Global hedge funds are squeezing out positive performance in 2019, but continue to lag the US stock market. The Mizuho Eurekahedge Hedge Fund Index was up 4.08% on the year basis June 30 while the stock market is providing a strong beta market headwind. The MSCI ACWI (Local) was up 14.39% during the first half of the year while the S&P 500 was up 17.3%, its best first half performance in two decades and breaching an all-time highs. While hedge fund performance might look muted by comparison, individual hedge fund managers, some rather well-known, are themselves delivering record returns amid the HSBC Hedge Weekly top 20 performance list turning in some of its best half year performance in history. And near the top of this list is a familiar face.
One-time activist investor turned stock picker Bill Ackman has turned his life around on several levels. The newly married Ackman changed strategy at Pershing Square, in part, from finding potential fraudulent corporations and betting on their demise. He is now picking stocks that have been beaten down and betting on their success, as is the case with Chipotle. Investors were rushing for the exits amid a food poising scandal that sickened more than 700 customers. His buy on a drawdown strategy paid off, as the stock was up 63% at the half year point. Other meaningful wins include investments in Howard Hughes and Restaurant Brands International. Likewise, Ackman’s $1.1 billion Pershing Square Intl. Ltd is in third place on the HSBC Hedge Weekly performance list, up 32.45% and turning in some of its best half year performance in history. In 2014, a year in which Ackman was a top performer on the list, the fund returned 37.24% for the entire year. Pershing Square is significantly beating the Event Driven / Multi-Strategy Global benchmark, which is up 7.35% on the year.
Get The Full Warren Buffett Series in PDF
Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues
Q2 hedge fund letters, conference, scoops etc
In the top 20 horse race, Pershing Square was edged out by an eyelash in the June month end Hedge Weekly report. Managed Futures stalwart Cantab Capital Partners $1.1 billion Quantitative Fund – The Aristarchus was up 32.64%, taking second place and representing some of the fund’s best half year performance in their history. Cantab’s $1.5 billion Core Macro Fund, meanwhile, posted 18.27% performance, according to the HSBC report, significantly beating the Managed Futures Systematic / Global category benchmark of up 8.65% year to date. Other notable funds in the category include Sanjiv Kumar’s and Yves Balcer’s $2.9 billion Fort Global Contrarian, up 13.25% on the year, while the $720 million Diversified program was up 14.90%. The $99 million DB Platinum Quantica fund, meanwhile, was up 20.88%.
The $1.6 billion Quantedge Global Fund, which in 2018 was the worst performer on the Hedge Weekly list, down 29.19%, is currently up 26.29%, ranking 10th on the 2019 list. The Macro / Systematic Global category under which it self-reports performance is up 10.08% year to date.
The top 20 performers are all delivering above average half year results. The lowest returns on the top 20 list come from the $2.2 billion Systematic Alternative Markets Fund – Class C, which is up 18.42% and reports in the Managed Futures category. The top performer is the $110 million Muirfield GSE Partners, up 94.89% and reporting in the Event Driven, Equity Diversified / Global category. The 76.47 point spread from high to low in the top 20 is among the most diverse right skew returns distribution, while the absolute returns are among the best half year performance in the history of the HSBC report.
Other notable performers in the top 20 include the Golden China Fund, up 32.36%, Perceptive Life Sciences Offshore Fund, up 29.35%, and the Russian Prosperity Fund, up 21.01%.
This article first appeared on ValueWalk Premium