Hedge fund Elliott Investment Management is undertaking efforts to reassure its investors after revealing that its long-term returns have lagged the S&P 500, according to a report by the Financial Times.
The firm’s net annualised return since 1994, when its Cayman Islands division was founded, has fallen below the S&P 500 index including reinvested dividends for the first time in more than 20 years. The firm gained 4.7% net of fees in the first nine months of the year, compared with a 15% return for the S&P.
In a letter to investors, the firm reportedly took steps to caution that it did not believe its poor returns were due to its size, with $78bn in assets. Rather, it attributed the shortfall to mistakes, problems with hedges, and other issues with the market.
Despite falling short since 1994, from the firm’s founding in 1977 its returns continue to run ahead of the S&P. Elliott are currently fundraising a new $7bn draw-down fund, which will allow further capital calls as opportunities arise.
