Clint Carlson's hedge fund assets drop $1 billion in five months after brutal performance

  • Carlson Capital’s hedge fund assets dropped by $US1 billion in five months.
  • The firm’s Black Diamond Thematic fund lost 22.1% last year, with assets dropping more than $US300 million from August to December.

Assets at Clint Carlson’s investment firm have dropped by nearly $US1 billion in five months, client documents show.

The Dallas-based hedge fund managed $US8.2 billion firmwide at the start of 2018, down from $US9.1 billion in August 2017, according to documents seen by Business Insider. The drop was exclusively a result of a decline in hedge fund assets, with that business seeing assets fall from $US7.6 billion to $US6.6 billion. Carlson Capital’s collateralized loan obligation business in contrast saw a small increase in assets, now up to $US1.6 billion.

More than $US300 million of the decline in hedge fund assets can be attributed to Carlson’s Black Diamond Thematic fund. On August 1, 2017, that fund managed $US1.2 billion, per client documents. The fund managed $US854 million as of the start of this year.

That fund was the firm’s worst performer last year, falling 22.1% after fees, adding on to losses sustained earlier in 2017.

Carlson’s flagship multistrategy funds also lost money last year, losing -4.47% (Double Black Diamond, LP, $US2.2 billion) and -5.99% (Black Diamond Partners, LP, $US499 million), after fees.

Hedge funds on average posted gains last year while the stock market rallied, meanwhile. The HFR Fund Weighted Composite Index gained 8.5% in 2017. The S&P 500 was up 21.8%.

The firm’s other strategies posted net gains, meanwhile:

  • Black Diamond Relative Value Partners LP: +1.45%, with $US307.5 million in assets
  • Black Diamond Arbitrage Partners, LP: +6.85%, with $US86.5 million in assets

An external spokesperson for Carlson declined to comment.

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