Various hedge fund developments. Jeff Banfield, Waratah, XIB, Avner Mandelman, and other artists!
I met a top Bay Street hedge fund manager a long time ago. He told me that all he cared about was how well he did and how much he could brag about it. He said that performance should be more important than asset growth (AUM). I thought you said it well. And in the more than a decade I’ve been following him, he has lived up to his motto: his performance has been bad, but the growth of his assets has been even worse.
Here are some more developments on your performance. This time, I’ll talk about more good news. I call everyone I care about “Blind Squirrel” (from the expression “Even a blind squirrel finds a nut once in a while”).
XIB is a brand-new fund that is run by Sean McNulty, Chris Seyffert, and Peter Hatziioannou. They just started in August, and so far they are up 10.30% (up 1.85% in March). They say:
The Fund’s performance for the month was mostly due to taking advantage of index and ETF trading flows, making defensively hedged pair trades when there was an opportunity, and finding good entry points in some M&A arbitrage spreads.
The Polar Multi-Strategy fund is down 2.6% so far this year, while the Long/Short fund was up in March and is down 0.7% so far this year.
The numbers for Waratah Performance are in, and the fund went up 1.8% in March and 4.1% for the year. But that isn’t much. Just in the last week, Avner Mandelman’s number of Twitter followers grew by 29%. @BradDunkley, you are wrong.
Avner used to run a hedge fund called Giraffe Capital that was based in the US. I wrote him once because, like him, I had to deal with paperwork for a US car while living in Canada. But he didn’t answer. Now that he’s using Twitter, I’ve started to follow him and have liked some of his Tweets.
But he didn’t come after me! Cold! But I can promise you that OPM Wire is not a place to air small complaints. If he keeps growing at the rate he is now, Avner will have 46 followers on Wednesday.
You can’t expect a hopeless fool like me to keep track of credit funds, but I’ve heard that RPIA has a fund that’s down about 30% YTD. One of Algonquin’s funds is down 16% so far this year. I don’t know if that’s good in their world or not.
The HGC Arbitrage Fund lost 4.82 percent in March and is up 1.45 percent for the year. When I quickly look at how much money they’ve made since the middle of 2013, it looks like a real arb fund (ie small, steady numbers). But I don’t really know much about them, except that Brett Lindros works for them and I have his rookie card somewhere.
Some of the worst numbers I’ve seen are from Pender Fund of Vancouver, which has lost between 33% and 40% YTD. Last year, they got some money from Vertex One, which seemed to be going out of business. The people at Vertex One said they were careful to find a partner who thought like they did.
It looks like they did well. One of the rationales offered for merging funds was the possibility of exploiting accumulated tax losses. It turns out that Pender is also good at making those naturally. So Vertex One looked for a partner all over the country and by chance found one right down the street.
I heard their conference call when this happened, and Pender’s ideas seemed pretty simple to me. “David is a real contrarian,” for example. It makes no sense and has a flaw in logic. The crowd is often right! In 2020, the game is very competitive, the insights need to be really sharp, not generic fluff like that. You people seem to enjoy anger, so I hope you’re happy.
I can tell that Google takes me seriously because:
On the other hand, I can’t be blamed for the second entry, and that’s probably not fair at all. The Banfield fund did well in March, going down by only 1.91%. The way a manager writes always says a lot about how he or she thinks. From Banfield’s February newsletter, here’s a passage:
The fund gained between 0.50% and 1% for the month until the last day, when investors could only sell gold stocks. We’ve seen that when the economy is in trouble, everything is connected, and gold is no different. When people sold gold that day, they also sold gold stocks, which caused the fund to have a small loss. Let’s be clear: we had great gold companies, but we were short gold and had bad gold stocks. After that, we got out of this position.
I like how Universa uses a Decennial Letter. Talking about ephemera doesn’t sound smart unless you’re an expert like me.
In January, they thought the market would go down.
We don’t want to play a game where we buy stocks with high PE multiples and little sign of growth in the future and then try to sell them at even higher PE multiples in the future.
People with a bad attitude would ask if he has any privates and how much they cost, but I say let him enjoy his success. My article about Jeff Banfield wasn’t very reverent. Did I make a mistake? Is Jeff Banfield, who used to hang out with people like Salida and Leeward, the next George Soros? Don’t worry, faithful reader. These hard questions will be answered as time goes on. I like our chances! In the world of hedge funds, many people get calls, but most of us have the wrong number.
Read more work here.
