Sharp declines in Chinese equities and market jitters over Greece let hedge funds to their worst monthly performance since June 2013, according to Chicago-based industry tracker Hedge Fund Research. Hedge funds lost 1.3 percent in aggregate in June, paring gains for the first half of the year to 2.4 percent. Macro funds were the biggest losers, with the HFRI Macro Index falling 2.4 percent in June, its worst monthly number since July 2008. The index is now down by 0.4 percent for the year.
Among individual hedge funds, performance was a mixed bag for the month. Larry Robbins’s New York-based Glenview Capital Management posted a 0.23 percent gain in its Glenview Capital Partners offshore fund, which is up 7.06 percent for the year. Crispin Odey’s Odey European fund, managed by London-based Odey Asset Management, netted a slight gain of 0.23 percent, but his fund was still down 13.73 percent for the year, although it has gained 1.6 percent so far in July.
East Setauket, New York-based Renaissance Technologies also reported mixed results for several of its funds. The Renaissance Institutional Equities Fund fell by 1.72 percent in June and is now down 3.42 percent for the year. Its Renaissance Institutional Futures Fund fell 2.65 percent but is up 2.68 percent for the year. The firm’s Renaissance Institutional Diversified Alpha fell by 3.39 percent for the month and is down 3.57 percent for the year.
London-based asset manager Marshall Wace showed similarly diverse results in its stable of funds. Its Europa Fund fell 0.17 percent in June but is still up 8.67 percent for the year, while the MW Tops fund fell 0.16 percent in June but is still up 5.04 percent for the year. Its MW Eureka fund fell 0.66 percent in June but is up 8.27 percent for the year. Meanwhile, MW Global Opportunities was flat in June, leaving it in negative territory for the year with a 2.18 percent loss through the month.
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SAC Capital Advisors and Point72 Asset Management veteran Paul Orwicz has joined Deimos Asset Management, a Purchase, New York-based multistrategy hedge fund firm, as a portfolio manager and managing director, the firm announced. Orwicz spent a total of 13 years at SAC and its later iteration, Point72. There, he managed portfolios focusing on the technology, media and telecommunications sector, in addition to the consumer products and energy sectors. Orwicz also managed money at Sursum Capital, which he ran from 2009 to 2011.
At Deimos, Orwicz will focus on building and managing a TMT portfolio. Deimos was formed earlier this year when its founders, who ran the Guggenheim Global Trading hedge fund platform at Guggenheim Partners, initiated a management buyout from Guggenheim. Deimos is led by Patrick Hughes, Loren Katzovitz and Mark Standish.
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Score one for Jana Partners. Barry Rosenstein’s activist-oriented fund will get two seats on the board of food giant ConAgra Foods, a current target of the firm, according to a Wall Street Journal report. ConAgra will get to keep all of its current board members, and Jana Partners has agreed to a standstill provision that will keep it from putting public pressure on the company for a year. Jana had been seeking three board seats.
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Regulatory initiatives including Basel III are changing how hedge funds have historically obtained financing from prime brokers, with the consequence that the relationship between prime brokers and hedge funds will be very different in the future from what it has been historically, according to a new report from the prime services group at investment bank Barclays. With banks now forced to increase the quantity and quality of capital underwriting their businesses, cut leverage and mitigate risks around liquidity, operational and credit issues, prime brokerage has become a less profitable business for banks than it used to be, the report notes. As a result, the profile of what makes an ideal hedge fund client has changed, and many prime brokers have plans to reduce leveraged balance sheet commitments in 2015. Because of these changes, about a third of hedge fund firms have added additional sources of funding in the past one or two years, though most are no longer worried about the availability of financing.
