Subject: The Bright Spots in Hedge Funds
From: "Joan Peugh" <[email-masked]>
To: "R. Hunter Biden" <[email-masked]>, "Eric Schwerin" <[email-masked]>, "Arlene Busch" <[email-masked]>, "Michael Muldoon" <[email-masked]>
Date: Tue, 19 Jul 2011 16:59:53 -0400

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July 19, 2011, 1:58 pmThe Bright Spots in Hedge FundsBy AZAM
AHMED<http://dealbook.nytimes.com/author/azam-ahmed/>

While the hedge fund industry has largely been flat this year, a few closely
watched managers are standing out — welcome news for the portfolios that
have struggled in recent years.

D.E. Shaw, the secretive hedge fund behemoth founded by David Shaw, has
racked up 20 percent gains in one fund through June, compared to a meager 1
percent gain for the industry. The firm’s multi-billion dollar composite
portfolio is up more than 7 percent in the same time period, according to an
investor in the
fund.<javascript:blogPostShare('facebook',%20'D.E.%20Shaw,David%20Shaw,Israel%20Englander,Millennium,Renaissance%20Institutional%20Equities%20Fund,SAC%20Capital,Securities%20and%20Exchange%20Commission,Steven%20A.%20Cohen,Hedge%20Funds,Top%20Headline%201',%20'July%2019,%202011',%20'419555');>

In 2010, D.E. Shaw had lackluster returns of less than 3 percent, compared
to the industry average of 10 percent. The firm cut its fees earlier this
year.

Citadel, the large Chicago fund run by Kenneth Griffin, has notched 11
percent gains through the first six months of the year, according to a
person with knowledge of the firm. It’s a nice boost for a fund that is
still trying to reach its high water mark, the asset level where it can
charge performance fees once again. In 2008, the firm’s flagship fund lost
about 50 percent.

SAC Capital, the hedge fund run by billionaire Steven A. Cohen, is also
recording strong performance in its flagship portfolio this year, which is
up 10 percent, according to an investor in the fund.

The double-digit returns come amid scrutiny of SAC by federal authorities
amid a broader insider trading investigation. The firm’s name has been
raised by witnesses testifying at insider trading trial, and the Securities
and Exchange Commission has been reviewing trades by the firm. SAC has not
been accused of any wrongdoing.

The $6 billion Renaissance Institutional Equities Fund is up 21 percent
through June (not including fees), according to a person familiar with the
fund. Started in 2005, the fund is one of the few portfolios open to
investors at Renaissance Technologies, which manages $19 billion.

The gains mark a sustained turnaround for RIEF’s investors, who experienced
losses in 2007, 2008 and 2009. Last year, the fund gained more than 16
percent, according to the person, who was not authorized to speak because
the information is private.

Millennium Management’s Israel Englander is also having a pretty good year,
with his main fund up about 6 percent on the year, according to investors.
The firm has taken in more than $2 billion from investors so far this year,
according to sources familiar with the firm. It’s a massive chunk of money
in a somewhat anemic fundraising environment.

-- 
Joan K. Peugh
Rosemont Seneca Partners
o: 202-333-1880
m:202-841-854