|In what is shaping up to be another subpar year for the hedge fund industry, recently spawned funds are proving, once again, that small is better for generating outsized returns. A report by Reuters highlights how emerging hedge fund managers who spun-off from multi-billion dollar industry giants to form their own funds are leading the industry in 2012. |
Mick McGuire left $10 billion Pershing Square Capital Management to start Marcato Capital Management, a stock selection hedge fund in San Francisco. Marcato Capital Management is ahead nearly 18 percent through July as compared with Pershing Square Capital’s gain of just 3.3 percent.
The report also highlights Jason Mudrick who founded Mudrick Capital, an offspring of Contrarian Capital. Mudrick Capital, which specializes in long/short investments in distressed securities, has managed a gain of 12.99 percent through July. The performance of these young funds, in addition to several others, seems to validate the findings of industry experts that show smaller funds to be more nimble and flexible in reacting to market changes.