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August 15, 2007
Culross July estimates - the development of a theme
Culross funds are about to be ranked as No.1 again in Global Multi-strategy FoHF databases.
Performance estimates:
Fund Name/ July Return/ YTD
Culross Global Fund/ 8.3%/ 21.90%/ Unleveraged
Culross Global H Fund/ 8.6%/ 29.51%/ Unleveraged
To explain these extraordinary numbers we need to recap and look at this really good example of Culross’ themed approach:
Theme name - ‘Short sub-prime borrowers’
- October 2005: Culross closed out all managers with any exposure to credit across all funds
- January 2006: Culross recognised that Sub Prime was an extreme credit problem and was rapidly becoming excessively over extended. Goal – find a manager to fill the new Theme.
- July 2006: found a hedge fund manager launching a “Short Sub Prime Fund”. “H” immediately builds a 12 % exposure. (Bear Stearns simultaneously raises two funds to invest long in Sub Prime!)
- Enjoy strong performance over following 12 months as underlying Sub Prime market starts to deteriorate (See HSBC et al)
- May 2007: Culross warns again of increasing risk in Sub Prime and clearly warns that the market is misunderstanding contagion risk
- July 1 2007: the “Short Sub Prime Borrowers” theme evolves to become “Widening Sub Prime and Credit Spreads”.
- July 1 2007: Culross double their theme exposure to 23% in Global and 30% in “H” Fund
It is clear that Culross Funds generate Alpha by successfully using complimentary themes. This approach is intellectually traceable back over 10 years and will continue to be the unique and distinctive hallmark of the investment manager Culross.
-Culross Global Management Ltd-
Posted by su at August 15, 2007 2:47 PM