Balestra Capital Partners, L.P fund was down 1.5 percent in July, which is slightly better than the -2.66 percent returns in the month of June, while the year to date returns till the end of July were -1.57 percent. The hedge fund gained 11 percent on the S&P 500 in the month of July, up from 9.49 percent in June. The strategy assets amount to $2.1 billion, total firm assets are $2.36 billion, up from $2.35 billion in June.
The fund was down in all of its major strategies during the month, the major losers were short side investments in equities and foreign exchange, and lost on the long side of commodities like Gold. BCP gained moderately in corporate bonds, real estate trusts, and US high yield bonds.
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The fund managers at BCP note that the best performing market on the global front has been the US economy so far. However there are several factors that are still not in favor of the US, GDP was revised to reflect a lower value and although earnings were better than expected, one should note that most of the earnings estimates were also revised. As China, Japan, and most of all, Europe has slowed to a standstill and the prospects of recovery seem weak, US markets look like the best option for investment.
Recently commodity prices have rallied especially in the case of rice and corn which lead to aggressive selling. On the other hand, China, the largest exporter and the essential workshop of the entire world, is still facing an industrial meltdown and has suffered through significant decline in sales during the past months.
Balestra is continuing with its bullish position on Gold assets and is still expecting a huge upswing in price. The fund observes that fixed returns on high yield bonds and treasury notes have consistently followed a downward trend and expects equities to gain more investment in the coming quarters.
BCP is heavily invested in Cash equivalents (up to 73 percent of NAV), commodities like precious and base metals (up to 10 percent), and credits and bonds (up to 12 percent).