Some Hedge Fund Trades that Made the Grade

December 20, 2012 James Heinsman Hedge Fund News

It was a hard year for the average hedge fund manager, returning on average about 4.9 percent. Nothing to write home about. But there were some places where hedge funds managed to still do well, making billions of dollars with large, sometimes directional, contrarian bets.

Greek Bonds

There was one hedge fund which bought Greek bonds by the millions, and that was the Third Point fund. They were the single largest buyer of Greek bonds, gathering about $500 million in bonds at an average opf 17 cents a share. Since the fund was able to get a buyback price of 33 cents a share, the fund was able to double its money on this transaction alone. The main fund for Third Point climbed 20 percent by mid-December.

US Mortgages

One thing the best performing hedge fund managers have in common is that they bet big on US mortgages.  The price for mortgage-backed bond prices climbed this past year. The BTG Pactual distressed mortgage fund went up by 40 percent this year, while Tilden Park, another mortgage fund, soared by 33.5 percent.

Eurozone Banks

This year bank equities have been among the best performing investments globally, a big improvement over the dismal results financial-based funds suffered before 2012. Toscafund’s financials-focused hedge fund brought in a 25 percent profit so far this year, by purchasing such bank equities as SocGen, BNP Paribas or UBS.

BNP Paribas, BTG Pactual, SocGen, Third Point, Tilden Park,

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