Tudor's New Event Hedge Fund Gaining 9% Is Bright Spot for FirmBy
Paul Tudor Jones’ macro fund lost 1.2% in year through June 2
Event strategy, run by Emil Dabora, has $407 million in assets
As the strategy that made him a billionaire flounders, Paul Tudor Jones has found a new way to make money.
Jones, who’s renowned for betting on macroeconomic trends, made his first foray into wagering on companies undergoing mergers and restructurings last year. The event-driven Tudor Riverbend Crossing Partners fund rallied 9.3 percent in the first five months of 2017 in its founder’s share class, outperforming peers, according to an investor letter seen by Bloomberg News.
The new strategy is one of a series of moves by Jones, 62, to revive Tudor Investment Corp. in Greenwich, Connecticut. The founder has trimmed his staff, cut fees twice and brought on scientists and mathematicians to enhance the analytical rigor of his fund managers. Two years ago, Tudor hired Emil Dabora, the former head of developed equity markets at Harvard University’s endowment, to create an event-focused fund.
Event wagering is only a small piece of the $10 billion firm. Tudor manages $407 million under the strategy, which includes the fund’s capital and money of a "substantially similar strategy" in the firm’s flagship pool, the May 31 letter said.
But it’s providing a bit of good news for the struggling firm, which has seen assets decline since last year. Dabora’s fund beat the 5.6 percent average return on an asset-weighted basis of event pools this year through May, according to Hedge Fund Research Inc. It rose 1.7 percent in May and has made money every month except two since it started trading last June, the letter said. The strategy mainly bets on and against U.S. and European stocks of companies involved with mergers.
Tudor’s main BVI Global Macro fund continues to skid in current low-volatility markets. It has lost 1.2 percent this year through June 2 after rising 1 percent in 2016, according to another investor document. Macro funds on average are up about 0.9 percent this year through May.
Patrick Clifford, a spokesman for Tudor at Abernathy MacGregor, declined to comment.
Event managers are running the industry’s best performing strategy this year despite a slowdown in dealmaking. Over the past 12 months, merger activity in Europe and the U.S. has fallen about 20 percent from the prior year, according to data compiled by Bloomberg.
Prior to joining Harvard in 2009, Dabora spent seven years at macro hedge fund Caxton Associates, where he created its event-driven group.