As 2013 winds to a close, and with the S&P 500 (INDEXSP:.INX) up near 27%, top hedge fund performers on the year were primarily found in value equity plays.
Consider the SFP Value Realization Fund, a Tokyo-based firm that operates a strategy where they invest in undervalued Japanese firms and then “constructively engage management” to implement changes to unlock shareholder value. (See this article on Risk.net). The SFP Value Realization fund is up 70.05% as of December 20, ranking second on HSBC Holdings plc (ADR) (NYSE:HSBC)’s list of top performing funds just behind Senvest Partners, a long / short fund that finds value in small- and mid-cap companies and is up 73.78%. Third on the list is the Marlin Fund, which looks to find value in mispriced midcap and large-cap liquid stocks. The fund once hired a former Central Intelligence Agency operative to help them gain intelligence on various stocks, according to Institutional Investor magazine.
Perhaps the most recognizable fund manager on the list is that of John Paulson, who famously became a billionaire by short selling subprime mortgages in 2007, making roughly $3.7 billion that year. In 2011, however, the Paulson Advantage Fund fell on difficult times and was down over 40%. The Paulson Recovery Fund, which was designed to benefit from a recovering economy, now finds itself up 55.70% and the 4th best performing fund on HSBC’s list. Paulson’s Recovery Fund benefited in September from a move by Skybridge Capital’s Anthony Scaramucci, who rotated from bonds and made a $490 million investment into Paulson’s funds.
Is there a link between intelligence, knowledge and successful investing? At first glance, it might appear as if there is. Wall Street is known for only hiring the best and brightest. However, some of the world’s most successful investors didn’t attend the world’s best universities and don’t claim to have a higher than average I.Q. Read More
By Mark Melin