Hedge funds returned 0.5 percent in April, lagging behind global stock markets for the sixth straight month.
Firms including SAC Capital Advisors LP and Jana Partners LLC posted gains, while Renaissance Technologies LLC and Greenlight Capital Inc. funds declined. Long-short equity, macro hedge funds and multistrategy managers rose.
Hedge funds trailed equities as managers took few risks, said Donald Motschwiller, chief executive officer at Discovery Capital Management LLC, a New York-based firm that runs a fund of separately managed accounts. Global stocks gained 2.9 percent, including dividends, as new U.S. home sales climbed and earnings from Coca-Cola Co. to Johnson & Johnson beat analysts’ estimates. Equities returned 9.7 percent this year through last month, compared with hedge funds’ advance of 3.2 percent.
“Hedge funds continue to be cautious in this market,” Motschwiller said. “Until the market corrects and sells off, hedge funds are just going to continue to underperform.”
The Bloomberg Hedge Funds Aggregate Index still is down 3.1 percent from its July 2007 peak. The index is weighted by market capitalization and tracks 2,457 funds, 1,219 of which have reported returns for April. The index, with annual data dating to 2006, has fallen short of the MSCI benchmark each year except for 2008 and 2011.
Long-short equity funds, whose managers can bet on and against stocks, rose 0.1 percent in April and 3.9 percent this year. Multistrategy funds advanced 0.3 percent last month and 2 percent in 2013. Macro funds, whose managers make investment decisions based on their reading of economic and political events, climbed 0.7 percent in April and 1.4 percent this year.
Steven Cohen’s SAC Capital International rose 1 percent in April and 5.6 percent this year, according to a person familiar with the matter. The fund is run by SAC Capital Advisors, the $15 billion Stamford, Connecticut-based firm at the center of a multiyear federal insider-trading investigation.
The Jana Partners fund rose 0.8 percent in April and 7 percent year to date, according to a performance update to investors, a copy of which was obtained by Bloomberg News. The $5 billion New York-based firm’s Jana Nirvana fund returned 1.2 percent last month and 10 percent this year. Barry Rosenstein is the firm’s managing partner and co-portfolio manager, along with David DiDomenico.
Renaissance Technologies, the $22 billion investment firm founded by Jim Simons based in New York, fell 2.4 percent in April in its Renaissance Institutional Diversified Alpha Fund, paring this year’s gain to 6.6 percent, according to a person briefed on the returns.
Greenlight Capital, the $8.8 billion hedge-fund firm run by David Einhorn, posted a 0.6 percent April decline in its main Greenlight Capital LP Fund, paring 2013’s increase to 5.5 percent, according to a person familiar with the matter.
Billionaire John Paulson, the hedge-fund manager seeking to reverse two years of losses in some of his strategies, lost 27 percent in his $500 million Gold Fund last month as the precious metal and related securities plummeted, and 47 percent this year, according to two people familiar with the matter. The firm’s Recovery Fund, its best-performing strategy this year, rose 6.6 percent in April and 22 percent in 2013, one of the people said. The $18 billion New York-based Paulson & Co.’s credit and merger strategies also gained last month and this year, while its event-driven funds fell in April, paring yearly advances.
Pine River Capital Management LP, the $14 billion firm based in Minnetonka, Minnesota, posted a 0.6 percent April return in its Pine River Fund run by Aaron Yeary and James Clark, bringing this year’s advance to 7 percent, the firm said in an e-mail to clients obtained by Bloomberg News.
Hutchin Hill Capital LP, the $1.1 billion New York-based firm founded by Neil Chriss, jumped 4.7 percent in April and 8.8 percent this year, according to a person briefed on the returns.
Och-Ziff Capital Management Group LLC, the $35.6 billion New York-based firm run by Daniel Och, rose 1.4 percent in April and 5.5 percent this year in its OZ Master Fund, the firm said last week in a regulatory filing. The OZ Europe Master Fund lost 0.4 percent last month and advanced 3.5 percent in 2013. The OZ Asia Master Fund climbed 4.9 percent in April and 11 percent year-to-date.
Spokesmen for the firms declined to comment on the returns.