Horseman Hedge Fund Gains 7.4% on Shorts Amid Wild Brexit Swingsby
Horseman Capital Management’s biggest hedge fund gained 7.4 percent over the last week, profiting from bearish stock bets as Britain’s vote to exit the European Union roiled global equity markets, according to a letter to investors seen by Bloomberg.
The return lifts Horseman Global Fund’s gains for the month to 10.4 percent and 6.5 percent through June 29 this year. The $1.9 billion hedge fund strategy managed by Russell Clark bets on rising and falling shares and was down 3.5 percent in the first five months of the year. A spokeswoman for the London-based investment firm, which oversees $2.7 billion, declined to comment.
The shock vote in favor of Brexit sent share prices tumbling on Friday, erasing trillions of dollars from the value of global stock markets. Equity-focused hedge funds were hit the hardest among peers, losing more than 2 percent on June 24, according to a HFRX index.
Clark held net equity short exposure of 99.7 percent at the end of May, according to an earlier newsletter sent to clients, and profited from the selloff. Shorting involves selling borrowed securities and buying them back at lower prices. Net exposure is the difference between a fund’s long and short investments.
Separately, Horseman’s European Select Fund gained about 5.5 percent in the seven days to June 29, cutting year-to-date losses to 24.5 percent, Thursday’s letter shows.