Hedge Fund Year to Date Returns

How do you stack up against the best in the business?

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Friday, September 5, 2008
Hedge Fund Year to Date Returns (Paulson, D.E. Shaw, SAC, & More)

Well, we recently got an update as to just how poorly hedge funds are performing year to date. Don't get me wrong, there are of course some standout performers. But, for the most part, they are taking it on the chin. So, if you are an individual investor getting your ass handed to you in this market.... you're not alone. Even some of the best and brightest in the game are right there with you. Hell, you're probably even outperforming some of these funds. Courtesy of the Wall Street Journal, we get a look at many notable hedge fund's performance year to date.

The Standout Performers

* $35 billion Paulson & Co: +18% ytd
* $26.3 billion Brevan Howard: +16% ytd
* $37.1 billion D.E. Shaw: +8% ytd
* $30.9 billion Bridgewater Associates: +6% ytd
* $33.3 billion Och-Ziff Capital: +0.5% ytd
* $16 billion Winston Capital: +10% ytd
* $10 billion Caxton Associates: +5% ytd
* $17 billion Tudor Investment Corp: +3% ytd
* $16 billion SAC Capital: +1.5% ytd


The Not-so Standout Performers

* $49.3 billion Highbridge/JP Morgan (Multistrat fund): -2% ytd
* $33 billion Farallon Capital: -6% ytd
* $23.7 billion GLG Partners: -14% ytd
* $13 billion Eton Park Capital: -1% ytd
* $19 billion Citadel Investment Group: -6% ytd
* $18 billion Lone Pine Capital: -8.5% ytd
* $12.5 billion TPG-Axon: -11% ytd
* $8 billion Cantillon Capital: -12% ytd
* $15 billion Atticus Capital: -25% ytd


The Slightly Mixed Bag

* $29.5 billion Renaissance Technologies: One of their funds is -1% ytd, while their signature Medallion fund is +40% ytd
* $26.9 billion Goldman Sachs: One of their funds is -2% ytd, while their Global Alpha fund is +17% ytd


And, according to Hedge Fund Research, Inc., hedge funds are having their worst year since 1990 (when they started tracking). They show that the average hedge fund is -3.43% ytd compared to -12.65% in the S&P500 and +1.05% in the Lehman Bros Bond Index.

So, results all across the board. Interesting to note though, that Atticus Capital is down 25% year to date. Just yesterday, there were rumors circulating that they were liquidating as I wrote about here. Tim Barakett, the founder of Atticus, came out and denied those rumors. The reason for such a large decline is pretty easy to pinpoint. As I've written about before, their portfolio had very heavy exposure to the likes of Freeport McMoran (FCX), Mastercard (MA), and NYSE Euronext (NYX); all of which have really been beaten down badly as of late. So, the rumors of liquidation weren't completely illogical, seeing as how the fund is down big this year. But, I want to reiterate again that they have denied the rumors that they were liquidating.

On another note, the algorithm master Jim Simons and his Renaissance Technologies Medallion fund are up big this year; very big. That's all I can really say about that, seeing as his entire operation is one giant quant enigma. D.E. Shaw & Co, fellow quant masters, are doing decently, up 8% year to date in this horrid tape.

Lone Pine Capital, managed by Stephen Mandel, (whom I frequently cover here on the blog), isn't having the best of years, but isn't getting slaughtered like Atticus is. Lone Pine is down a little over 8% year to date. You can view their most recent portfolio holdings as I analyzed here.

The "Commodities Corp Offspring," Paul Tudor Jones and Bruce Kovner have been playing the commodities markets smartly with their macro funds it seems. Jones' Tudor Investment Corp is up 3% ytd, while Kovner's Caxton Associates is up 8% ytd. With the wild swings in the commodities markets claiming the life of the Ospraie fund, I'm sure Tudor Jones and Kovner are happy to turn a profit. This year has been one wild ride, to say the least.

And, lastly, John Paulson is still kicking ass and taking names; up 18% year to date. You'll remember that Paulson correctly pegged the subprime crisis last year and profited handsomely from it.

So, there you have it. See how you stack up against some of the most revered names in the game. Some are dominating, while others are getting dominated. Welcome to the bear market.

Source: WSJ


Here's where I found the above: http://www.marketfolly.com/2008/09/h...s-paulson.html

Wow....interesting.

I am getting there.

This is what I always tell people when I bother posting to the Rookie's forum. If the most successful trader in modern history averages 20% a year... why do THEY, a nobody, think that they can consistently make that much in a month? Maybe they can, for a few months, then they lose it all? At least they have bragging rights for a couple months. Yes, it is true, some do manage to maintain that, but those are the absolute GREATEST exceptions.

As for me, I am somewhere right between Breven Howard and D.E. Shaw and rather content with that fact. The key is having money to where it means something grand to make those percentages. I know I can recreate my results year after year with a steady average, the key is to get some more money by getting a good job.

Interesting data, however it is over 1 year old. Wonder how they are doing this year???

I'd love to know too, but unfortunately I didn't find the data. If I do or if anyone else does, please post here. The above data is from 2008.

