By remaining disciplined in its research and the proper execution of strategies enable New York-based hedge fund firm Gondor Capital Management to consistently deliver strong returns while its much larger and more established counterparts crumble despite an encouraging market.
Vincent Au, portfolio manager of Gondor Capital, said his onshore hedge fund Gondor Partners LP returned 13.86% in the first seven months of this year (1.74% in July) while his offshore fund, the Gondor Partners Ltd., generated 12.28% gains during the same period (1.74% in July).
“By remaining disciplined in my research and the execution of the strategy [I could continue generating solid gains],” Au said commenting on how he manages to keep consistent strong returns since September 2015.
The last time both funds reported negative gains were in August 2015 when the domestic hedge fund suffered a 0.11% loss while Gondor Partners lost 1.19% during the month. Both hedge funds still closed 2015 with double-digit gains of 12.18% and 10.61%.
Gondor’s consistent performance is in sharp contrast to the realities of some of the biggest hedge funds that are getting crushed or have lost money this year even as the markets have been hitting record highs. The world’s largest hedge fund firm, Bridgewater Associates and Two Sigma, reported sharp losses in its hedge funds last month.
Both fund managers reported weak performance even as the Standard & Poor's 500 delivered 10.4% through July. Even data from the Bank of America Merrill Lynch showed that 4% of active managers outperformed their benchmark Russell 1000 index in the first half of 2017.
Au commented, “I strongly believe the performance of each fund will be based on the manager's skills and the strategy they employ. The media puts a significant spotlight on the big funds though I would assume there are small funds that also don't perform well.”
Coming into the third quarter, Gondor is looking at opportunities in industrials and technology.
Investor attraction
Because of the reliable performance of Gondor, Au said that his hedge funds are starting to receive numerous inquiries, particularly due to the recent recognitions from BarclayHedge and Preqin ranking Gondor Capital as a top fund in the space.
“Thus, we recently started the process of reconstructing our marketing materials in hopes of raising new assets,” Au said. But he admitted that fundraising for small funds has been hard, is hard and will be hard. It’s the landscape, and it is what it is,
He went on to say, “As Robin Williams said in 'Dead Poets Society,' 'Twas always thus, and always thus will be.’ Speaking only for me, I don’t have the pedigree, the brand name recognition, the Rolodex for connections and the financial resources to hire internal marketers. However, all those aforementioned reasons have only motivated me to work harder and even to a certain degree obsess about the performance of the Gondor funds. I cannot control the markets and the fund's results but I can control my work ethic and my character absolutely refuses to allow me to lose and be outperformed by others because of effort.”
Having said that, Au remains confident he would be able to duplicate his hedge funds’ nearly 30% finish in 2106 as this year ends. And he said he is doing everything possible to ensure it will.
