Pivot Capital Management is an alternative asset manager. Its flagship hedge fund, Pivot Global Value Fund was up 4.9% for the month of may. Year to date the fund is up 6.8%. Current assests under management for the value fund is over $1.5 billion. The fund is bearishly positioned, which likely contributed to the positive returns in May, a month many funds were down. Additionally, in November we reported that Pivot called China ‘The Biggest Bubble in History.’
Below is a chart from the November presentation, showing that China’s credit expansion is the largest in recorded history:
The New York based hedge fund, is over 50% net short Europe, with the rest of the world assets slightly net short. The fund mostly is invested in fixed income. Equities, credit default swaps, and currencies make up a small position of the fund’s current holding. Pivot is approximately 80% net short fixed income.
Since inception in 2002, the fund is up 417%, versus a slightly positive performance for the MSCI world index.
Surprisingly the fund does not have a larger short position in Asian equities. Perhaps with large fall in Chinese equities since the global financial crisis, the firm does not find equities the best way to short China.
We also presume that the value fund cut short exposure to China recently. Over the past three months, the region contributed to over 5% of the year’s gain.