Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Hedge fund hitters underperform—in a big way

Painful October for many hedge funds

For some large U.S. hedge funds, October may be replacing April as the proverbial cruelest month.

Last month brought an 8.4 percent rally in the S&P, the best performance for that and other major indexes since 2011. Yet while average hedge-fund performance figures haven't yet been tabulated, anecdotal evidence suggests that some major money managers struggled to even come close to those levels.

Through Oct. 27, Pershing Square, the long-short hedge fund managed by Bill Ackman, had fallen 3.8 percent for the month, according to its website, and was down 15.9 percent this year. Through Oct. 26, Glenview Capital, the health care-oriented fund run by Larry Robbins, was down 7.3 percent for the month and 20.25 percent for the year, according to an investor letter, prompting Robbins to show remorse for a period that in which "I've failed to protect your capital, and mine." In an effort to rebuild investor goodwill, Robbins is offering to "work for free to recover the losses I created for you" by initiating a new, fee-free investment product that focuses on more easily-traded stocks.