Hedge funds gained last month as global stocks rallied on speculation the Federal Reserve may take additional steps to boost the economy and Europe moved closer to containing its sovereign-debt crisis.
Funds climbed 0.7 percent in August, according to data compiled by Bloomberg, with long-short equity, multistrategy and global macro managers rising. John Paulson, the billionaire hedge-fund manager coming off record losses in 2011, posted gains in most of his funds.
Global stocks as measured by the MSCI All-Country World Index have surged 4.8 percent since the end of July, including reinvested dividends, as Fed Chairman Ben S. Bernanke said the central bank had the ability to take additional steps to boost the economy, and speculation grew that Spain would get a bailout. European Central Bank President Mario Draghi said yesterday that policy makers have agreed on a plan to buy unlimited government debt.
“You have a temporary postponement of concern,” said Emma Sugarman, global head of capital introduction at BNP Paribas SA in New York, which helps hedge funds meet prospective investors.
Emerging markets stock funds performed best, gaining 1.5 percent in August, followed by macro funds, which bet on economic trends and rose 1.3 percent. The increase last month brought hedge funds’ gains this year to 2.6 percent. The funds are trailing equities, which rose 9.9 percent worldwide, including dividends.
The main Bloomberg hedge fund index is weighted by market capitalization and tracks 2,738 funds, 1,264 of which have reported returns for August. The index is down 10 percent from its July 2007 peak.
Paulson’s Gold Fund led gains at his firm with an 11 percent jump in August, which reduced losses this year to 15 percent, according to two people briefed on the returns, asking not to be named because the information is private. The Advantage funds, which seek to profit from corporate events such as takeovers and bankruptcies, and Paulson Enhanced, which aims to make money from companies involved in mergers, also rose last month.
Paulson’s Gold Fund, the Advantage funds, and fund share classes denominated in gold got a boost from bullion and related equities rising in August. Gold rose 4.5 percent, the biggest monthly gain since January, as Bernanke said more bond purchases are an option to aid the U.S. economy, lifting demand for the metal as an inflation hedge. The S&P/TSX Global Gold Index rose 9.3 percent including reinvested dividends in August and fell 12 percent this year.
Paulson’s Recovery and Credit Opportunities funds fell in August and remain positive for the year, the people said. The funds’ gold share classes rose last month and in 2012. Paulson & Co., based in New York, manages $19.5 billion.
Multistrategy funds returned 0.7 percent in August and fell 2.9 percent this year. Pine River Capital Management LP, the $10 billion multistrategy firm based in Minnetonka, Minnesota, posted a 1.9 percent increase last month in its Pine River Fund, which has $1.5 billion in assets and is run by Aaron Yeary, according to an e-mail obtained by Bloomberg News. The return brings gains this year to 14 percent. The firm’s assets include hedge funds, managed accounts and Two Harbors Investment Corp., a mortgage real estate investment trust.
Carlson Capital LP’s Double Black Diamond fund rose 3 percent last month and 7.7 percent this year, according to a person briefed on the returns, who asked not to be named because the information isn’t public. The $6.6 billion Dallas-based hedge fund is run by Clint Carlson.
Visium Asset Management, the $3.5 billion New York-based hedge fund, posted a 1.5 percent August gain in its Visium Global Fund, bringing returns this year to 14 percent, according to a person familiar with the matter. The fund is managed by Jacob Gottlieb.
Long-short equity funds, whose managers can bet on rising and falling stocks, climbed 0.5 percent last month and 0.8 percent in 2012.
Passport Capital LLC’s Passport Global Fund rose 0.7 percent in August and 14 percent this year, according to a performance update obtained by Bloomberg News. The $3.4 billion San Francisco-based firm is run by John Burbank.
New Mountain Vantage Advisers LLC, a $1.5 billion New York-based long-short equity fund, posted a 2.4 percent August gain in its New Mountain Vantage LP fund, bringing yearly returns to 8.3 percent, according to a person familiar with the matter. Daniel Riley and David Frost are the fund’s co-portfolio managers.
Pershing Square Capital Management LP rose 3 percent in August in its $6 billion Pershing Square International Ltd. fund, bringing gains to 6.6 percent this year, according to a monthly performance update that was obtained by Bloomberg News. Pershing Square is the $10.8 billion New York-based firm run by Bill Ackman, who is known for investing in companies to press for changes,
Spokesmen for the firms declined to comment on the returns.