Inside The K-Shaped Recovery: $1.8B Fund Still Down 43% YTD

(Business Insider) Michael Hintze's hedge fund eked out a 1.3% gain in August but remains far from erasing losses made through the first months of the coronavirus pandemic, Bloomberg reported Friday.

The billionaire investor's CQS Directional Opportunities Fund is down 42.5% for the year after its August climb, according to letters to investors seen by Bloomberg. Last month marked the fund's third-straight month of positive returns.

Still, Hintze's firm has plenty of work to do to retrace its virus-induced slump. CQS sank 48% from February through May, according to Bloomberg, following the broader market's tumble as the coronavirus drove the fastest bearish dive in history.

"We are working hard to capture the opportunities, protect the portfolio, and rebuild returns for our investors," Hintze said in his letter to investors. 

The first-half losses led Hintze to cut costs throughout his firm. CQS slashed jobs and spun off a developing stock-focused fund in May following the poor performance. 

The CQS Directional Opportunities Fund handles roughly $1.8 billion in investor capital. The London-based firm managed $18.5 billion in total at the end of July and focuses on credit market positions.


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