Blackstone’s Senfina Hedge Fund Down 15% After June Decline

  • Fund’s June 3.5% loss was stock-specific, not Brexit related
  • Most equity funds recovered from declines earlier this year

The Blackstone Group LP’s hedge fund Senfina Advisors has lost 15 percent in 2016 after a June decline threw cold water on the $1.9 billion unit’s attempt to make a comeback.

The June loss of 3.5 percent in the multi-manager fund was due to "stock-specific movements uncorrelated to Brexit," according to an investor update obtained by Bloomberg. The setback last month came chiefly from wrongway bets that financial services and oil and gas companies would rise while telecommunications and basic materials companies would fall.

"We expect that strategy to be a more volatile strategy," Blackstone President Tony James said about Senfina on a earnings call on Thursday. "We also expect it over time to put on higher returns and we’re still very optimistic about that business model."

Senfina, which allocates money among 11 teams, was one of last year’s top performers, gaining 21 percent and placing eighth in Bloomberg’s ranking of hedge funds with more than $1 billion. This year, it’s been unable to bounce back from a 17 percent loss in February, despite gains in April and May. All told, the fund rose 2.3 percent in the second quarter.

Paula Chirhart, a spokeswoman for Blackstone, declined to comment on the performance.

Equity hedge funds on average have recovered from losses earlier this year, cutting them to 0.4 percent in 2016, according to data from Hedge Fund Research Inc.

Blackstone, the world’s largest manager of alternative assets, oversaw $356 billion at the end of the second quarter across its products. It started Senfina in 2014. Last year, Blackstone Vice Chairman Tom Hill said he expects the fund to grow assets to several billion dollars by the end of 2016.

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