Viking, Coatue Back in Black After April Gain: Hedge Fund Update

(Bloomberg) -- April, another month of widespread quarantines and social distancing, presented hedge funds with a different kind of market upheaval.

Equities were less volatile than in March, with the S&P 500 Index rebounding to an almost 13% gain, its best month since 1987. But company earnings began to show the weight of reduced consumer spending. Forecasts turned increasingly uncertain. Nationwide job losses deepened, as more than 30 million Americans filed for unemployment benefits. And for the first time, oil prices went negative, meaning traders were briefly paying people to take it off their hands.

For a look at how hedge funds are faring amid the crosscurrents, here are some of the winners and losers.

Key Developments:

  • April gains push Viking and Coatue back into the black
  • Citadel’s gain of 4% is its best monthly performance in five years
  • Ackman, Loeb funds saw gains last month amid the stock surge
  • April turnaround lifts Tiger Global Management to a year-to-date gain
  • Hohn’s TCI hedge fund rebounds with 13% return after record loss

Viking, Coatue Back In Black After April Gain

Tiger Cubs Andreas Halvorsen and Philippe Laffont are having a much better month. After their respective hedge funds Viking Global Investors and Coatue Management lost money in the first quarter, gains in April have pulled both funds back into the black.

Viking’s hedge fund made 6.2% last month, bringing returns for the year to 6%, according to people familiar with the matter. Meanwhile, Coatue’s hedge fund jumped 9.8% in April, helping end the first four months of the year up 0.4%, a person said.

Here’s a look at how other equity hedge funds have fared, according to people familiar with the returns:

  • Jim Simons’s Renaissance Technologies saw its quantitative equity hedge fund rise 1.9% last month. The Renaissance Institutional Equities Fund, which only trades U.S.-listed stocks that its computer models expect to rise, is down nearly 13% this year.
  • Falcon Edge Capital’s Global Fund posted a nearly 17% gain in April and is up 8% for the year through then. The firm manages $3.2 billion.
  • Cadian Capital Management, which runs $2.2 billion and focuses on the technology, media and telecommunications sectors, notched an 18% gain in April, taking returns for the year to 19%. Long wagers in e-commerce, media and cybersecurity drove performance.
  • Clearfield Capital Management, the $300 million fund run by former Kingdon Capital Management executive Phil Hilal, gained 18.7% in April, helped by bets on quick-serve restaurants. The fund is up 4.3% this year through last month. .
  • Brahman Capital’s equity fund, Brahman Partners II, jumped 9.4% last month. That brings its year-to-date performance as of month-end to 7.8%.

Representatives for the firms declined to comment.

Griffin’s Citadel Outperforms Its Multistrategy Rivals in April (3:37 p.m. NY)

Ken Griffin’s Citadel beat its peers in April, gaining 4% in its best monthly performance in more than five years, according to a person with knowledge of the matter.

That compared with returns of 3.1% for Balyasny Asset Management, 3% for Millennium Management and roughly 2.5% for Steve Cohen’s Point72 Asset Management, other people said, asking not to be identified because the information is private.

Multistrategy funds trade across asset classes from stocks and bonds to commodities and currencies. After a tumultuous March, April saw more stability in equity markets. The Bloomberg Barclays Global Aggregate Bond Index also bounced back, rising 2% last month.

Among other firms, ExodusPoint Capital Management gained about 1.7% in April and Cinctive Capital Management rose roughly 1.3%. The flagship fund at $5.4 billion Hudson Bay Capital Management advanced 1.5%, people said.

Here’s how the multistrategy funds compare:

Viking, Coatue Back in Black After April Gain: Hedge Fund Update

In other multistrategy news, Balyasny hired financials portfolio manager Ying Hua from Citadel for its San Francisco office, as well as Luke Sager, who was previously at PointState Capital, as a New York-based portfolio manager focused on the technology, media and telecommunications sectors, a person said. Sager starts in August.

Representatives for the firms declined to comment. Sager didn’t immediately respond to a request for comment. Hua couldn’t be reached.

Ackman, Loeb See Gains Last Month as Stocks Rise (1:48 p.m. New York)

Hedge funds run by Bill Ackman and Dan Loeb rose in April as U.S. stocks saw their largest monthly gain in more than 30 years.

Viking, Coatue Back in Black After April Gain: Hedge Fund Update

Ackman’s publicly traded Pershing Square Holdings Ltd. jumped almost 14%, bringing returns for the year to 17%, according to a document on its website. Meanwhile, Loeb’s Third Point Offshore Fund jumped 7% last month, shaving losses this year to about 10%, a separate document shows. Loeb’s Third Point Ultra Fund was also up in April, surging 9%, according to a person familiar with the matter. The fund is down about 14% for the year.

Representatives for Third Point and Pershing Square Capital Management declined to comment. The New York-based firms manage $12.7 billion and $8.1 billion, respectively.

In March, Pershing Square made a $2.5 billion recovery bet on the U.S. economy, increasing investments in portfolio companies including Lowe’s Cos. and Warren Buffett’s Berkshire Hathaway Inc.

For Loeb’s Third Point Offshore Fund, winners in the month included auto marketplace IAA Inc, Inc., electronics conglomerate Sony Corp., Baxter International Inc. and Prudential Plc. It’s a turnaround from the first quarter, when wagers on Prudential and Sony, among others, helped drag down returns.

Chase Coleman’s Tiger Global Gains Almost 10% in April (12:03 p.m. New York)

Chase Coleman’s $36 billion Tiger Global Management rose an estimated 9.7% in its hedge fund last month, according to people with knowledge of the matter.

That still fell short of the broader U.S. stock market, which rallied 12.8% with dividends reinvested.

Nonetheless, it’s an about face for the equity-focused fund, which had lost almost 6% in the first quarter. Now it’s up about 2.5% for the year, said one of the people.

A spokeswoman for the New York-based firm declined to comment.

Hohn’s Hedge Fund Rebounds With 13.4% Gain After Record Loss (6:58 a.m. New York)

Billionaire activist investor Christopher Hohn’s hedge fund staged a comeback in April as the rising stock market lifted some of his big bets.

The Children’s Investment Fund, which builds stakes in companies and pushes for changes to boost their share prices, gained 13.4% last month, according to people with knowledge of the matter. That’s slightly ahead of the increase in the S&P 500 index.

Hohn’s April returns were a big turnaround from the previous month, when his fund suffered its steepest-ever monthly decline as the coronavirus outbreak rocked global markets. The rebound shaved losses this year to about 12.8%, said the people.

A spokesman for the London-based investment firm declined to comment.

TCI, which managed about $30 billion before it lost money in March, runs a concentrated long-biased portfolio, which tends to do well in a rising market but suffers when stocks decline. Among its wagers that paid off last month were those on Charter Communications Inc., Alphabet Inc. and Microsoft Corp.

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