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Crispin Odey ended 2018 with December gains in his key funds, consolidating his position as the top performing hedge fund manager in Europe last year.

The veteran equities manager posted a 56.6% annual gain in the dollar class of his European flagship. His OEI Mac fund, which combines his equities bets with a macro overlay, fared even better, rising 60.5%.

The two funds posted better performance in 2018 than any other European hedge fund managing more than $250m, according to HFM Data. The Odey flagship’s annual gain follows its record 66.7% drawdown in the 35 months to December 2017.

“We are delighted for our clients and keeping our heads down,” said a source at the firm. Odey, whose outspoken stance as a supporter of Brexit has drawn attention, will need to gain an additional 90% in his flagship to recoup the losses from the drawdown, according to Bloomberg.

Long bets on Sky PLC, which is being acquired by Comcast, and SLC Agricola, a Brazilian agriculture firm, boosted Odey’s returns last year. Bets against UK retailer Debenhams and Intu, a real estate investment trust, helped on the short side.

Anthony Todd, the CEO of London-based CTA specialist Aspect Capital, recently spoke out in support of Odey, whose volatile track record has been criticised by some. “Everyone had completely written him off,” said Todd, naming Odey as the European rival he would choose to invest with.

“You want someone who’s got a remarkable long-term track record and is clearly doing something so completely different from what we do. It’s 100% discretionary, conviction-based and to me that’s going to provide a huge level of diversification from the rest of my investments. It’s terrific the way he’s doing.”

Odey’s bearish stance on equities and other asset classes cost him from 2015 onwards but the positions came good in 2018 and he is expecting further downturns. “This is the early stages of a profound bear market in assets,” he told investors in November. “Populism in the west has a long way to go. QE has undermined savings and now populism will undermine the price mechanism. We are at the start of a 25-year cycle so get used to it.”

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Northlander Commodity Advisors, managed in Richmond by former Brevan Howard and Barclays trader Ulf Ek, was the third best performer last year. The fund, focused on European power and gas, and international coal, gained 52.6%, largely on the back of European carbon.

“Rarely, if ever, have we seen an opportunity like the EU ETS (emissions trading system) where a regulatory change results in a dramatic repricing of a commodity and the market simply didn’t spot the change for six months, giving us time to establish a leveraged position using options to reduce drawdown risk,” Ek told investors in a year-end note.

Lansdowne Energy Dynamics, led by Per Lekander, also profited from the European carbon trade. His fund gained 6% last year, but a 10.2% loss in the final quarter means it places much further down the Top 50 than Northlander.

Switzerland-based Premium Currencies is fourth on the list and the top performer managed from outside the UK. The $740m fund made money every month last year after losing 3.9% in January. Greenvale Capital, a London-based long/short fund managed by former Citadel manager Bruce Emery, completes the top five. A key part of its 27.9% gain stemmed from a successful long position on UK online grocer Ocado, which had been targeted by hedge fund short-sellers.

Northlander, Premium Currencies and Greenvale all won awards at the EuroHedge Awards in January, along with several others on the list. Sharpe ratio and high watermark data, not only overall returns, is used to calculate the winners, explaining why some missed out.

Odey is not the only big name who has endured recent losses to appear on the list. Alan Howard’s flagship at Brevan Howard rose 12.3% after losses in three of the preceding four years.

The fund, which uses rates, currencies and other instruments to trade on macroeconomic trends, had its best month in a decade in May as eurozone turmoil rattled global markets. In a rare public statement, Howard thanked investors for their loyalty after the flagship, which he manages with a team of about 20 traders, gained 7.9% in May.

One fund in the Top 50 holds the questionable distinction of being the only fund shutting down. MVN event-driven, a $370m London-based fund which rose 9.3%, is due to close and return capital to investors after parent company Maven Group decided to concentrate on prop trading and was “reassessing the opportunities” for its asset management arm.

MVN is one of several event-driven names on the list after a good 12 months for many funds in the strategy. Funds managed by Lutetia, TT International, Kite Lake Capital and CIAM also make the Top 50.

Horseman Global is notable for its late ascension to the list after spending most of 2018 in negative territory. A 13.5% gain in December was the second-best month in the long/short equity fund’s eighteen-year history.

“We are very net short cyclicals at the moment,” portfolio manager Russell Clark told EuroHedge in a short comment. Horseman’s gain came in a month in which developed equity markets globally fell steeply. The fund remains below its high watermark, having lost 24% in 2016 and gained 2.3% in 2017.

EuroHedge Top 50 – December on EuroHedge.


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