The team-led CQS ABS Fund, which manages $1.57 billion from an office overlooking the gardens at London's Buckingham Palace, fell 2.26 percent in 2015. The fund has averaged nearly 20 percent annual returns since its 2006 inception.
Spokesmen for $3 billion Libremax and $12.6 billion CQS declined to comment.
CQS, led by billionaire Michael Hintze, remains bullish on the sector, according to a letter to clients in late December and seen by Reuters: “We believe the fundamentals in both the U.S. and European (asset-backed securities) remain solid, and relative value is increasingly compelling.”
Another big first-time loser was Nehal Chopra’s Ratan Capital. The New York-based hedge fund, named after the Hindi word for jewel and backed by billionaire investor Julian Robertson of Tiger Management, had been one of the year's best performers. With a 21.6 percent gain through August, the Tiger Ratan Capital Fund was on track for a fourth consecutive year of double-digit gains.
But bad bets on its concentrated portfolio of stocks, such as troubled drugmaker Valeant Pharmaceuticals International Inc, would later wipe out those profits for the more than $1 billion firm. Ratan’s main fund ultimately fell 19 percent for 2015, according to a person familiar with the situation.
The first loss proved fatal for LionEye, a corporate event-focused fund that Stephen Raneri and Arthur Rosen started in February 2009 with backing from executives at Jana Partners.
Once considered hedge fund rising stars, they produced a more than 7 percent average annual return and managed a peak of $1.5 billion by mid-2015.
For the first 11 months of 2015, though, soured stock bets on clothing company Men's Wearhouse Inc and health and wellness products retailer GNC Holdings Inc generated a 19 percent loss, according to a person familiar with the situation.
Raneri and Rosen decided to shut the Manhattan-based firm in early December.