Illinois-based hedge fund Magnetar Capital’s Structured Credit Fund was a standout performer in H2 with a 22% gain as credit-focused hedge funds saw mainly modest gains, according to the Gapstow Alternative Credit Hedge Fund Composite Index which is up 4.6% year to date.
The index, which put on 1.6% in Q2, is on track for an approximate 9% return for 2024, according to Gapstow Capital Partners’ Q2 report.
Magnetar’s big gain, which included a 6% increase in June alone, was largely driven by specialty finance investments, regulatory capital investments, collateralised loan obligations and other securitised products. Magnetar Capital, which manages over $17bn, outperformed many of its peers in the credit-focused hedge fund sector.
The GoldenTree Master Fund rose 1.84% in Q2 and 6.7% through mid-July, with its gains attributed to a diverse range of asset classes. It saw significant contributions from leisure and health care investments, which benefited from restructuring milestones and strong operating results. Structured credit investments, particularly those offering regulatory capital relief for banks, also boosted returns.
King Street Capital’s flagship fund, meanwhile, increased by 2.14% in Q2, achieving a 3.7% gain for H1 2024, while Canyon Value Realization Fund saw a 5% increase in H1.
Contrary to the general modest positive trend, the Mudrick Distressed Opportunity Fund saw a decline of nearly 4% up to the end of May.
Structured credit funds led the way with a 2.4% gain in Q2 and a 6.5% rise in H1, largely driven by CLOs. Corporate convertible bond specialists also performed well, with a 5% increase through June.
