Moore Capital Wrong-footed By Trump

After several rough years, equity hedge funds have roared back into life this year. The HFRI Equity Hedge Index is up 9.6% year-to-date. Macro hedge funds, on the other hand, have struggled to produce a positive performance. Indeed, the HFRI Macro Index is down 0.5% year-to-date. Louis Bacon’s Moore Capital Management is suffering from the same problems as its peers.

At the beginning of July, it was reported that Moore Capital Management cut 30 jobs at its New York and London offices, 7% of the total workforce in response to pressure from investors to cut fees amid poor performance. During the first half, the fund reportedly lost 2% underperforming its peer group and lagging the equity hedge fund complex by nearly 10%.

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Figures to the end of August confirm that the fund is indeed on track to report its first loss since 2011. Moore Global Investments finished August down 0.84%, while the multistrategy Moore Macro Managers fund dropped 2.44% during the same period.

Moore Capital Management cut its management fee in its flagship fund late last year by half a percent to 2.5%, the Wall Street Journal reported in December. The average hedge fund management fee was 1.46% of assets in the second quarter, with the incentive fee coming in at 17.2%.

Still, despite Moore’s poor recent performance, the firm’s long-term record stands intact. To the end of 2016, Moore’s Global Investments fund produced a cumulative return since inception for investors of a little over 5,800% according to correspondence seen by ValueWalk. On an annualized basis, investors have seen a return of 16.4% net after fees, eclipsing the market average return of approximately 9%.

Moore Capital Management Wrong-footed By Trump

In November last year, Bacon wrote a letter to his investors. The letter — the first since 2012