New York, Oct 17 (Reuters) - Suvretta Capital Management, founded by a former portfolio manager for billionaire investors George Soros and Steven A. Cohen, is generating net returns of 6 percent year-to-date, despite this week’s stock market drop and wild gyrations, according to two sources familiar with the situation.
Suvretta Chief Investment Officer Aaron Cowen joins a growing list of long-short hedge fund managers who have profited handsomely this week by taking long positions in stocks expected to increase in value and shorting stocks expected to decrease in value. The firm oversees more than $1 billion in assets.
The majority of flows into equity strategies over the last fourteen months have been into long-short equity and event driven strategies, which received $55.5 billion and $49.8 billion, respectively, according to research firm eVestment’s September and third quarter report.
At the tail end of the third quarter, however, hedge funds that employ strategies similar to Suvretta’s lost favor.
“It appears that, as markets have become more volatile and losses emerge, investor interest has declined more rapidly towards long-short, which lost $1.8 billion in September, than to event driven funds,” eVestment said.
Overall, total assets in hedge funds decreased 1.5 percent in September to $3.012 trillion, eVestment added.
“Performance accounted for the majority of the $46.7 billion decline, but investor redemptions outpaced new allocations, causing an outflow of $6.9 billion during the month.”
Total industry assets declined in the third quarter for the first time since the second quarter 2012, eVestment said. Performance reduced assets under management by $30.3 billion, the equivalent of an asset-weighted return of negative 1.0 percent. Flows were positive in the quarter as $9.6 billion was added to the industry. (Reporting by Jennifer Ablan. Editing by Andre Grenon)