As January results start to roll in, the month is not looking nearly as bad for hedge funds as it was for many of the major market indices. For example, Bridgewater Associates posted decent results in January for two of its key funds. All Weather, the Westport, Connecticut firm’s controversial risk-parity fund, lost 1.14 percent, after it was down 7 percent last year. When global markets were falling and very volatile in September, Bridgewater founder Raymond Dalio stressed in a report that All Weather “is a strategic asset-allocation mix, not an active strategy.” Bridgewater’s Pure Alpha II, on the other hand, was up 0.82 percent in January. It invests in a large variety of financial markets.
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Daniel Och’s three main multistrategy funds lost money last month, but not by much. The New York manager’s OZ Master Fund fell 1.74 percent, OZ Asia Master Fund dropped 2.78 percent and OZ Europe Master Fund declined 1.85 percent. Altogether, Och Ziff Capital Management Group reported total assets under management fell by $900 million in the past month, to $43.7 billion.
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Dan Loeb’s Third Point Offshore fell 3.4 percent in January. However, this was not as bad as the Standard & Poor’s 500 index, which dropped 5 percent. The New York hedge fund’s long-short equity strategy accounted for 2.9 percentage points of the net loss, credit accounted for another 0.2 percent and an undefined “other” represented the rest of the loss. At the end of the month, the New York hedge fund raised its net exposure slightly, to 50 percent for its long-short equity strategy and to 26.5 percent for its credit strategy. All of the fund’s net-long exposure is in what it calls the Americas, versus a net-short stance in Asia and EMEA—Europe, the Middle East and Africa.
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Several investment banks raised their price targets on Alphabet, the parent of Google, after the search giant reported very strong quarterly results. Barclays hiked the target on its “A” shares from $800 to $900, noting, “Google is seeing across the board growth in core search, YouTube and Play, driving incremental growth quarter on quarter.” The bank also found impressive the 40 percent year-over-year growth in paid clicks for its Web and wiki-page creation tool, Google Sites; they were up 22 percent sequentially. Barclays retained its Overweight rating on Alphabet. Deutsche Bank lifted its price target on the “C” shares from $800 to $900, noting there are few companies in global technology with $20 billion in quarterly revenue, consistently growing more than 20 percent and seeing reacceleration—“all truly astonishing feats.”
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BlueMountain Capital Management disclosed it owns 7.4 percent of the common stock of Aerojet Rocketdyne Holdings, the aerospace and defense company formerly known as GenCorp, after converting convertible bonds. In a separate regulatory filing, BlueMountain said it liquidated its entire stake in Coeur Mining. At the end of the third quarter, the New York hedge fund owned 2 million shares of the precious-metals mining company.