You wont find the data for 2009 as it is not complete yet.

http://www.thehedgefundjournal.com/r...ds-2009-2-.pdf

True. It'll be interesting when we see any YTD 2009.

That's why it is called a "Year to date" report. 2008 was not complete when the last report came out.

I should imagine that they are doing very well.

Because retail traders don't have to handle billions of dollars. It's ridiculous to try and compare a 5-7 figure account to 10+ figures. Give anyone here a billion dollars, and I'm sure their returns would plummet.

This quote from the article is amazing

The average hedge fund lost 15.7% in 2008, the worst performance on record
Hedge fund losses were widespread, with nearly three-quarters of funds making losses.
Among fund of hedge funds, 85% lost money.

At the time of this report, the market had only fallen a small amount. The majority of the collapse came after Sept 5

Check this out.

http://www.autumngold.com/Statistics/RankingReport.php

To be fair, managing a hedge fund carries with it some serious liquidity issues which most fx day traders do not have to deal with. Most of these funds have to trade long term, so more than 20-40% annually is tricky to manage at that size.

Good point. Apart from obvious liquidity issues trading high volumes, HFs use tiny leverage or no leverage at all. Try to achieve 20% of your account with 3x leverage. If you can do this - I will recommend you to the boss of one of the funds listed above as a standout.

the statistics 85 % losers 10% BE and 5% winner is found there too ,

n u can see the 5% winner are filled with funds with highest capitals too,

its a capital game afterall ...

LoL dont make me call you out on that, I dont use any leverage most of the time and often only 50% of the account value and I'm pretty close to your number

But something about the hedge fund industry, they just don' trade the way you and I retail traders do.. They try hard to cover their footprints because of their size, its hard to go in and out of instruments.. Thus the reason for some of the insider tip scandals going around in the industry, I mean its hard to come up with decent sized returns at that level of funds.. Often you gota be dead right and often you pay dearly if you're wrong..

Hehe, where is the causation? Do high capital firms perform better, or do funds that perform well attract more capital?

Quoting Mr J

Disliked

Because retail traders don't have to handle billions of dollars. It's ridiculous to try and compare a 5-7 figure account to 10+ figures. Give anyone here a billion dollars, and I'm sure their returns would plummet.

Ignored

Did I compare account size, or did I compare traders' abilities? Either way, I think it is fair to do both, even though abilities was stressed. I do believe it is appropriate to compare these traders with one another, after all, with the SPY fund alone on the NYSE over 20 billion dollars worth of volume is traded per day, plenty for a very large account to scale in over a week or so period. Perhaps not a Buffett size account, but multi-multi millions definitely.

What you are really trying to make it sound like is that large accounts are pretty much prohibited by their size to make huge percentages, which you couldn't be more wrong about. If you can lose it, you can make it. When Merrill Lynch's hedge fund based overseas lost something like 130% in a matter of two months, who do you believe was on the receiving end of those hundred of millions of dollars? Certainly not 5-7 figure accounts! These were massive funds betting the other direction on HIGHLY leveraged vehicles.

However, these returns can't be sustained, with 5-7 figure accounts, or with 10, 11 or however large accounts. If they are, they are the extreme exceptions, which with billion dollar accounts there are NONE! The only reason there are exceptions with small accounts is that because for every 1 billion dollar account there are probably about 1 million small ones. The odds are quite a bit higher that someone is averaging 20% a month out of that group for several years.

Just because you are a rookie or lowly funded vet trading on an ECN doesn't mean the market moves any different or you are capable of finding "extra" or hidden opportunities that the big guys can't. In fact, with preferred shares and special deals and all the rest, I would suggest that the retail trader is actually at a disadvantage for long term average gains. Nobody will ever watch their back, whereas the big guys can arrange some things, plus get a little inside info possibly.

Quoting Mr J

Disliked

Give anyone here a billion dollars, and I'm sure their returns would plummet.

Ignored

Mine wouldn't change at all, actually, it would likely go up. I wouldn't be in school fulltime with other responsibilities that kept me distracted and missing some trades. Given I only take about 1 trade a month, it is a big deal to miss just one. For earnings to drop drastically, this would mean they have to trade an entirely different way. Which means... they might not be able to trade big money successfully at all.

I wont deny that the handling of large and small accounts grows in complications as the account grows, due mostly to liquidity, but the basis of all trading and all earnings is getting in low and getting out high, or the opposite, high to low. That doesn't ever change. Of course, if you are an exceptions, please do tell. But if you aren't an exceptions... telling yourself it is more than probable you will be able to be because you are a small fish wont ever get you anywhere.

I have saved and trade about $22,000 of my own money, I don't use leverage, I have made about 11 - 12% this year, maybe a touch more with dividends and interest. Well, nah, with the US$ going down... I am probably at BE

There are some absolutely great trading groups on there. I wonder how many of the top ones will be back next year?

I don't care what you say about liquidity. Anyone running a hedge fund making less than %5 a year shouldn't be in charge of the fund. Then again they make tens of millions of dollars on a %0.0000000000001 gain so I guess they shouldn't really care anyways.

There's too many opportunities to make less than %5 in a fucking year....