Bloomberg News: Blackstone-Backed Hedge Fund Carrhae Returns 35.4% on Long Bets

January 9th, 2020

By Eddie Spence and Nishant Kumar

Carrhae Capital, which manages money for investors including Blackstone Group Inc., saw its long-only emerging-market equities fund surge last year as bets on stocks such as Alibaba Group Holding Ltd. paid off.

The $200 million fund gained 35.4% in 2019, according to a company spokesman. That return far outpaced the market, with the MSCI Emerging Markets Index up 18.6%. By contrast, Carrhae’s larger fund, which bets on the rise and fall in stocks, returned 10.2%, lagging slightly behind its peers. Still, this was an improvement on its showing in recent years, the spokesman said.

Other hedge funds have seen a wide disparity between the performance of their strategies. At Lansdowne Partners, for example, the main developed-markets hedge fund barely broke even, while a long-only fund gained 18.6%.

Funds that make bearish as well as bullish bets have struggled to make headway in the longest-running equities bull market in history, with misplaced shorts frequently dragging returns below the stock market. The $3 trillion industry has suffered about $120 billion in net outflows since the start of 2018, according to data compiled by eVestment. More than 4,000 hedge funds have been liquidated in the past five years.

London-based Carrhae currently manages about $500 million across its two funds, half of its 2014 peak. It began nine years ago with $150 million from Blackstone. The firm hired former Goldman Sachs Group Inc. banker Aziz Faqir as its chief executive officer last year.

Related tickers: 1180654D LN (Carrhae Capital LLP) BX US (Blackstone Group Inc/The) To contact the reporters on this story: Eddie Spence in London at espence11@bloomberg.net; Nishant Kumar in London at nkumar173@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net Patrick Henry, Chris Bourke