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Omar Venerio

Hedge Fund´s Returns are Trailing the Standard & Poor’s 500 Index

September 11, 2014 | About:

In this article let's take a look at Ray Dalio (Trades, Portfolio), the founder and majority owner with a 84% stake in Bridgewater Associates Intermediate Holdings (BAIH), the hedge fund that manages $150 billion in assets under management. Bridgewater Associates operates as an international, employee-owned hedge fund manager. It provides its services to pension and profit-sharing plans, pooled investment vehicles, corporations and governmental entities. Since its inception in 1975, Bridgewater has generated net gains of $35.8 billion and that success made this guru the 84th-richest person in the world, according to Forbes.

Industry return

The $2.8 trillion hedge-fund industry posted gains of 1.1% in June. It was the biggest monthly advance in almost a year.

According to the Bloomberg Global Aggregate Hedge Fund Index (an index weighted by market capitalization which tracks 2,269 funds), they performed returns of 2.5% for the first eight months of the year, rising 0.1% in August.

In particular, macro funds, which trade a range of assets to try to profit from macroeconomic trends, dropped 0.6% in August, advancing only 1% for the year, according to data compiled by Bloomberg.

Dalio´s funds

Bridgewater Associates charges clients a 3% management fee and collects 20% of the profits for its two primary funds, Pure Alpha I and II.

According to a person who asked not to be identified, the Pure Alpha Fund returned 1.9% in August and 5% in the first eight months of the year while the Pure Alpha II rose 2.8% and 7.6% in 2014. This return is higher than the one achieved last year when Pure Alpha II rose 5.3%.

Other hedge funds´ returns

John Paulson (Trades, Portfolio)’s funds have mixed results. The Credit Opportunities Fund gained 0.5% in August, so a 7% return is being achieved in 2014. On the other hand, the Advantage Fund, which is a distressed fund, fell 1.6% in August and 5.6% this year.

Greenlight Capital Inc., the fund of David Einhorn (Trades, Portfolio) rose 0.4% in August, bringing a 4% return year-to-date.

Louis Moore Bacon (Trades, Portfolio) had disappointing results in two of its macrofunds in August. Moore Global Investments fell 0.7%, and the Macro Managers fund declined by 1.1%.

According to a regulatory filing, Fortress’ main macro hedge fund lost 2.3% in August and 5.8% in the eight months of 2014. Further, the Fortress Asia Macro Fund fell 0.9%, and the year-to-date loss is now 6%.

Disclosure: Omar Venerio holds no position in any stocks or funds mentioned.


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