Mary Ann Bartels Opalesque Industry Update – The $2tln hedge fund industry closed the month of March on mixed returns with some big hedge funds gaining while others lost on the back of the massive earthquake, tsunami and nuclear crisis in Japan.
Various media reports showed that the industry suffered a slump in the middle of the month following the tragedy in Japan which resulted in the decline of most stock markets across the globe.
Mary Ann Bartels, who tracks industry activity at the Bank of America Merrill Lynch was quoted by The Wall St Journal as saying, "Hedge funds had a challenging March," and added that investable hedge fund indexes that she tracked fell 0.91% last month, while the Standard & Poor's 500 index rose 0.08% rose during the month.
According to Bartels, only two strategies achieved positive results during the period. They were equity market neutral and event-driven strategies. Worst performing were long/short equity funds and CTAs.
The Credit Suisse Liquid Alternative Beta Index generated positive results in March with 1.38% gains.
Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse noted, “The Credit Suisse Liquid Alternative Beta Index, which aims to reflect the return of the overall hedge fund industry, generated positive performance in March, finishing up 1.28% for the month. All four LAB sector indices posted gains as managers profited from a number of diverse strategies which generated positive returns across both equity and credit markets. The LAB Event Driven Liquid Index remains the strongest performing index year-to date, returning 4.39%.”
Amongst the hedge funds which returned positive last month were Och Ziff Capital after four of its funds gained approximately half a percentage point during the turbulent month. The OZ Master Fund gained +-.48% (+3.36 YTD); the OZ Master Fund Ltd gained +0.36% (+3.59% YTD); the OZ Asia Master Fund Ltd gained +0.40% (+1.41%); and the OZ Global Special Investments Master Fund LP gained +0.59% (+4.62% YTD).
Och Ziff also reported a $300m increase in assets under management (AuM) to $29.0bn as of April 1, 2011.
Dan Loeb’s Third Point firm also had a good month in March after its offshore hedge fund returned 0.9% putting it up 8.6% so far in 2009.
It was reported that the performance of Third Point’s portfolios at CVR Energy (CVI) and Statoil Fuel and Retail (SFR) helped push the gains. While its biggest losers included Potash (POT) and PHH Corp. (PHH).
It was a sad month for David Einhorn’s Greenlight Capital which lost 3.4% at the end of the first quarter and -2.0% in March as compared to Standard & Poor's 500 index which 5.42% in the first quarter and lost just 0.1% during the month.