By Svea Herbst-Bayliss
BOSTON (Reuters) – Donald Trump’s U.S. presidential election win gave a huge boost to some prominent hedge fund portfolios, helping them post double-digit gains in November, several investors said.
William Ackman’s Pershing Square Capital Management posted gains of roughly 10 percent in two portfolios while Mick McGuire’s Marcato Capital Management’s flagship fund surged 12 percent, investors in the funds said. Both firms are known as activist investors that often try to shake up management.
Pershing Square’s gains were largely fueled by gains at mortgage finance companies Fannie Mae <FNMA.PK> and Freddie Mac <FMCC.PK> as investors bet that Trump’s administration would end the government control that began with the 2008-09 financial crisis. It helped cut Ackman’s losses for the year to roughly 10 percent.
Whitney Tilson’s Kase Capital jumped 7.5 percent last month, he said in an email as the government-backed mortgage firms jumped 172 percent since the Nov. 8 election.
At Marcato, the gains were underpinned by crane maker Terex <TEX.N>, a relatively new position in the portfolio, as investors expected the Trump administration to focus on infrastructure projects. Marcato’s main fund is up 10.7 percent for the year while its smaller Encore fund is up 13.7 percent for the year.
Barry Rosenstein and David Einhorn, both closely watched for their investment ideas, told clients they made money in November, but not as much as the Standard & Poor’s 500 stock index, which gained 3.6 percent.
Rosenstein’s Jana Partners fund climbed 2.2 percent in November, and is up 1.4 percent for the year. Einhorn’s Greenlight Capital rose 1.9 percent in November and is up 7.7 percent for the year, investors said.
Almost immediately after the election, investors bet on a business-friendly president helping financial and healthcare stocks perform even better than the broader index. Hopes for lighter regulation, corporate tax cuts, fiscal stimulus and higher interest rates boosted these stocks.
Most hedge funds are still compiling monthly numbers which are generally not made public.
The Standard & Poor’s 500 has gained 7.2 percent since Jan. 1.
Some funds suffered hiccups in November. Daniel Loeb’s Third Point Partners fund slipped 0.2 percent but is up 7.4 percent for the year. His Ultra fund fell 1.9 percent and is off 4.7 percent for the year, an investor said.
Renaissance Technologies LLC’s Renaissance Institutional Equities Fund, one of two portfolios available to outsiders, has gained 14.8 percent this year, but fell 1.7 percent in November, an investor said.
(Reporting by Svea Herbst-Bayliss; editing by Grant McCool)