Hedge Fund Run by Zimmer Faces its First Annual Loss

  • Energy-focused ZP Utility Fund declines 8% last month
  • S&P 500 energy index drops 23% in year through September

Two hedge funds run by $1.7 billion energy-focused Zimmer Partners posted declines in September, leaving the largest pool at risk of recording its first annual drop.

The $1.2 billion ZP Utility Fund, which makes long and short bets on the equities of U.S.-based energy companies, declined 8 percent in last month, bringing returns for the year to minus 6 percent, according to an investor document obtained by Bloomberg. The fund faces the first yearly drop.

Energy bets across hedge funds are suffering after oil prices plummeted almost 50 percent since mid-2014. The S&P 500 Energy Sector Index has dropped 23 percent this year through September.

Zimmer’s long-biased ZP Energy Fund, which manages about $275 million, dropped 12 percent in September, leaving year-to-date returns down 17 percent, according to another investor document obtained by Bloomberg. The fund mainly invests in the equities of energy companies and MLPs, or master limited partnerships, that focus on electric and gas utilities and processing and production firms, the document said.

Both the utility and energy funds are run by chief executive officer Stuart Zimmer. Melanie Ashmore, the firm’s head of investor relations, declined to comment on the returns.

Zimmer is the sole owner of Zimmer Partners GP, LLC, the general partner of Zimmer Partners, which assumed management of the utility fund in December 2012, according to the letter. He co-founded Zimmer Lucas Capital, which served as the manager of the fund from its inception in 1997, the letter said.

(An earlier version of this story was corrected to remove references to the start dates of Zimmer Partners and the utility fund.)

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