Horseman Capital's Hedge Fund Said to Lose 8.7% on Equity Bets

  • Monthly loss in October was the biggest since November 2011
  • Horseman Global Fund is still up 13 percent this year

Horseman Capital Management lost 8.7 percent in its global pool in October as bets by the $2.5 billion hedge fund firm that stocks would drop turned sour, according to two people with knowledge of the matter.

It’s the the biggest monthly loss for London-based manager Russell Clark’s Horseman Global Fund since November 2011 and pares gains for the year to 13 percent, said the people, who asked not to be named because the information is private. That compares with a 0.65 percent increase in the HFRI Equity Hedge Index.

Clark has allocated most of his money to short bets over the past four years, a strategy that involves selling borrowed securities and buying them back at lower prices. While he cautioned investors last month that stocks could rally, he said he was sticking to his bets of further declines, according to a September newsletter, which has a picture of a bear at its top. 

“Recently I have seen many signs that I would normally associate with at least a short term top in the fund, or in other words, a rally in the markets," Clark said in the newsletter.

A spokeswoman for Horseman Capital declined to comment.

The fund’s biggest net short positions were in the automobile and oil sectors at the end of September. Both the MSCI World/Automobiles Index and the MSCI World/Oil, Gas & CF Index advanced more than 11 percent in October, following five straight months of declines. Clark’s fund returned 16.3 percent in 2012, 19.2 percent in 2013 and 12.6 percent in 2014, according to the newsletter.