control of the company’s Investment Committee. It covers investment opportunities and hedges that are not expressed in any other strategic area. It showed strong net performance in April 2012.