Loyola Capital Management was named Best Equity Hedge Fund (up to USD500m) at the Hedgeweek Americas Awards 2021 as a result of its outstanding performance over the past 12 months. Loyola Capital Partners LP was up 298.3 per cent between 30 September 2020 and 30 September 2021, versus a gain of 71.6 per cent for the S&P 500. The portfolio is managed with significant concentration (four to ten holdings) and use of leverage as high as 2x equity.
PARTNER FEATURE
Loyola Capital Management was named Best Equity Hedge Fund (up to USD500m) at the Hedgeweek Americas Awards 2021 as a result of its outstanding performance over the past 12 months. Loyola Capital Partners LP was up 298.3 per cent between 30 September 2020 and 30 September 2021, versus a gain of 71.6 per cent for the S&P 500. The portfolio is managed with significant concentration (four to ten holdings) and use of leverage as high as 2x equity.
Its performance was largely due to remaining fully invested in the face of a major recession and subsequent bear market. While the portfolio suffered a significant decline between 30 September 2019 and 31 March 2020 (the S&P 500 was down 34 per cent over the same period), Loyola Capital Management remained invested, and even increased leverage to a maximum level at the bottom of the bear market. As a result, the fund earned a return of 124.6 per cent over the full 24-month period versus a return of 13.0 per cent for the S&P 500.
Robert J Reynolds, Principal, Loyola Capital Management, comments: “We believed that many stocks, and the market in general, were incredibly undervalued at the bottom of the bear market in 2020, and this justified an aggressive, fully invested position. Our concentrated portfolio also benefited from significant gains realised by a few of our holdings.
He continues: “While we are proud of our 12-month performance, we take greater pride in our performance over the 21-year life of the fund. Since October 1, 2020, Loyola Capital Partners LP is up 1,990.9 per cent after fees, versus a total return of 352.2 per cent for the S&P 500. Our compound annual return over this period was 15.6 per cent versus an annualised return of 7.4 per cent for the S&P 500, albeit with above average volatility.”
“I believe that a true long-term investor should be willing to accept above average volatility in order to maximise long term returns,” he says. “To paraphrase Warren Buffett, I would rather earn a lumpy 16 per cent over the long run than a steady 6 per cent return.”
Sadly, Reynolds and his co-Principal, Katherine K Reap, are closing Loyola Capital Management later this year. Reynolds says: “We are having a hard time finding undervalued stocks and we see little upside in the market over the next few years. Perhaps more importantly, after 21 years of managing the fund, the lead portfolio manager is ready to retire.”
Everyone at HedgeWeek wishes the partners and staff at Loyola CM all the best for the future.
