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Of Top Ten Hedge Fund Performers In 2009, Four Are Still Underwater
Amusingly, of the top 10 large hedge fund winners in 2010, only 6 are above their high water mark. And if what we are hearing about some of the other "winners" is true, make that less than 50%. Curiously, Jim Simons who is currently enjoying his retirement in some country with no collocation facilities whatsoever, lost out to the robot onslaught: Medallion was up a mere 38%, roughly the same as RIEF's S&P underperformance in 2009. And speaking of, we will have some interesting things to say about Medallion/RIEF in a few days.
Source: Bloomberg
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"And speaking of, we will have some interesting things to say about Medallion/RIEF in a few days."
Can't wait to read it! As for 2009, the top performing hedge funds on your list are the ones that took the most beta risk. The real top-performing hedge funds will only emerge in the next five years. Names like Farallon, Citadel and SAC will be back on this list. But I agree with one of the best pension fund managers in Canada, who allocates billions to hedge funds: "The old hedge fund model of charging 2 & 20 for beta is dead."
Leo,
If that were even REMOTELY true, none of those pension funds would be allocating to private equity either. So far as I can tell no major pension fund has dismantled their pretty hefty private equity divisions. So, they can talk all they want, but they will play the game as they're expected to do so.
Those hedge funds which are underperforming are those who lack the 19-year old "follow the meatball" traders, and are still trying to trade based on "macro themes" or "funnymentals"...
LOL...
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Robot, I research. K.
Flag as junk.
Buy Silver.
Why does Robot Trader have to hijack potentially interesting threads with his mass of sh*t charts?
Funny how only FIVE firms on this list we up in 2008.
I bet the Plunger Protection Team aka BS Bernanke's Private Horsemen, have killed it!
Buy Silver.
One of the things I find sad in finance is how people look at the latest performance figures to extrapolate future returns. Classic mistake. After 2008, Paulson was the king, now it's Tepper. I have nothing against either of them, but they still haven't proven to me that they deserve to be among the likes of a Soros, Griffin, Simons, Cohen or a Dalio. These are elite hedge fund managers who have a long track record of success.
But something happened after 2008. Lots of hedgies got burned that year, but those who survived, especially the larger ones, came back strong in 2009. Going forward, only the best will survive. It will be brutal for all those hedgies that only know to make outsized beta calls. They better be in the right sectors or else...KABOOM!
What pension fund managers need to ask themselves is "why are we taking on operational, reputational risk and paying 2&20 for leveraged beta?". Simple question but the fact is that most pension fund managers still don't get it. They're getting fleeced by hot shot hedgies pulling wool over their eyes.
Tepper has for at least a decade been arguably the most thoughtful and daring investment manager plying that strategy. He thinks outside the mainstream, executes aggressively (often doing his own trading) and never takes it easy with the beta trade. I don't have his numbers but he ain't no one-hit wonder that people are just discovering now. I'd put money with him in an instant over Soros or Cohen.
Ok, I stand corrected. Before 2009, I never heard of Appaloosa. And Soros is now retired so it remains to be seen if Soros Fund Management will continue to be among the better funds. As far a Steve Cohen, he still runs one of the best funds out there but he's a character (they all are and some are worse than others).
I couldn't have made it through the day without those 41 graphs you posted...Thanks
In the future, however,could you cover the subject with a little more zeal...
Look at the long term tracks of Louis Bacon and Paul Tudor Jones, and look at their drawdowns. Now that's solid performance.
Louis Bacon and Paul Tudor Jones are among the best of the best. Solid track record that goes back years.
What's your problem re Medallion ? According to your figures, Medallion was up 80% in '08. So why do you compare the Medallion '09 performance with RIEF in '08 ?
Medallion is perhaps the strongest performing fund ever. I doubt Jim Simons gives a shi* what anyone thinks.
The man deserves credit for being an innovator and a genius. And as far as I know, he never did anything illegal or even worthy of criticism in the process.
One of the all time best along with PTJ and LB mentioned above. Does anyone have a good link to historical performances over a long time period? I seem to remember seeing one here on ZH not too long ago but I can't find it.
This is a really great top ten list, Thanks for posting it Tyler. Regressions towards the mean though says none of these funds will be in the top ten in 2010. Anyone can post their own list to our site http://www.toptentopten.com/. The coolest feature is you can let other people vote on the rankings of your list.
This isn't 2009 performance. It's 2009 for the first 10 months (see the footnotes on the image). So why compare 10 months of Medallion (for example) for 12 months to the SP500? Is this was counts as analysis here?