The $2.7 trillion hedge-fund industry posted gains of 1.1 percent in June, the biggest monthly advance in almost a year, after the European Central Bank added stimulus and the U.S. economy strengthened.
Ray Dalio’s Bridgewater Associates LP, Solus Alternative Asset Management LP, Paulson & Co. and Balyasny Asset Management LP were among firms with positive returns as managers across the investing spectrum benefited from gains in multiple markets, according to people with knowledge of the results, who asked not to be named because the information is private.
“Asset prices rallied in June across equities, bonds, credit and most commodities,” Anthony Lawler, money manager at $120 billion Swiss asset manager GAM, wrote in a report issued on July 3.
Equity, multistrategy and macro hedge funds advanced, bringing industry returns to 2.5 percent for the first half of the year, according to the Bloomberg Global Aggregate Hedge Fund Index. The gain in June was the most since July 2013 and followed two months of flat performance. Most managers are still trailing broader benchmarks with the Standard & Poor’s 500 Index gaining 6.1 percent and a Bank of America Merrill Lynch high-yield bond gauge up 5.6 percent for the first six months of 2014.
“Equities and credit are hitting all-time highs in price terms in some regions, and many managers view this as an opportune time to express long and short ideas rather than simply being directionally long,” Lawler wrote in the report.
The Bloomberg Global Aggregate Hedge Fund Index is weighted by market capitalization and tracks 2,269 funds, 1,232 of which have reported returns for June.
Stock hedge-fund strategies rose 1.4 percent in June and 2.7 percent this year. Multistrategy managers gained 1.1 percent last month and 4.4 percent in the first half, while macro funds, which can bet on stocks, bonds, currencies and commodities, advanced 0.8 percent in June and 1 percent in 2014.
Bridgewater’s Pure Alpha II, a macro fund, rose 1.6 percent last month and 7.8 percent this year, according to a person familiar with the matter. The Westport, Connecticut-based firm, founded by Dalio, manages $160 billion in assets.
Solus Alternative Asset Management LP, the $4.5 billion event-driven distressed hedge-fund firm led by Christopher Pucillo, climbed 2 percent in June and 14 percent for 2014 in its main Sola fund, a separate person said.
John Paulson’s Paulson Partners Enhanced fund gained 6.3 percent in June, bringing returns this year to 11.4 percent, according to investors. The firm also posted gains in its Recovery Fund, which rose 1.6 percent in June on gains of asset managers, insurers and hotels, and the Credit Opportunities Fund, which climbed 1.4 percent in the month on convertible securities and bank debt investments.
Balyasny Asset Management LP, the $5.8 billion hedge-fund manager run by Dmitry Balyasny, posted a 1 percent June gain in its Atlas Global fund, bringing returns in the first half of the year to 3.8 percent, according to an e-mail to investors obtained by Bloomberg News. The firm’s Atlas Enhanced fund rose 1.6 percent last month and 6.6 percent this year.
Paul Tudor Jones’ $13 billion Tudor Investment Corp. climbed 0.3 percent last month in its BVI Global Fund, paring this year’s loss to 4.1 percent, one of the people said.
Not all managers gained. MKP Capital Management LLC, the $8.7 billion hedge fund managed by Patrick McMahon, had declines in its MKP Opportunity, a macro strategy, which fell 0.9 percent last month and 5.7 percent in the first half of the year, according to a performance update, a copy of which was obtained by Bloomberg News. MKP Credit advanced 1 percent in June and 5.9 percent in 2014.
Spokesmen for the firms declined to comment on the returns.