Looking back on York rising and Carl Icahn in the blogosphere

By Rob Copeland

Tue Jul 30, 2013


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Absolute Return also revisits a mortgage jackpot for hedge funds.


One year ago

»» Cerberus Capital Management, Pine River Capital Management and Canyon Partners, among several other firms, hit it big on investments in mortgage securities.

The good cheer continued through the end of the year, when the median MBS manager gained 15.15%. This year has had its hiccups for agency specialists, but many funds - including LibreMax Capital and PCM Provident - have already come close to double digit returns. The Absolute Return Mortgage Backed Securities Index is up 3.36% through midyear, making it a slightly better than average hedge fund strategy in 2013.

See also: Allocators skeptical of still-bullish mortgage hedge funds I MBS fund performance

Five years ago

»» Jamie Dinan's York Capital Management was rising past the $16 billion mark on the back of strong performance.

"The returns are the most important thing," Dinan said at the time. "Not every $10 billion-plus firm is seeking to shoot the lights out. Maybe they're looking for 8% to 11% returns. We still want 15% to 20% returns. We're not here to be average. Size is not an excuse."

Shortly thereafter, York cratered to $8 billion in the wake of a 24% loss for the flagship event-driven strategy in 2008. It has since climbed back to $15.5 billion as of July 1, up from $13.56 billion at the start of the year. The flagship is up 5.19% this year through the end of June, compared with a 6.28% rise for the Absolute Return Event Driven Index.

Dinan called the market correctly earlier this year, saying in January that "U.S. equity markets offer a real decent return." The Standard & Poor's 500 Index is up 18% this year, including a 12% gain since Dinan made the prediction.

Mary Beth Grover, an external spokeswoman for York at the Abernathy MacGregor Group, declined to comment. See performance for the firm's funds here in the HedgeFund Intelligence database.

See also: Jamie Dinan's hedge fund industry outlook I York creates COO role, taps former Merrill, Ivy execs

»» The cantankerous Carl Icahn briefly became an internet star with a new blog that showcased his trademark activist bent. "Corporate democracy is a myth," he wrote. "Board meetings are often a complete travesty. There is no leadership in the executive suite."

Icahn, who turned his hedge funds into a family office in March 2011, last posted to the blog in 2009 and has since expanded to a new social medium: Twitter. Since joining last month (follow him at @Carl_C_Icahn), he has amassed more than 23,000 followers and sent out eight messages. One representative example: "All would be swell at Dell if Michael and the board bid farewell."

He did not respond to a tweet requesting comment. Follow Absolute Return at @absolutereturn.

See also: Icahn opines at Delivering Alpha I Top Icahn deputy Alex Denner nabs Meritage seed deal I For sale: Icahn's $37.5 million yacht