Mandrill multi-strategy fund outperforms hedge fund indices in Q3 on long stressed credits and long equity positions

The multi-strategy fund run by New York-based Mandrill Capital Management has widely outperformed a number of hedge fund indexes for the last 18 months, and its performance even picked up in the past two months. However, it has been lagging both the S&P and High Yield indices.

The Mandrill Capital Master Fund, a BVI-domiciled fund which currently manages $1.3m, is currently featured in Opalesque Solutions' Emerging Managers Database.

In an interview with Opalesque, Mandril's Chief Investment Officer Gaston Bullrich said that the fund was up 13% YTD as at end Q3 (+4.1% in August and +3.6% in September) versus its benchmark the S&P 500, which closed +16.4% and the ML High Yields at +14.0% YTD to September. Launched in January 2009, the fund returned 72% that year, 17% in 2010 and -8% in 2011.

Mandrill establishes an overall macroeconomic view based on current and projected macroeconomic trends. It then selects credit securities from global credit markets focusing on large issuers where the manager's research and experience indicate that the security's probability of default is lower/higher than what markets are pricing. Equity securities are selected by using proprietary screens that include technical and fundamental factors that have shown historical positive expected returns.

The main contributors to the fund's recent positive gains were long stressed credits and long equity positions. Within the fixed inc......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.