Brummer’s flagship fund, which invests across a range of hedge fund managers in which the firm also takes stakes, has never had a loss-making year and has four times enjoyed double-digit annual percentage gains, according to its latest monthly report for June.
Last year, the multi-strategy fund returned 2.33%.
However, for the first time, in 2016 Brummer’s fund incurred losses in each of the first five months, leaving it down 3.8% by the end of May, with the firm citing investor caution ahead of the UK referendum and greater clarity on the global economic picture as factors behind the performance.
Short positions on sterling and long positions on bonds around the June 23 referendum, however, resulted in a “stellar” June for the Lynx global systematic fund that makes up part of the multi-strategy fund’s holdings, with Lynx gaining 10.2% in that month alone.
The long-short equity TMT manager Manticore gained 4.7% in June. Long-short equity strategy Bodenholm, launched last September by former executives at Fidelity and AKO Capital, and quantitative macro fund Florin Court, which was set up early in 2015 by the ex-risk chief at Man Group’s quant unit AHL Douglas Greenig, also posted positive returns.
The multi-strategy fund followed up its 2.3% overall return in June with a 1.8% gain in July, which has returned it to positive territory this year, albeit up only 0.2% through the end of July.
In its monthly commentary note on the multi-strategy fund published on August 11, Brummer said June’s Brexit slump had given way to a rebound in global stock markets in July that laid the base for “a strong comeback for several trend-following and L/S equity strategies”.
All of the hedge funds in the multi-strategy vehicle’s portfolio posted gains in July, with Manticore benefiting from long positions in North America and Bodenholm also a main contributor to overall returns.
Long positions in US equity indexes were also the drivers of “solid returns” from Lynx (+2.7% in July) and Florin Court (+2.6%), Brummer said.