Last month HIQ Invest Market Neutral Fund lost an astonishing 12,1%. That’s even worse than the month of March (-8,56%). Losing over 20% in two months is nothing short of a disaster for hedge funds. The results over 2014 haven’t been very positive either (-15,62%). Troubled times ahead for the sister of DeGiro (same owners).
Always look on the bright side of life
However, management looks on the bright side of life. Less is more. The fund has seen investors taking the money from the table – and combined with the losses the fund is a lot smaller than it used to be. Which is great in opinion of the fund managers. After all, a small car is easier to drive.
Less money, less problems. Easier to generate a little profit with a tiny fund. Strategies which only work on a very small scale suddenly make sense again. Income from “market making” activities are also limited to a fixed yearly sum. With the lower assets under management this is getting significant. Could be, but even with the astronomical 3% managed fee, a certain critical mass for hedge funds it required.
Hiring traders again
Other news is they’ve got a million from their own money to hire a few human traders. Because this electronic automatic trading didn’t really work out. Maybe it’s not too late to try something completely different. Their monthly news letter can be found here (nl).
Better results at Done Capital
It’s easy to poke fun of losing hedgies (office furniture anyone?). Good news is less interesting, but as a kind of compensation check out this hedge fund Done Capital. I like their website, and one of the managers is Iain Somers. Once the guy who hired the HIQ managers at AOT, and nearly a decade ago he did his homework in famous a Getronics corporate action. Not surprisingly, their results are a lot better.
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