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The New York-based hedge fund firm with ties to Tiger Management faces a problem familiar to fellow Tiger affiliates: its short positions are taking a hefty toll.
Jonathan Auerbach's Hound Partners is having a tough time this year.
The New York-based Tiger Seed, so called because the manager started with money from Tiger Management founder and hedge fund legend Julian Robertson Jr., lost 1.35 percent in June, pushing down its gain for the year to slightly less than 1 percent, according to its most recent client reports, obtained by Alpha.
The blame for the June setback lies squarely on the firm's short book, which lost 3.30 percent on a gross basis versus a gain of 2.03 percent for the long book. This was the worst performance for the short positions in about nine months.
As a result, in the first six months the long portfolio gained 8.14 percent gross versus a loss of 3.82 percent for the shorts and a loss of 2.31 percent for Hound's "other" category. Hound defines "other" as "performance from equity stubs, fixed income, capital structure investments, and the beta hedge, as well as fund interest income and expense."
Hound's recent plight reflects the fund's history as well as that of many of the Tiger Management long-short descendants. Like many others in the Tiger long-short den, Auerbach's long portfolio consistently outperforms the overall market, while...