In Awful Year for Hedge Funds, Scaramucci’s SkyBridge Made Money

(Bloomberg) -- As disastrous as Anthony Scaramucci’s brief turn as White House communications director was, his rebooted career in hedge funds is going much better.

SkyBridge Capital, the investment firm Scaramucci founded and now runs again, made money in one of the worst years ever for the hedge fund industry. Unaudited returns for 2018 were 3.6 percent and 4.5 percent after fees in SkyBridge’s two funds, Scaramucci said in a phone interview.

“We were well positioned,” said Scaramucci, who’s co-managing partner in charge of SkyBridge’s strategy and marketing. “I’ve got my mojo back.”

That’s an achievement, and not just because the Hedge Fund Research Inc. funds-of-funds index lost 2.3 percent over the same period. Last year started in limbo for SkyBridge and its employees. The previous year, Scaramucci had agreed to sell the firm to clear his way into the Trump administration.

In the end it didn’t matter: Scaramucci was fired in July 2017 after just 10 days in the White House and returned to New York-based SkyBridge. Then last April, the sale collapsed.

Assets Fell

“I’m back where I belong,” he said.

Scaramucci has acknowledged that his foray into politics and the uncertainty around the firm’s future was costly. In 2018, even as SkyBridge outperformed the industry, clients pulled money and assets under management dropped to $9.4 billion from $11.8 billion.

As a fund-of-funds manager, SkyBridge doesn’t invest in individual securities. Instead, it makes allocations to other hedge funds. The skill is in selecting the right strategies under market conditions and the fund managers most likely to outperform.

Ray Nolte, Scaramucci’s co-managing partner, is chief investment officer and Troy Gayeski and Robert Duggan are senior portfolio managers. Last year, Scaramucci said, they succeeded by making bets on non-traditional fixed income and certain types of bank debt, as well as by avoiding strategies with high exposure to stocks and corporate credit.

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