Claren Road’s Credit Hedge Fund Fell 4.8% in First Half

Claren Road Asset Management, the $4.6 billion investment firm that last year posted its first annual loss, declined 4.9 percent in June in its main credit fund as global markets slumped.

The drop left the $3 billion fund down 4.8 percent in the first half of this year, according to an investor update obtained by Bloomberg. The hedge fund industry posted an average gain of 0.3 percent in June and 3.7 percent in 2015, according to data compiled by Bloomberg.

“Numerous single names across the credit spectrum nominally detracted from June performance,” the firm said in the letter. “Greece detracted a portion of the month’s returns as did GSEs, natural resources and financials,” it said, referring to government-sponsored enterprises.

Claren Road suffered from client withdrawals last year after losses on its investments in U.S.-backed mortgage companies Fannie Mae and Freddie Mac. Hedge funds including Winton Capital Management posted losses across strategies last month as uncertainty over whether Greece will remain in the euro currency group sent stock markets tumbling.

Albert Marino, chief operating officer at Claren Road, declined to comment on the returns, which were reported by Hedge Fund Alert earlier Wednesday. Claren Road is majority owned by Carlyle Group LP.

Claren Road, based in New York, was founded in 2005 by former Citigroup Inc. credit traders Brian Riano, John Eckerson, Sean Fahey and Marino. The firm lost 10 percent last year, prompting some clients to pull money.

The firm earlier this year offered fee breaks for investors in its credit fund hedge fund who lock up their money for an additional two years or commit more capital.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE