Hedge funds posted their biggest monthly loss in more than a year after signs that the U.S. Federal Reserve may scale back its unprecedented stimulus triggered a selloff across global markets.
Hedge funds lost 1.4 percent in June, the most since May 2012, paring the gain in the first six months of 2013 to 1.4 percent, according to data compiled by Bloomberg. Hedge funds that use computer models to decide when to buy and sell securities slumped 6.3 percent last month, extending losses for the year to 7.1 percent, and emerging-market stock funds declined 6.6 percent, leaving them down 9.7 percent in 2013.
Hedge funds have trailed the MSCI All-Country World Index for five of the past seven years as managers have struggled to predict markets amid intervention by central banks across the globe. Funds overseen by John Paulson, Jamie Dinan and Barry Rosenstein reported declines in June, as comments by Fed Chairman Ben S. Bernanke spurred declines in stocks, bonds, currencies and commodities worldwide.
Global equities posted the biggest two-day retreat in 19 months after Bernanke’s June 19 comments that policy markers may start reducing its bond purchases if the economy meets expectations.
Paulson Credit Opportunities dropped 3.7 percent last month, paring its gain for the year to 12 percent, according to a performance update sent to clients of New York-based Paulson & Co., which oversees $19 billion.
York Capital Management LP, the $15.5 billion New York-based multistrategy hedge fund run by Dinan, fell 1.9 percent in June and rose 17 percent this year in its York Select fund, according to a performance update obtained by Bloomberg. Mary Beth Grover, a spokeswoman for York, declined to comment.
Jana Partners LLC’s Jana Partners fund fell 1.3 percent last month and rose 10 percent year to date, according to a performance update to investors, a copy of which was obtained by Bloomberg News. The $5.7 billion New York-based firm’s Jana Nirvana fund decreased 1.7 percent in June and climbed 16 percent this year, according to the update. Rosenstein is the firm’s managing partner and co-portfolio manager, along with David DiDomenico. Charles Penner, a partner at Jana, did not respond to a request for comment.
Some funds managed to post gains. Passport Capital LLC’s Passport Global fund rose 1.9 percent in June and 10 percent this year, according to a performance update to investors obtained by Bloomberg News. The $3 billion San Francisco-based firm is run by John Burbank. Steve Bruce, a spokesman for Passport, declined to comment on the returns.
New Mountain Vantage Advisers LLC, the $1.9 billion New York-based long-short equity hedge fund, posted a 1 percent June gain in its New Mountain Vantage LP fund, bringing yearly returns to 11 percent, according to a person familiar with the matter. Daniel Riley and David Frost are the fund’s co-portfolio managers. Patrick Clifford, a spokesman for the firm, declined to comment on the returns.