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 Eighteen out of 21 hedge funds and mutual funds in Trump's
portfolio lost money in 2015, and 17 of them are down so far this
year, according to public disclosures and private performance data
seen by Reuters.
The funds managed by Paulson & Co, BlackRock Inc, Baron Capital and
others lost an average of 8.5 percent last year, according to
Reuters calculations, whereas stock market and hedge fund industry
benchmarks broke even or came close to it. Trump's funds are down
another 2.9 percent so far this year, underperforming many
benchmarks again.
The performances in part reflect broader weaknesses in the investing
climate. The last 15 months have been difficult for many portfolio
managers amid volatile stock markets, tumbling oil and commodity
prices, and an economic slowdown in China.
Trump defended his holdings in an interview with Reuters, saying he
invested in the funds three or four years ago and they have done
well over time.
"I put some money with people that are friends," the New York
businessman said by phone on Monday, without naming names.
 "I have no idea if they are up or down. I just know that they have
been very good over a period of time," added Trump, the front-runner
for the Republican nomination for the November presidential
election.
Representatives for Baron, BlackRock and Paulson declined to
comment.
To be sure, some of Trump's funds have performed well this year. For
instance, Gabelli Funds' GAMCO Global Gold, Natural Resources &
Income fund, a closed-end vehicle, has gained 16.27 percent through
March 22, beating a benchmark return of 15.89 percent for natural
resource funds, according to net asset value data from Morningstar.
Another fund that Trump has invested in, the Invesco European Growth
Fund, gained 4.82 percent last year versus a benchmark loss of 5.66
percent, according to Morningstar.
Gabelli and Invesco declined to comment. Both funds are listed as
small holdings within Trump's broader brokerage accounts.
SOME FUNDS OUTPERFORMED
The 21 funds examined by Reuters were among 23 funds that Trump
disclosed last year in a July 15 filing with the Federal Election
Commission. The performance of two of the funds could not be
discerned.
The Reuters review included performance data publicly disclosed by
14 mutual funds, as well as performance data on seven hedge funds
seen in confidential fund reports or shared by people familiar with
those firms.
Trump told Reuters the funds are a tiny part of his investment
portfolio.
"I do very little hedge funds business. I for the most part don't
believe in it," he said.
The 23 funds were worth as much as $120.75 million, according to the
FEC filing, a fraction of Trump's self-proclaimed net worth of more
than $10 billion.
 While Trump selected the funds, their managers are responsible for
choosing securities to invest in and the funds' subsequent
performance.
Some investing experts who looked at Trump's portfolio and Reuters'
compilation of their performance were not impressed, saying he could
have earned better returns by investing in other hedge funds. For instance, Reuters previously reported that Millennium
Management's main Millennium International fund gained 12.65 percent
in 2015, while Citadel gained 14.3 percent in its main
multi-strategy hedge funds.
"By the looks of it, Mr. Trump's investing prowess is very
pedestrian," said Brian Shapiro, chief executive of Simplify LLC,
which tracks and analyses alternative investments like hedge funds.
"For someone who prides himself on being surrounded by the best
talent," added Brad Alford, an investment advisor and CEO of Alpha
Capital Management, "I'm surprised to see so few winners."
To be sure, some of Trump's funds that fell in 2015 have fared
better in previous years. For instance, BlackRock's Obsidian fund
has averaged annual returns of 3.39 percent over the last five
years, according to a person familiar with the performance.
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Obsidian fell 6.17 percent in 2016 through March 11, while other
comparable funds rose 0.69 percent, according to a private client
report by HSBC's Alternative Investment Group seen by Reuters.
BlackRock declined to comment.
"You can't measure it in a short time. I'm way up with BlackRock.
I'm way up with Obsidian," Trump told Reuters, without elaborating
further.
Trump disclosed a $27.6 million stake in Obsidian in May 2015, his
largest fund holding. It is unclear when Trump first invested in
Obsidian, which bets on corporate and government bonds, along with
interest rates and other securities.
Obsidian was burned by a slide in oil and other commodities,
according to a February BlackRock client note seen by Reuters.
PAULSON LOSSES
Trump's stable of funds include two Angelo, Gordon & Co hedge funds,
three Paulson & Co hedge funds, and 11 Baron Capital mutual funds.
The mutual funds are open to virtually anyone, but hedge funds are
only accessible to those that meet minimum wealth requirements,
which typically include a net worth of more than $1 million.
A representative for Angelo, Gordon & Co did not respond to a
request for comment.
Baron's billionaire founder, Ron Baron, is known for long-term bets
on companies and an optimistic world view.
Trump uses 11 Baron vehicles with different investment strategies,
including small-cap stocks, real estate and emerging markets. Nine
of the funds lost money in 2015, with one energy and resources
vehicle falling nearly 32 percent, according to data compiled by
Morningstar. Nine are down this year through March 22 with
single-digit losses.
Baron's long-term track record is better. The firm's best-known
Baron Growth Fund has gained an average of about 8.6 percent
annually over the last five years.
Paulson's funds have produced a mixed performance in recent years.
Led by New York billionaire John Paulson, the firm became famous for
its prescient bet on the collapse of the subprime mortgage market
leading up to the financial crisis.
But in 2015, the three Paulson funds used by Trump all fell,
according to data provided by an investor to Reuters. One of the
funds, the Paulson Advantage Plus fund, had declined an average of
about 22 percent every year over the last five years, according to a
confidential fund report seen by Reuters.
Trump's filing to the FEC lists myriad business ventures, including
holdings in hotels and golf properties, as well as individual stocks
such as Apple Inc, Goldman Sachs and Altria Group. (Click here for
filing:
https://www.scribd.com/doc/272297762/Donald-Trump-s-Financial-Disclosures)
Trump told Reuters his stock picks have done well recently.
"I bought them low and I sold them high," he said, referring to a
series of sales in January 2014 that netted more than $27 million.
"It was very good timing," he added. "I hit the market exactly
perfectly."
(Editing by Charles Levinson and Tiffany Wu)
[© 2016 Thomson Reuters. All rights
reserved.]
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