Hedge Fund ‘Hotels’ Sting Managers by Losing Up to 42% in Week

The cost of staying in “hedge fund hotels” has been soaring.

Hedge fund hotels -- companies in which these firms hold a combined stake of at least 25 percent -- suffered declines of as much as 42 percent in the recent stock market rout. Below we highlight the five biggest such losers in the past week among companies with at least $1 billion in market value, a period in which the Standard & Poor’s 500 Index fell 10 percent. One caveat: the firms’ holdings are generally as of June 30 and may have changed.

* Jumei International Holding Ltd.

The online cosmetics retailer’s American depositary receipts plunged 42 percent in the past week as the Chinese company issued sales guidance that was short of analysts’ estimates. Jumei has also been hit by a slide in U.S.-listed shares of Chinese companies after the People’s Bank of China devalued the yuan on Aug. 11. That’s bad news for hedge funds, which owned about 30 percent of ADRs listed in New York.

Biggest U.S. hedge fund holders: Discovery Capital Management and Ardsley Advisory Partners

The firms didn’t immediately respond to requests for comment.

* SunEdison Inc.

Shares of the world’s biggest clean-energy developer were up 65 percent this year at the peak in June. The company has erased those gains and then some, plummeting 27 percent in the past week alone. Even forming an investment vehicle with Goldman Sachs Group Inc. worth $1 billion hasn’t stalled a decline in SunEdison’s stock that baffled analysts earlier this month. Hedge fund firms held a combined 48 percent stake in the company.

Biggest U.S. hedge fund holders: Greenlight Capital, Third Point and Glenview Capital Management

Spokesmen for Greenlight and Glenview declined to comment. Third Point didn’t immediately respond to a request for comment.

* California Resources Corp.

The shares dropped 27 percent in the past week as the company’s bonds also declined. The oil producer has been under pressure from falling crude prices. Hedge fund firm BlueMountain Capital Management said in June that CRC’s common stock was “worthless” and its debt would have to be restructured. Hedge funds owned 30 percent of the shares as of the second quarter.

Biggest U.S. hedge fund holders: Soroban Capital Partners, RR Partners and Cyrus Capital Partners

The firms didn’t immediately respond to requests for comment.

* Atara Biotherapeutics Inc.

The drug developer that went public in October lost 24 percent in the past week. Shares of the company, which have gained 43 percent this year, have been sliding since the company reported second-quarter earnings that missed expectations on Aug. 6. Hedge funds owned 26 percent of the stock.

Biggest U.S. hedge fund holders: Baupost Group, Visium Asset Management, Bridger Management

Baupost and Visium declined to comment. Bridger didn’t immediately respond to a request for comment.

* Whiting Petroleum Corp.

The shares have fallen 55 percent this year, including 21 percent in the last week as the price of oil has plunged to fresh lows. Whiting, the largest energy producer in North Dakota’s Bakken shale region, trimmed plans for this year’s capital spending when it announced second-quarter earnings results on July 29. Hedge funds owned 33 percent of the company.

Biggest U.S. hedge fund holders: Paulson & Co., Citadel and Viking Global Investors

Paulson and Citadel declined to comment. Viking didn’t immediately respond to a request for comment.

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