Hedge funds posted small gains in July but lagged the broader market because many managers played it safe after market tumult in May and June took a bite out of their portfolios, according to data released Friday.
The average hedge fund gained 1.9 percent in July after losing 1.35 percent in June and falling 3.01 percent in May, consultants at Hennessee Group found.
The broader Standard & Poor’s 500 index climbed 6.88 percent last month.
July’s performance left hedge funds with a gain for the year of 1.87 percent, while the broader market was down 1.21 percent.
Some of the best-known and most closely watched hedge fund firms turned in strong performances in July, after a few tough weeks when fears about the U.S. economy and Europe’s expanding debt crisis sent markets tumbling.
Kenneth Griffin’s flagship funds at Citadel Investment Group rose roughly 4 percent last month, an investor familiar with the fund said. The funds are still off 3 percent for the year. They stormed back to huge gains in 2009 following heavy losses in 2008 when the industry posted its worst-ever performance.
Steven Cohen’s SAC Capital Advisors, one of the world’s biggest hedge funds with $12 billion in assets, reported a 3.7 percent gain in July, according to an investor.
Peter Thiel’s Clarium Capital Management, which makes big bets on broad economic themes, posted a 5 percent gain in July after months of seeing assets shrivel amid poor returns, an investor said.
Stephen Mandel, known as one of the original Tiger Cubs who spun out of Julian Robertson’s successful firm, posted a 5.5 percent gain in July at Lone Pine Capital, leaving him up 2 percent for the year, an investor said.
Harbinger Capital Partner’s Blue Line Fund, which specializes in distressed credit and started with a bang when it gained 9.45 percent in its first month of trading in April 2009, was up only 0.5 percent in July, according to an investor.
Harbinger founder Philip Falcone’s flagship Harbinger Capital Partners Offshore fund was off 10.7 percent through the first two weeks of July, industry data show. Falcone ranks as one of the industry’s worst performers for the year, according to HSBC Private Bank.
Because hedge funds are not required to release their returns or asset size to the public, any numbers that come out are analyzed carefully for clues on how the $1.6 trillion industry is performing.
Other firms that also collate performance data, including Hedge Fund Research, are expected to report their monthly performance data later on Friday and early next week.
