Clipped hedges

9 August 2010 By Christopher Swann

Timidity is seldom rewarded in the highoctane corner of the investment community. GLG’s lackluster results combined with broader hedge fund underperformance in July suggest managers may be losing some swagger. Choppy markets are hard to navigate but clients could lose patience.

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GLG Partners, one of London's largest hedge fund firms, on Aug. 9 reported a wider secondquarter loss than expected, as revenue slid and mergerrelated expenses cut into returns.

The company reported a net loss for the second quarter of $74.6 million or 32 cents a share. The nonGAAP loss was $3 million or 1 cent a share. This included $12 million of costs related to a proposed combination with rival Man Group .

The average hedge fund gained 1.9 percent in July after losing 1.35 percent in June and falling 3.01 percent in May, consultants at Hennessee Group found. The broader Standard & Poor's 500 Index climbed 6.88 percent last month. July's performance left hedge funds with a gain for the year of 1.87 percent, while the broader market was down 1.21 percent.

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