|
 Adrangi, whose $350 million Kerrisdale Capital is still up 10
percent so far this year, stands with several other well-known hedge
fund managers in saying they're staying the course in U.S. equities
markets, including Leon Cooperman's Omega Advisors and Larry
Robbins' Glenview Capital. Omega has lost 11 percent this month and
Glenview is down 5.5 percent.
Still, "we are not getting a signal from the corporate sector or our
analysts that there has been any deterioration in outlook," said
Steven Einhorn, a partner at Omega Advisors, who said his firm
believes stocks will rebound.
While that view may not be shared by investors whose fortunes depend
on such things as the price of oil or the health of the Chinese
economy, most hedge fund managers contacted by Reuters remain upbeat
about prospects for U.S. stocks even after the Dow tumbled 3.6
percent and the Standard & Poor's 500 index dropped 3.9 percent in a
single day. For the year, the Dow is down almost 11 percent and the
S&P 500 has lost 8 percent.
Helping accelerate the recent slide, many hedge funds' in-house risk
managers have been ordering traders to sell to curb losses during
the turbulence. And analysts at Bank of America estimate that hedge
funds specializing in stock investments have recently cut their net
long exposure to 35 percent from 39 percent.
For some, the selling frenzy indicates how at least part of the
investing public is inclined to panic, said David Tawil, who runs
Maglan Capital, a hedge fund with about $75 million in assets under
management.
"This is like a runaway train and it speaks volumes to the
temperament of today's market participants," Tawil said.
Meanwhile, Jeffrey Gundlach, co-founder of DoubleLine Capital, one
of the most successful fixed-income fund companies, warned that the
sell-off may not be over.
"The market is wounded and it takes time for people to get around to
feeling good again," Gundlach said in a telephone interview with
Reuters. "You don't correct all of this in three days."
Hedge funds' month end performance numbers are expected in about a
week and so far, investors in these funds have shown little taste
for racing for the exits. At the same time, managers are not going
out of their way to soothe frayed nerves with special calls or
intra-month reports.
MUTUAL FUNDS
Unlike hedge funds, which lock up their investors' capital for
months at a time, mutual funds have to redeem their investments
immediately if their investors, usually people saving for
retirement, want out.
[to top of second column] |
Mutual fund Longleaf Partners, run by Mason Hawkins, whose holdings
include Chesapeake Energy and Wynn Resorts, is down 16.22 percent so
far this year.
While it's not known whether Longleaf has suffered outflows this
year, that sort of performance may have accelerated investor exits
from U.S. stock funds in August, after clients had already pulled
$79 billion out in the first seven months of 2015, marking the
fastest annual outflows since 1993.
Hedge funds meanwhile took in $64.3 billion in new cash in all types
of strategies in the first seven months of the year.
Some of that cash has flowed into so-called global macro funds that
bet big on currencies and recently increased their bets on 10-year
U.S. Treasuries, seen as a haven in times of market stress.
Global macro funds rose 0.17 percent for the year through the end of
last week while the average stock hedge fund was down 0.16 percent,
according to data from Hedge Fund Research.
The Balter Discretionary Global Macro, subadvised by Willowbrook
Associates' Phil Yang, gained 1.09 percent in August, partly on a
bet that oil prices would keep falling.
Macro funds returned 5.5 percent in the first half of the year,
prompting investors to add $8.5 billion in new money alone in July,
data from eVestment show.
(Additional reporting by Jennifer Ablan.; Editing by Carmel Crimmins
and John Pickering)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
