Dorset Energy Fund Up 50 Percent Topping Hedge Fund

Performance List
valuewalk.com/2016/07/dorset-energy-fund/

By Mark Melin
FacebookTwitterGoogleLinkedin
Amid all the bad news at Pershing Square Capital Management its long bet on Valeant Pharmaceuticals is down again
today and its rare short on Herbalife is breaking into new yearly highs there are signs of improvement. Considering the
HSBC Hedge Weekly performance ranking for instance.
Also see the top hedge fund letters

Pershing Square is almost out off the 20 worst performers list

William Ackmans $3.9 billion activist fund, Pershing Square, has been on the list of 20 worst performers for nearly as long
as its current drawdown. In 2015 the fund was the 11 th worst performer, down 16.66%. This followed the year in which it
seemed it could do no wrong ending 2014 a charmed performer, ending eighth best in absolute return with 37.24%.
Things are starting to look up to a degree, however. The fund, with -18.3% year to date performance, is almost off the list of
20 worst all-time performers, currently sitting on the edge at #20. Investors who enjoyed significant upside of 2014 are still
near break even on their investment. The July, 2015 to March 2016 drawdown of 39.81% is the longest in fund history. But
the annual volatility of 14.82% is reasonable over the long term relative to 11.77% annualized performance so long as one
can stomach the rather dramatic highs and lows of late, the most volatile period in the funds history.

Dorset oil has big 49.62% year to date performance on over $10 move in oil for 2016, higher performance
than occurred on the way lower
In the aftermath of the Brexit vote and oil finding resistance and a degree of trend exhaustion near the $50 level, it is the
Dorset Energy Fund, LTD Class A that is the top of the performance list. With 49.62% year to date absolute performance,
Dorset, like Pershing Square, has been a roller coaster for investors.
As the Brent oil market fell from a 2015 yearly high of $70 per barrel to a low near $35, Dorset topped the 2015 negative
performance list, subtracting -44.05% from investors on close to a $35 move in oil. This also followed a 2014 when the fund
lost -27.20% in another negative oil market.
But then there is 2016. Oil moved from a January low and began to trend higher well before the stock market began to
mean revert on February 11. Oil began its uptrend the second week of January and has leveled off, with Brent now trading
near $46. During this 2016 bull market move of a lessor magnitude than the 2015 move from $70 to $35, Dorset has
nonetheless overcome its negative 2015 -44.05% performance with a much weaker price trend in 2016. The hedge funds
leverage levels during these up and down markets was unknown, but the fund, with annualized volatility of 25.62%, pulled
out of its worst historical drawdown in February of this year. The 70.37% drawdown the now $115 million fund experienced
from June 2014 to February is over. Time to tackle markets anew. This might be somewhat difficult as oil markets appear
not to be in a significant uptrend at present for both technical and fundamental reasons.
Other notable winners on the top 20 performance list include systematic strategies Quantedge Global Fund, in second
place with 40.43% year to date returns. Other notables in this category include the Conquest Macro Fund, LTD (Comp), up
26.50% year to date, Tulip Trend fund, up 22.63% year to date, Renaissance Institutional Equities LP (B), up 17.75% year
to date. Welton Global Directional Portfolio, likewise a systematic strategy, uses both short- and mid-term time horizons
and is up 14.44% year to date as of July 18, number 17 on the top 20 performance list. With the stock market rally
coinciding with a tempering of key market trends recently, the success of the category still remains largely based on existing
momentum markets that were positive contributors before the Brexit vote. Many mid-term trade execution triggers that
were generated immediately after the Brexit vote have delivered generally mixed if not slightly negative performance.
Tags: Brexit Dorset Energy Fund herbalife oil prices pershing square valeant pharmaceuticals

1/1