Rob Citrone's funds taking a beating in October

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Discovery Capital Management, the multibillion dollar hedge-fund company run by seasoned trader Rob Citrone, has been battered by October's volatility, according to a recent hedge-fund report that disclosed year-to-date losses of more than 20 percent in one of its main funds.

Discovery's global macro fund had fallen more than 11 percent during the first few weeks of October, pushing its year-to-date losses to 20.6 percent as of Oct. 17, according to the HSBC Sports Pages report. The firm manages $15 billion for clients.

Discovery's Global Opportunity Fund, a separate investment vehicle managing nearly $5.4 billion as of mid-September, slid 10 percent through the same few weeks, rendering it down more than 16 percent for the year so far, the report said.

Citrone, an alumnus of the famous hedge fund Tiger Management who is known for his knowledge of global and emerging markets, did not respond to a request for comment.

Discovery surely isn't the only hedge fund struggling with tumultuous markets, which have swung up and down by hundreds of points intraday in October.

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Traders estimated that hedge funds lost billions of dollars on the 15th, a day when the dissolution of a highly anticipated pharmaceutical-stock merger touched off wild undulations. And even before that, hedge-fund managers like Pershing Square's Bill Ackman, who has consistently been one of the best-ranked players so far this year, reportedly lost ground during the first weeks of the month.

(Pershing's International fund was down one percent through the 21st, according to its own estimates, a snapback from the 4 percent month-to-date losses it had weathered the prior week. But it remains up nearly 32 percent for the year through Oct. 21.)

Discovery appears to have been bruised by its holdings in a variety of stocks, according to recent securities filings, including a handful of energy names that have sunk dramatically in the last few months, such as the Energy Select Sector SPDR, an exchange-traded fund, Canadian Natural Resources, and EOG Resources. Micron Technology, SanDisk, and Universal Display, have also been problematic holdings, the filings indicate.

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Nonetheless, Discovery's short, or bearish, holdings of stocks, as well as other nonstock positions it may hold, could not be determined, making it difficult to get a full picture of its portfolio.

Discovery, a Norwalk, Connecticut-based firm that Citrone opened in 1999, has seen trouble before. As recently as March, the company's two main funds fell some 10 percent, according to Forbes, pushing both into the red for the year at that point.

And in 2008, the Opportunity fund lost 33 percent, only to bounce back a few years later and establish Citrone as one of the best-paid hedge-fund managers of 2011, earning an estimated $40 million.

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