Hintze stands out among hedge fund heavyweights after summer gains

Credit: Micha Theiner

Sir Michael Hintze

Hintze’s $ 2.7 billion CQS Directional Opportunities fund made 4.7% during the month, bringing returns for the year to August 31 to 18.3%, according to performance data seen by FN.

Data from HFR showed that hedge funds, weighted by their assets, returned 0.6% in August, with year-to-date performance at the end the month also at 0.6%. Hintze’s peer group, those in the Macro: Multi-Strategy Index, lost 0.7% in August, cutting year-to-date performance to 2.8%.

Hintze made his name trading credit and now invests globally across a range of asset classes. In August, however, it was the credit trades that led the way, according to a person familiar with the performance.

Structured credit, excluding asset-backed securities, and macro trades were the standout performers, while distressed credit, single-name credit, Asia strategies and equity trades also did well.

The portfolio was hurt by some short bets, the person added.

In his mid-year review for 2016, published in August, Hintze wrote that the global search for yield favoured US credit, given their current spreads.

“It is interesting to me that heightened geopolitical risk, in particular Brexit, has resulted in expectations of further stimulus and monetary easing, especially in the EU,” he wrote. “The search for yield remains strong and in this context we are currently finding better value in US credit.”

Hintze also wrote that the distressed market had been “lulled into a sense of security by central bank-administred liquidity”.

Some of Hintze’s UK peers have endured a tougher 2016. Crispin Odey at Odey Asset Management and Lansdowne Partners are two to have suffered double-digit losses.

The wider hedge fund industry is also under strain. A survey by the data provider Preqin published earlier in September found that, for the first time since the financial crisis, hedge funds have an investor base that sees itself pulling out more money over the long term than it puts in.

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