Bracebridge Capital Thoughts?
Wondering if anyone can shed light on Bracebridge. They seem to be a strong player in the field (consistent 10%+ returns, 10bn+ AUM according to website, SEC filing says they're levered up to 70bn+), but they seem to intentionally fly under the radar. Saw them on Argentina back in 2016 and now on Mallinckrodt and also that they do rates/structured products trading. Any info on these guys, and whether a seat would be attractive from an interesting work/culture/comp/prestige standpoint?
Former LP in the fund. Their returns are nowhere near 10% nor have they been for ages (maybe since inception but who has actually been an LP for 30 years?). They run like $15bn or so (give or take a few bn - not a current LP so may be out of date) before leverage and yes its an E&F favorite and lord knows why because they just run a large illiquid carry book with structured credit and then a bunch of stuff around it (that they can lever more) like corprates, rates, EM etc. I can tell you for a fact they were down near 10% in March 2020 (which means they were down even more intramonth) but they happened to be able to raise another $1bn for April 2020. FWIW the S&P was down like 12.5% that month... So the fund's downside capture was huge.
So the returns aren't really good and they don't protect to the downside in general... so what's the point of such a hedge fund in your portfolio? Either find something to lower vol or just be long equities and more liquid.
I'm saying this as a former HF PM and as a former and current LP allocator.
That said, shop has a lot of money, can pay and has a good name and maybe a good career stepping stone. Can't say for working there..
Good Luck
I am familiar with the firm. Some of the points Jamoldo has made are true; yes, the 10% annualized is since inception, they have had a few quieter years (last 5 years ~6%) and Mar 2020 wasn't a great month. That said I wouldn't say that the fund has negative convexity wrt the stock market, for instance despite the big stock market losses last year the fund held in, and looking at all previous episodes of equity contraction, the fund shows a minimal beta. I would agree with Jamoldo though that their returns suggest some tail risks not being accounted for. Hear they are having a very good year so far. Higher rates and vol offer a more attractive backdrop for their strategy.