Katy Perry and Andrea Bocelli; Hedge funds party despite losses

Thu Dec 17, 2015 10:54am EST
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By Lawrence Delevingne

NEW YORK (Reuters) - Hedge fund managers faced a tricky question this holiday season: how to thank employees but not offend disappointed clients.

Despite a year of heavy losses for some in the industry, anecdotal evidence suggests holiday traditions were upheld and, in some cases, embellished, with guest appearances from pop star Katy Perry, acrobatic entertainers and at least one weekend sojourn to Florida as just some of the treats on offer.

“It’s a very difficult and real balancing act,” said Adam Herz, who specializes in hedge fund recruiting at Westwood Partners. “You want to recognize people for working hard even without bonuses and at the same time not offend clients when you may have lost money and taken fees.”

Sliding commodity prices, a blow out in junk bonds and dramatic sell-offs in sectors such as healthcare have made 2015 one of the worst on record for the hedge fund industry. The Absolute Return Composite Index, which measures Americas-based hedge funds, is up just 0.66 percent for the year through November, the third worst performance since tracking began in 1998.

Despite the bruising year, employees of David Einhorn’s Greenlight Capital were treated to a weekend at the Naples Grand Beach Resort in southern Florida this month, according to people familiar with the situation. The firm’s main hedge fund lost nearly 21 percent in the first 11 months of the year, but an offsite trip from New York is an annual tradition.

John Paulson’s eponymous hedge fund firm held its holiday party at PH-D, a slick rooftop lounge on the top of the Dream Downtown hotel in Manhattan, according to a person familiar with the matter. The event venue in 2014 was the same. Many of Paulson’s funds have lost money this year.

Spokesmen for Paulson and Greenlight declined to comment.

Mike Harris’ Campbell, where investment performance has been mixed, has continued its holiday traditions this year. One is hosting a party for employees and their families, including a Santa Claus impersonator who hands out presents paid for by the firm, according to Adam Tremper, Campbell’s marketing director.   Continued...

Katy Perry performs during a concert at the Rock in Rio Music Festival in Rio de Janeiro, Brazil, September 28, 2015. REUTERS/Pilar Olivares