Bloomberg Markets Magazine Names Glenview Capital Top 2013 Hedge Fund

Bloomberg Markets Magazine February edition reported that only 16 large hedge funds – those with more than $1 billion in assets – surpassed the Standard & Poor’s 500 index for the first 10 months of 2013.

The S&P gained 25.3 percent, with dividends reinvested. Of the 16 hedge funds that beat the S&P, Glenview Capital Opportunity Fund (under the management of CEO Larry Robbins) grew a whopping 84.2 percent over that same period.

Robbins, who has mastered the art of handicapping stocks, received his initial education in the unlikeliest of places – Arlington Park, a horse racing track near Chicago where he grew up. It was there Robbins’ father, who ran the park, taught his son to handicap horses by analyzing everything from track conditions to the competition.

Glenview’s phenomenal performance in 2013 was the result of Robbins’ calculated bets on U.S. stocks, especially in the health care sector after the Supreme Court gave the green light to the Affordable Care Act, aka “Obamacare” in 2012.

One of Glenview’s largest holdings was Tenet Healthcare Corp. THC. That stock jumped 45 percent in the 10 months leading up to Oct. 31. Robbins ultimately pushed the hospital portion of his total portfolio to 33 percent.

Glenview and the 15 other top-performing hedge funds were clearly not the norm. According to Bloomberg Markets Magazine, through October hedge funds returned only 6.9 percent on average.

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Others in the top-performing, S&P 500 beating group Bloomberg Markets Magazine called the Elite 16 include:

• Matrix Capital Management (56 percent);
• Paulson Recovery (45 percent);
• Lansdowne Developed Markets SIF (44.5 percent);
• The Children’s Investment (39.7 percent);
• Owl Creek Overseas (38.1 percent);
• Glenview Capital Partners (37.4 percent);
• Trian Partners (34.9 percent); Palomino (31.5 percent);
• Pelham Long/Short (30.3 percent);
• Two Sigma Compass Enhanced U.S. (29.2 percent);
• Third Point Ultra (28.8 percent);
• VR Global Offshore (27.4 percent);
• Alden Global Distressed Opportunities (26.7 percent);
• Lansdowne Developed Markets (26.6 percent);
• Joho A (25.9 percent)

In addition to listing the top 100 large hedge funds for 2013, Bloomberg Markets also covered the top 25 midsize hedge funds (Senvest Partners, managed by Richard Mashaal topped that list) and the world’s most profitable hedge funds, led by Bridgewater Pure Alpha II, managed by Ray Dalia.

As for Glenview’s Robbins, not content to rest on laurels, predicted another year of gains in 2014.

“The current environment is opportunity heavy, and it’s return heavy,” Robbins told Bloomberg Markets. He then added, “We’ve been taking advantage of it rather than having our bats on our shoulders while they’re throwing underhanded softballs.”

Baseball metaphors aside, some of Robbins’ competitors were less optimistic. Activist investor, Carl Icahn, for one, sounded a cautionary note when he told Reuters, "I am very cautious on equities today. This market could easily have a big drop."

Even Robbins’ aggressive stance has its limits. “The road from market genius to village idiot,” he said, “is exceedingly short.”

At the time of this writing, Jim Probasco had no position in any mentioned securities.