Performance – Paulson’s Advantage Funds beat peers with 1.9% gains in August (10% YTD), Bridgewater’s All Weather Fund still under weather and down 1.4% in August (-7% YTD) (Opalesque)
A $70 billion portfolio managed by hedge fund titan Ray Dalio‘s Bridgewater Associates is still struggling to overcome heavy summer losses that could lead some investors to place redemption notices in the last quarter of the year, sources familiar with the matter said on Friday. The Bridgewater All Weather Fund is down roughly 7 percent year-to-date through August, after losing 1.4 percent last month and 6.22 percent in June, according to the two people who had seen the numbers but were not authorized to speak publicly about the fund’s performance.
Lions Gate Entertainment Corp. (USA) (LGF), LinkedIn Corp. (LNKD): My Top 2 George Soros Picks (Insider Monkey)
For more than 40 years, George Soros delivered an average annual return of about 20% to the investors in his hedge fund. At that rate of return, a $10,000 investment when the fund was started in 1969 would have grown to more than $20 million when Soros closed the fund in 2011. As individual investors, we cannot hold 200 or more stocks. To overcome this problem while still benefiting from Soros’ stock-picking expertise, I developed a system that identifies stocks with high relative strength (RS) and strong cash flow growth. These two factors have been proven to be cornerstones of successful investment strategies. Using this system to find the strongest stocks in Soros’ portfolio right now, two buys are Lions Gate Entertainment Corp. (USA) (NYSE:LGF) and LinkedIn Corp (NYSE:LNKD).
China Allows Six Foreign Hedge Funds to Raise Yuan for Overseas (Wall Street Journal)
China has taken a step forward in its plan to open up its capital account and internationalize its currency with a trial program that allows foreign hedge funds to raise money denominated in yuan for overseas investment. Each of six hedge funds will be allowed to raise up to $50 million worth of yuan in China, according to people familiar with the situation. China’s regulators approved the pilot program launch in Shanghai, with six firms—Oaktree Capital Management, Och-Ziff Capital Management Group LLC (NYSE:OZM), Winton Capital Management, Man Group PLC, Citadel and Canyon Partners—getting the go-ahead, said a person familiar with the approval.
Hedge funds turn to psychology software to revolutionise trading (Financial Times)
Were you alone in a small office after a breakfast of muesli or in an open-plan space nursing a hangover when you made that brilliant trade? Some of the world’s leading hedge funds are asking these questions as they turn to psychology to delve into the minds of top fund managers to boost performance and profits. Man Group, the world’s biggest publicly traded hedge fund, is among early adopters of a software program that aims to create the perfect environment to help individual fund managers produce their best trades. Simon Savage, who runs funds for GLG Partners, a division of Man, said: “This is a groundbreaking development, which we hope will give us that extra edge in an industry that is becoming more and more competitive…”
Unfair Darwinian churn drowns small hedge funds (Financial Times)
Managers of smaller hedge funds endure the occasional bout of schadenfreude as they watch money wash into their bigger rivals. The data suggest that, hedge funds with less than $1bn can outperform on average against the industry’s behemoths. This is particularly true when large funds such as Man Group’s AHL and John Paulson’s Advantage Plus and Gold funds, encounter rough patches. But this revelation fails to deter big investors from rushing to take stakes in funds with more than $1bn to their name. As much as $26.3bn in net flows made its way into the 480 or so single-manager hedge funds with $1bn or more in this year’s first half, according to data from Hedge Fund Research, a Chicago-based tracking firm.