* Citadel, SAC among strong performers
(Adds details from Hedge Fund Research)
By Svea Herbst-Bayliss
BOSTON (Reuters) - Hedge funds posted small gains in
July but lagged the broader market because many managers played
it safe after market tumult in May and June took a bite out of
their portfolios, according to data released Friday,
Reversing two months of losses, the average hedge fund
gained 1.9 percent in July, after dipping 1.35 percent in June
and falling 3.01 percent in May, consultants at Hennessee Group
The broader Standard & Poor's 500 index climbed 6.88
percent last month.
Hedge Fund Research (HFR), another firm that tracks flows
and returns, said hedge funds gained 1.82 percent in July.
July's performance left hedge funds with a gain for the
year of 1.87 percent according to Hennessee, and a gain of 1.52
percent according to HFR, while the broader market was down
Funds that pick stocks posted some of the best returns,
with the HFRI Equity Hedge Index gaining 2.88 percent which
helped fuel the monthly gains. Funds specializing in
event-driven strategies posted a gain of 2.19 percent as
liquidity and risk tolerance continued to improve and equity
and fixed income issuance proceeded throughout the month, HFR
As expected, hedge funds that exclusively bet on stock
market declines fared the worst last month with so-called
short-sellers dropping 6.30 percent.
Some of the best-known and most closely watched hedge fund
firms turned in strong performances in July, after a few tough
weeks when fears about the U.S. economy and Europe's expanding
debt crisis sent markets tumbling.
Kenneth Griffin's flagship funds at Citadel rose roughly 4
percent last month, an investor familiar with the fund said.
The funds were up 1 percent for the year through July after
being down 3 percent through June. They stormed back to huge
gains in 2009 following heavy losses in 2008 when the industry
posted its worst-ever performance.
Steven Cohen's SAC Capital Advisors, one of the world's
biggest hedge funds with $12 billion in assets, reported a 3.7
percent gain in July, according to an investor.
Peter Thiel's Clarium Capital Management, which makes big
bets on broad economic themes, posted a 5 percent gain in July
after months of seeing assets shrivel amid poor returns, an
Stephen Mandel, known as one of the original Tiger Cubs who
spun out of Julian Robertson's successful firm, posted a 5.5
percent gain in July at Lone Pine Capital, leaving him up 2
percent for the year, an investor said.
Harbinger Capital Partner's Credit Distressed Blue Line
Fund, which specializes in distressed securities and started
with a bang when it gained 9.45 percent in its first month of
trading in April 2009, was up only 0.5 percent in July,
according to an investor.
Harbinger founder Philip Falcone's flagship Harbinger
Capital Partners Offshore fund was off 10.7 percent through the
first two weeks of July, industry data show. That left the fund
to rank as one of the industry's worst performers for the year,
according to HSBC Private Bank.
Because hedge funds are not required to release their
returns or asset size to the public, any numbers that come out
are analyzed carefully for clues on how the $1.6 trillion
industry is performing.
(Reporting by Svea Herbst-Bayliss; editing by John Wallace and