As the Q3 of FY2012 has closed, let’s take a look at how a couple of hedge funds performed in the past months. The funds covered under this report are , Balestra Capital, Hawkeye Capital Management, and Providence Investment Management.
Balestra Capital Partners
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The fund is down -1.95 percent year to date, with September marking its fourth consecutive month of negative returns. Performance was down by -0.29 percent in last month. Total firm assets are now above $2.3 billion. BCP is up 16.44 percent on S&P500 and +2.68 percent on HFRXGL.
Despite losing on Gold in July, as we reported, Balestra Capital is still hopeful about the venture, and apparently the investment paid off in September. BCP thinks that Gold is well positioned, if monetary easing from central banks continues on its present pace. The fund is short on euro, some European indices and Hungarian currency forint. Forex has under-performed in September, while the best performance has been in commodities and credits.
Hawkeye Capital Management
Hawkeye is up 9.3 percent on a year to date basis, while the monthly returns for September have been +5.3 percent. The fund is short on French sovereign bonds, SPDR S&P 500 ETF, and some equities where equities take about 80 percent of the short portfolio. The top 5 short positions were down 0.4 percent in Q3. Hawkeye’s major player for Q3 was its long position in KapStone Paper and Packaging Corp. (NYSE:KS). Kapstone makes up 9 percent of the fund’s portfolio, and is its top position. Other winners are Blucora Inc (NASDAQ:BCOR) and Sonic Automotive Inc (NYSE:SAH).
Providence Investment Management
Providence, like Balestra had negative returns in September, but overall, the fund is up 11 percent for the year so far, and the returns since inception are +23 percent. In September, returns were -2.5 percent. The weak spell in Providence is attributable to its selling of mortgage based securities on low prices in last month. The fund is bearish about the future of this market, and thinks that it will plummet even further in the coming time. The yields in mortgage are really low while the prices are too high. Providence thinks that when mortgage market falls this time, not even the savvy investors, who played their cards right the last time, will be able to take cover. In the latest QE3, the Fed has affirmed its plan to buy assets that don’t exist yet, which will make matters worse in the long run, so Providence has chosen to steer clear of this section of the market.