How Did Hedge Funds Do In October? The Numbers Are A Bit Confusing

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How Did Hedge Funds Do In October? The Numbers Are A Bit Confusing
Leroy_Skalstad / Pixabay

An update from Crescat Capital shows they had a fantastic October, but many hedge fund return stats were  less impressive.

Third Point’s Dan Loeb which has been  dueling with Cambell Soup had a rough month down 6.7 percent or so.

Bill Ackman’s Pershing Square Capital which had been mounting a comeback year, put up awful number of -8.4 percent.

Corsair Took A Hit From Small-Cap Underperformance In Q3; Says Evergrande Not The Next Lehman Brothers

Corsair CapitalCorsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More

Bearish hedge fund JHL Capital which is a personal holding of Seth Klarman’s foundation had a rough month.  The fund was down 3.7 percent according to an investor update seen by ValueWalk, wiping out year to date gains.

Stanphyl Capital had a rough month – their October letter to clients states the following regarding hedge fund return numbers:

For October 2018 the fund was down approximately 7.0% net of all fees and expenses. By way of comparison, the S&P 500 was down approximately 6.8% while the Russell 2000 was down approximately 10.9%. Year-to-date the fund is down approximately 15.5% while the S&P 500 is up approximately 3.0% and the Russell 2000 is down approximately 0.6%.

Since inception on June 1, 2011 the hedge fund fund return is approximately 68.8% net while the S&P 500 is up approximately 135.5% and the Russell 2000 is up approximately 97.3%. Since inception the fund has compounded at approximately 7.3% net annually vs 12.2% for the S&P 500 and 9.6% for the Russell 2000. (The S&P and Russell performances are based on their “Total Returns” indices which include reinvested dividends.)

If you’ve been reading my letters, you’re undoubtedly thinking “Hey, this guy’s been bearish all year and this month he was finally right in a big way yet he still lost money. What the heck is going on?” The short answer is: all our bearish bets worked except one, and that one was Tesla which soared on a completely unsustainable earnings report.

On the other hand, Alpha Wealth Funds does nto have full numbers yet, but their Theta Fund had positive returns in October, according to an email to investors.

Also on the positive end, Greenlight Capital had a good October.

Stay tuned for more numbers as we get them. Below is Crescat’s investor update on their October:

With the close of month, we are happy to share October estimated performance results for Crescat Capital. Our flagship Crescat Global Macro fund returned an estimated 17.5% during the month of October and now sits at an estimated 28.7% YTD. Compared to 3% YTD for the S&P 500.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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