Two Sigma Investments LP is tapping investors for more cash after posting a record monthly gain for its flagship onshore China fund in July as rallies in commodities bolstered performance and left it near the top of returns rankings for this year.
(Bloomberg) — Two Sigma Investments LP is tapping investors for more cash after posting a record monthly gain for its flagship onshore China fund in July as rallies in commodities bolstered performance and left it near the top of returns rankings for this year.
The Juliang Macro Strategy No. 1 fund jumped 6.3% last month, led by wagers on futures such as soybean meal, according to people familiar with the matter, who asked not to be identified discussing private details. That drove this year’s gain on the managed futures fund to about 12%, they said.Â
The performance stands out during a volatile period for the nation’s markets amid mounting concern around the economic slowdown and property debt woes. It vaults the New York-based firm into the top three performers among hedge funds running at least 5 billion yuan ($687 million) locally under the so-called CTA strategy, or commodity trading advisors, according to data provided by Shenzhen PaiPaiWang Investment & Management Co.Â
Its Shanghai-based unit is raising up to 800 million yuan for the Juliang macro fund, which already manages about 6.2 billion yuan after launching in April 2020, the people said. Its annualized return since inception is about 16%.Â
A spokeswoman for Two Sigma declined to comment.
Two Sigma is among the fastest-growing global hedge funds in the 6 trillion yuan Chinese market after winning a license in 2019, competing with firms from D.E. Shaw to Winton Group and Bridgewater Associates. Scale is becoming more important as a regulatory revamp is expected to push up costs and wipe out thousands of smaller players.
Commitment to China
While a rare filing by Two Sigma in March revealed disagreements between its billionaire co-founders on many issues, the local unit told investors at a recent road show that the two leaders are both committed to the firm’s China business, the people said.Â
The Shanghai unit has expanded the onshore team to 17 people including researchers and engineers, and the CTA strategy has doubled the number of underlying models since it began to more than 110, they said.Â
The company also raised about 600 million yuan earlier this year with its first stock fund, seeking to outperform the CSI Small-Cap 500 Index, according to the people.
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