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英文财经 |
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Hedge Funds Battle Global Turmoil |
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星期三, 七月 30, 2008 13:51:52 |
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by
Nicholas A.Vardy |
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Even for Wall Street's most seasoned hedge funds, the volatility of the past two weeks has been remarkable. The mega-trade that had been hedge funds’ biggest money spinner this year -- "long commodities and short financial stocks" -- was thrown off kilter by oil's biggest single-day fall in 17 years, combined with the sharpest rebound in financial stocks on record. During the past two weeks, the world's largest financial institutions exhibited volatility more characteristic of JDS Uniphase or Lucent Technologies at the tail-end of the dotcom collapse. It comes as no surprise that hedge funds were on track to record their worst month since the dotcom bubble burst in April 2000. Harbinger Capital, managing $26 billion, lost 12% in the first two-and-a-half weeks of July, while San Francisco's Clarium Capital plunged a whopping 10% in a single week. Good thing both Clarium and Harbinger will be shielded from the wrath of investors by their reputations for stomach-jarring volatility -- combined with overall spectacular performance.
Up until very recently, the hedge fund industry has enjoyed a remarkable run of success, posting only one loss-making year in 2002. But 2008 may break the industry's six-year winning streak. The combination of a global bear market in stocks, a world-wide economic slowdown, and the lingering effects of the international credit crunch, hedge funds already posted their worst returns in the first half of the year in almost 20 years. That means today's returns are even worse than in 1998, when emerging markets collapsed, Russia defaulted on its debt obligations, and Long-Term Capital Management blew up, bringing the international financial system to the precipice of collapse.
Hedge Funds Battle Global Turmoil: Tough Year… Only For Some
But hedge funds' rough patch is all relative. If their performance is measured against the volatility of global stock and bond markets, hedge fund performance in the first half of 2008 actually was relatively strong. Remember that the S&P 500 fell 13% in the first half of 2008 and that the Lehman Brothers high-yield bond index was down 1.3% during the same period. By way of comparison, the HFRI fund weighted composite index, dipped only 0.75% in the first six months of the year. Under tough market conditions, even preserving your capital is an achievement of note.
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Yet, as always, there were a handful of hedge fund stars who outperformed their rivals by a country mile. John Paulson, who generated profits of almost $15 billion last year on his short positions in mortgage-backed securities, was up as much as 20% in some of his hedge funds in the first six months of the year. Harbinger Capital gained more than 120% in 2007, and was up 42% through June, before giving back substantial gains in July. Clarium Capital, which jumped more than 40% in 2007, had risen more than 58% this year before its rough July. As a rule, hedge funds that bet against mortgage and housing-related investments have raked in big profits. But the ability to make money in last year's high-flying emerging markets has proven elusive. Emerging-markets specialist Everest Capital is down about 10% through June, after gaining 30% last year.
But unlike George Soros with his bet on India, most hedge funds are not yet calling a bottom to the markets. David Einhorn, founder of the $6 billion hedge fund Greenlight Capital, recently noted that he may eventually look at investments in distressed debt. But he is waiting for prices to fall further. The reality is that many hedge fund managers expect (hope?) the long commodity/short financials trade that has generated huge returns to come roaring back.
Hedge Funds Battle Global Turmoil: Why the Smart Money is Betting on Them
Grouping all hedge funds -- and by extension, all hedge fund strategies -- under one hat is unfair. Some hedge funds pursue conservative "bean counter" strategies, and look to generate incremental basis points of return, day-in, day-out. Other funds are run by entrepreneurs who love to make big bets -- and are willing to endure Hamlet's "slings and arrows of outrageous fortune" in order to find themselves perched atop performance (and compensation) tables.
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Ironically, it's in highly uncertain times such as today that both of these kinds of hedge funds thrive. The conservative funds offer stability. They not only protect capital, but also, with a bit of luck, actually make money. Meanwhile, volatile markets allow the entrepreneurial gunslingers to strut their stuff. Before the July swoon, PayPal founder Peter Thiel's Clarium Capital had been up 58% this year. That's an impressive achievement in an environment where virtually every global market in the world is down, and most by double digits.
No wonder the most sophisticated wealth managers have been shifting more of their clients’ assets into hedge funds. Benefiting from sophisticated investment advice, wealthy investors also have a more realistic view of the risks and rewards associated with investing in hedge funds. And those already invested in hedge funds perceive less risk than investors new to the sector.
Yet hedge funds are a double-edged sword. Hedge fund strategies are impenetrable to all but the most sophisticated investors. And when things go wrong, the income-generating strategies that appear to be the steadiest are precisely the ones that can go spectacularly wrong. Nevertheless, it's when markets stop being a one way (and bullish) bet that investors experience what most sophisticated mutual fund managers already know: that they are playing yesterday's one-dimensional game of checkers in a complex financial world better suited to the three-dimensional chess game played by hedge fund managers. By way of comparison, the mutual fund manager's mantra of "buy and hold" sounds almost as quaint as a country doctor telling a potential heart attack victim to "take two aspirin and call me in the morning." Sure the aspirin will help -- but I wouldn't stake my (financial) life on it.
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文章来源：MoneyShowAsia |
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