Stock Hedge Funds Rose 7.1 Percent in May, Most in Nine Years

Date: Monday, June 8, 2009
Author: Katherine Burton, Bloomberg

Stock hedge funds climbed an average of 7.1 percent in May, their best monthly performance in more than nine years, according to Hedge Fund Research Inc.

Equity funds gained 13 percent this year through May, second only to convertible-bond funds, which jumped 25 percent, according to data compiled by the Chicago-based firm. All hedge funds advanced an average of 5.2 percent in May, boosting returns for the first five months of 2009 to 9.4 percent, the company reported.

Stock funds performed better in May than the Standard & Poor’s 500 Index, which rose 5.6 percent, including reinvested dividends. It was their best month since gaining 10 percent in February 2000. Most stock-fund managers wager about as much money on falling shares as they do in stocks they expect to increase in value.

Tremblant Partners, a $1.5 billion New York-based fund run by Brett Barakett, returned 7.2 percent last month, according to a report sent to clients. A copy of the report was obtained by Bloomberg News. The fund rose 22 percent this year through May.

Dan Loeb’s Third Point Offshore Fund Ltd., with $1.2 billion in assets, gained 7.4 percent in May, according to an investor report. The fund, which returned 5.4 percent in the first five months, benefited last month from the performance of financial stocks and corporate bonds, according to the report.

Adam Sender’s $150 million Exis Capital Management Inc. rose 3.8 percent in the month and 11 percent for 2009. The New York-based fund, which gained 15 percent in 2008, charges no management fee and takes 50 percent of any profit it makes.

Executives from the fund firms declined to comment.

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net