HFR, or Hedge Fund Research, of Chicago is one of the premier names in hedge fund due diligence, analysis and indices.
HFR did a comprehensive due diligence on Seagate Global, and The Seagate Global Macro Strategy became part of the HFR Index of hedge funds in 2006. Upon being accepted by HFR as an HFR Index Hedge Fund, the strategy was renamed the HFR Macro Seagate Fund in March 2006, and HFR took over all administrative, custodian and auditing functions for the strategy, insuring the integrity of all aspects of the fund, including performance track record and reporting. Below are the HFR vetted performance numbers for Seagate:
Compound Annual Rate of Return: +13.4%Annual Standard Deviation: 9.9%
2008: Seagate Global's Best Relative Performance
2008 was the acid test year to determine if an investment manager had skill in asset management.
Seagate performance in 2008 was +17.6% while the average hedge fund was down -23% (HFR Index) and the S&P 500 was down -37%.
Seagate's positive 2008 results were not a matter of "luck" or other random factors. Seagate Global forecast the 2008 collapse through solid fundamental analysis of the financial system before it crashed, and positioned clients to first of all protect principal in the debacle, and second to produce positive returns through a low risk strategy.
Seagate reasoned that when the financial system crashed, the credit spreads of subordinate credits of companies exposed to the financial markets would deteriorate more than the same companies' senior credits. Therefore, Seagate got long senior credits, and short junior credits of the same issuer. Thus, as the markets imploded, Seagate clients made a profit while taking little direct risk.
Despite the fact that Seagate produced returns in 2008 over 40% above the average hedge fund, Seagate decided to exit the space in June of 2009 to focus on POGE and other strategies.