Wild Market Ride Gives Horseman's European Hedge Fund 15.5% Loss

  • Firm's European Select Fund slump biggest since 2005
  • Horseman's Global Fund returns 8% by shorting stocks

Equity markets’ roller-coaster ride in January whipsawed money managers at Horseman Capital Management, the London hedge-fund firm that oversees $2.8 billion, with stellar returns and record losses.

The Horseman European Select Fund, managed by Stephen Roberts, lost 15.5 percent betting shares would climb. It was the fund’s biggest monthly decline since it started in 2005, according to an investor newsletter. The firm’s Global Fund, overseen by Russell Clark, returned 8 percent during the month, with his strategy of betting on stock declines paying off as $5.9 trillion was wiped from equity markets around the world.

“Whilst markets are in such a state of flux, we feel that concentrating on the key fundamentals that drive all our investments is of paramount importance," Roberts whose fund gained 6 percent in 2015, wrote in the newsletter. “I will use this recent sell off in markets to add approximately 20 percent to my own personal position in the strategy.”

A spokesman for Horseman confirmed the performance numbers for January and the contents of the newsletter.

Clark, who manages about $965 million in the Global Fund, had net short position in financials, oil exploration and refining as well as auto stocks at the end of December, according to an investor letter seen by Bloomberg. His fund gained 20 percent in 2015, its best performance in seven years.

All of the top-10 holdings of Horseman’s European fund, led by Credit Agricole SA, Societe Generale SA and Banco Popolare SC, declined last month as global stock markets were roiled by plunging oil prices and concern that China’s slowing growth will spread. The HFRX Equity Hedge Index lost 4.5 percent.

The fund had $566 million under management at the end of last year, with about 60 percent of its net asset value in European banks, according to another newsletter. The MSCI Europe Bank Index declined by almost 14 percent in January in dollar terms.

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