THE HEDGE fund run by “black box” pioneer David Harding (pictured, right) has emerged as one of the few major winners after a dire year for the industry.
Winton Capital’s futures fund returned 6.3 per cent in 2011, according to provisional figures seen by City A.M. This contrasts with the average hedge fund’s 4.45 per cent fall, according to Hedge Fund Research figures for the period to 15 December.
Winton has grown to become one of Europe’s five largest hedge funds, using scientific analysis from around 100 researchers. Funds under management hit $27.7bn (£17.86bn), an annual rise of nearly two-thirds, according to City A.M. estimates.
The success of the fund – built “to make money in the event that there will be surprises” – is likely to mean a major payout for Goldman Sachs, which took a 10 per cent stake in 2007, as well as for Harding. The Cambridge graduate, statistician and punk rock fan received a dividend of £54m in 2009 while his 2010 payout was estimated at £60m.
Harding’s recent success comes after a year of turmoil which has hit some of the biggest names in the industry. John Paulson’s Advantage fund, his firm’s largest portfolio, declined by about six per cent in the first three weeks of December, putting it down 36 per cent after 51 weeks of the year. The Advantage Plus fund is down by about 52 per cent over the same period.
Meanwhile Crispin Odey, the founder of Odey Asset Management, used his latest letter to investors to lament that his “crystal ball has misted up” because of global political turmoil.
Odey is a City veteran but his firm rose to wider prominence after it made millions during the financial crisis by shorting stricken City banks.