| NEW YORK, Sept 29
NEW YORK, Sept 29 Assets at the largest hedge
funds have dropped sharply, according to a new survey by
industry data and news provider Hedge Fund Intelligence.
The twice-annual Billion Dollar Club report, released on
Thursday, showed a decline of nearly 7 percent, or $132 billion,
to July 2016 from a year ago. Firms including Och-Ziff Capital
Management Group LLC, BTG Pactual Asset
Management, York Capital Management, Pershing Square Capital
Management and J.P. Morgan Asset Management lost the
most assets over the first half of 2016, according to HFI.
The survey attempts to tabulate all Americas-based firms
that manage at least $1 billion in traditional hedge fund
assets. Together, 302 firms ran $1.84 trillion as of July 1,
nearly two-thirds of the entire hedge fund industry, often
estimated to manage about $3 trillion.
Assets for the Billion Dollar Club have fallen over the last
two six-month counting periods, the first consecutive drop since
2009, when hedge funds reeled from the global financial crisis.
The data provides another sign of struggle in the industry,
with investment returns lackluster at many well-known firms. The
HFI Americas Composite Index, which tracks a range of
strategies, gained 3.35 percent this year through August. That
compares to a 6.21 percent gain for the S&P 500 Index and a 4.22
percent gain for the iShares Barclays Aggregate Bond Fund over
the same period.
To be sure, some firms consolidated their power in the
industry. Top asset gainers by dollar amount were systematic
behemoth AQR Capital Management, credit-focused Centerbridge
Partners, quantitative pioneer Renaissance Technologies,
technology stock specialist Coatue Management and macro-focused
Element Capital Management, according to HFI.
Bridgewater Associates retained its spot atop the list of
the largest hedge fund managers, with $103 billion as of June
30, down just 1.15 percent since the start of the year.
Bridgewater, a macroeconomic specialist based in Westport,
Connecticut, manages approximately $150 billion overall,
including non-hedge fund products.
Hedge funds, which are only open to qualified individuals
and institutions, typically charge management and performance
fees, offer investors their capital back within a year, and bet
on the price of securities both increasing and decreasing,
so-called longs and shorts.
The largest decline in assets came at Och-Ziff, one of the
few publicly traded hedge fund managers. The New York-based firm
has struggled with a gain of just 0.36 percent in its flagship
multi-strategy fund this year through August, according to a
filing with the U.S. Securities and Exchange Commission. That
followed a small loss last year.
Och-Ziff, still the fourth largest as of July 1 with $39.2
billion, has also attracted unwanted attention because of a U.S.
investigation into alleged bribery of African officials and an
anticipated guilty plea and $400 million fine. A spokesman for
Och-Ziff declined to comment.
BTG Pactual suffered the most dramatic decline, with assets
falling 83 percent since Jan. 1. The former chief executive
officer, André Esteves, of the Brazil-based investment bank and
money manager was arrested late last year on obstruction of
justice charges, which he has denied.
BTG asset management CEO Steve Jacobs said assets in its
flagship emerging markets-focused macro hedge fund fell to $150
million from $5 billion because of that "external crisis." But
assets for the fund have since tripled from the low point on the
back of positive performance since March, according to Jacobs.
Representatives of the other firms declined to comment or
did not respond to a request for comment.
(Editing by Carmel Crimmins and Jeffrey Benkoe)