2014’s worst hedge fund performers so far
Sloane Robinson, Coupland Cardiff, Graham Capital and Discovery Capital Management were among the worst-performing hedge fund managers in the first quarter as managers with heavy exposure to Japan and quantitative investment specialists suffered.
The average hedge fund reported a gain of 1.1 per cent in the first quarter, according to HFR, the data provider, with alternative managers making their weakest opening to a year since the financial crisis.
With the Japanese stock market down 7.6 per cent in the first quarter, London-based hedge fund Sloane Robinson, a boutique founded in 1993 by Hugh Sloane and George Robinson, saw sharp losses.
Sloane’s $140m Global Japan fund and $570m Global International fund lost 17 per cent and 13.8 per cent respectively in the first three months, according to data from HSBC’s Alternative Investment Group. Coupland Cardiff, an Asia specialist, saw its $431m Asia absolute return fund lose 12 per cent over the same period.
A Sloane spokesperson said many investors have been left disappointed by the performance of the Japanese equity market. It had been handicapped by worries about the impact of tax increases on consumer spending and uncertainty over the Bank of Japan’s quantitative easing policy.
“It is unrealistic for investors to expect the major reforms being undertaken to be effective overnight and we do not expect Japan’s reflation agenda to be derailed,” said the spokesman.
Discovery Capital Management, founded in 1999 by Robert Citrone, who worked previously with the famed manager Julian Robertson, saw losses in its two main funds.
The $6bn Discovery Global Opportunities fund is down 8.4 per cent so far this year, while the $2.2bn Discovery Global Macro fund has lost 10.2 per cent.
Macro hedge fund managers that trade currencies, interest rates and stock indices based on changes in economic policy and quantitatively driven companies registered losses of 0.5 per cent and 1.8 per cent in the first quarter, according to HFR.