WHAT ARE WE LOOKING FOR?
The stock market meltdown has been brutal. Resource stocks have been hurt by falling commodity prices. Many securities are getting hit as managers sell them to meet redemptions or margin calls.
Because hedge fund managers often pursue absolute returns in all markets and get paid fat fees to outperform, we'll take a look at those facing the roughest time.
We checked returns of funds in the alternative strategies category to this Thursday. While some are valued daily, weekly or monthly, we refer to the latest number. We excluded the U.S.-dollar and other versions of the same fund, and exchanged-traded funds.
To put this in context, the S&P/TSX composite index was off 15 per cent this year to Sept. 30, and 33 per cent until Thursday. The S&P 500 fell 21 per cent for the first nine months, and 36 per cent until Thursday.
WHAT DID WE TURN UP?
Lots of pain.
Some hedge funds have racked up staggering losses.
DeltaOne Energy Fund, run by Peter Linder, plunged nearly 99 per cent as of Oct. 10 with nearly two-thirds of the loss coming last month as the price of oil fell sharply. His DeltaOne Strategic Energy is also down 65 per cent.
Dynamic Power Emerging Markets and Dynamic Power Hedge run by Rohit Sehgal have respectively, tumbled 70 and 60 per cent as of Oct. 10. Those funds, which rode the bull markets in developing countries and resources, have been hurt by their collapse.
Ravi Sood's Lawrence Partners Fund, which invests in smaller Canadian companies, has plummeted 57 per cent for the first nine months. The fund lost a stunning 48 per cent of its value in September.
Arrow Goodwood and Goodwood Fund-B, which are run by value investor Peter Puccetti, were each down 47 per cent by Oct. 10. His record indicates he has weathered bad markets to fight another day.
In 2002, Arrow Goodwood lost 19 per cent, but came roaring back with a 28-per-cent gain the next year.
"When the forced selling subsides, we fully expect snap backs on many of our positions," Mr. Puccetti said in his September commentary to investors. "Unfortunately...we have no idea when the credit crunch and de-leveraging phase will run its course."
Worst 30 Alternative Strategy Funds
|(as of Sep. 30 '08)||Last reported||YTD*||Sep. '08||Annualized % return|
|Fund name )||Assets ($-mil||MER||NAV date||% rtn||% rtn||2007||2006||2005||2004||2003||2002|
|DeltaOne Energy Fund LP||10/10/2008||-98.7||-59.0||-76.1||-76.4||56.4||2.4||25.9|
|Dynamic Power Emerging Mkts||41.5||11.24||10/10/2008||-69.5||-28.1||40.6||51.7|
|DeltaOne Strategic Energy||10/10/2008||-65.2||-20.0||1.3||-30.5||120.4||-5.0|
|Dynamic Power Hedge Fund-F||263.9||13.94||10/10/2008||-60.4||-25.6||38.6||71.5||73.0||24.9||101.5|
|Front Street Mining Oppor. F||5.6||10/9/2008||-58.5||-25.8||18.2||56.8|
|Arrow U.S. Equity Income||38.0||10/10/2008||-56.9||-19.0|
|SciVest Oil Sands Index PLUS-A||10/10/2008||-50.9||-27.1||17.9|
|Webb Cdn. Performance Fund||10/16/2008||-45.0||-18.1||21.3|
|Salida Multi-Strategy Hedge||118.0||9/30/2008||-43.6||-24.7||35.8||87.4||34.3|
|Horizons Northern Rivers Fd LP||9/30/2008||-39.3||-14.9||-3.3||102.3||15.8||6.7|
|Arrow WF Asia||24.9||10/10/2008||-38.6||-13.4||30.3||18.6||15.4||14.4||41.3||-2.2|
|Arrow Epic Capital||43.1||10/10/2008||-38.6||-14.1||15.9||28.5||26.6||16.7||65.2||19.8|
|Epic Limited Partnership||78.6||9/30/2008||-37.9||-13.7||11.3||24.8||22.0||19.3||66.3||22.7|
|Arrow Enso Global||43.8||10/10/2008||-37.5||-20.3||12.5||13.3||8.7||8.5||18.4|
|Northern Rivers Innovation RSP||9.6||9/30/2008||-37.5||-16.4||0.1||93.9||20.9|
|Arrow Elmwood Fund||10.3||10/10/2008||-36.1||-18.6||18.9||-8.9|
|BluMont Hirsch Performance||116.3||3.62||10/10/2008||-35.7||-14.0||13.4||9.4||15.0||12.7||31.7||10.7|
|Front Street Canadian Hedge||10/9/2008||-35.7||-17.3||9.8||19.0||13.2||20.6|
|Dynamic Strategic Value||4.6||10/10/2008||-35.6||-9.3|
|BluMont Hirsch Long/Short||33.8||4.97||10/10/2008||-34.9||-12.8||10.1||9.1||10.6||9.9||20.8|
|Arrow Canadian Income||17.3||10/10/2008||-34.8||-14.4|
|Arrow Clocktower Global||4.9||10/10/2008||-32.4||-6.7||-3.9||30.3||18.9||8.0||28.0|
|BluMont Canadian Opportunities||28.7||2.78||10/10/2008||-30.7||-10.7||5.5||-1.9||11.9||12.5||15.8||1.4|
* YTD % return is as of the fund's last reported NAV date
© 2007 The Globe and Mail. All rights reserved.
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