Hedge funds posted fourth month of declines in September: HFR data

BOSTON (Reuters) - Hedge funds are down 1.35 percent this year after a fourth straight month of losses in September, which marks the longest consecutive period of declines since the financial crisis, data released Wednesday shows.

Hedge funds on average dropped 1.07 percent last month, following a 2.27 percent decline in August, according to data from Hedge Fund Research.

The portfolios, favored by pension funds and wealthy individuals, fell an average 0.47 percent in July and dipped 1.23 percent in June.

Hedge funds often promise to make money in all markets and are still faring better than the Standard & Poor's 500, which is off 3 percent for the year.

Slower growth in China, falling energy prices, and a sharp drop in healthcare and biotechnology stock prices hurt many hedge funds last month, putting some managers on course to post their first down year since the 2008 financial crisis. Healthcare-oriented hedge funds on average dropped 3.49 percent last month, HFR data shows.

Investors who take big positions in a stock and then push management to improve operations had an even tougher September, losing on average 5.17 percent, which leaves them off 4.70 percent for the year.

Activist investor William Ackman's $16.5 billion Pershing Square Capital Management is among the month's big losers as one of his portfolios is now down 12.6 percent for the year.

Tiger Global, another prominent hedge fund, fell 4.8 percent in September and is now off 5 percent for the year, an investor said.

But there are also success stories. John Burbank's flagship Passport Global fund gained 2.8 percent last month and is now up 18 percent for the year, while his Special Opportunities fund gained 5.5 percent, leaving the fund up 37.8 percent, an investor said.

Hedge fund Bridgewater's Pure Alpha II fund dipped 0.1 percent in September and is now up 3.9 percent for the year after a 6.9 percent drop in August.

(Reporting by Svea Herbst-Bayliss and Lawrence Delvingne; Editing by Steve Orlofsky)

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