2008 Headlines
Cayuga MBA Fund Generates 2.65% Return for the First Quarter 2008
Beats all major indices including S&P 500 and Dow Jones Industrial Average
April 17, 2008 | Ithaca, NY | The Johnson School at Cornell University today announces that the student run Cayuga MBA Fund, LLC, a market-neutral hedge fund, posted solid gains during the first quarter of 2008, returning 2.65%, compared to a loss of 4.79% for the HFRX Equity Hedge Index and a gain of 0.03% for the HFRX Equity Market Neutral Index. This builds on the fund's strong performance in the fourth quarter of 2007 and also compares favorably to all of the major indices for the first quarter of 2008 including the S&P 500 and the Dow Jones Industrial Average, down -9.44% and -7.5% respectively for the quarter.
One of the quarter's stronger long positions was Devon Energy (DVN), an oil and gas exploration company. The Cayuga Fund correctly bet that the price of natural gas would rise between November 2007 and March 2008, which benefitted Devon. The Fund was also bullish on Devon's move into the Canadian oil sands which contain a heavier type of oil that, due to the rising price of crude oil, is now economical to bring to market.
R.H. Donnelley Corporation (RHD), a telephone directories publisher and search engine operator, was one of the quarter's strongest short position performers. The company's weakening operating performance reflects a tightening of customer spending on print advertising in most markets.
According to Andrew Herr (MBA '09), investment relations representative for the Cayuga Fund, "Most agree that the U.S. is currently experiencing a recession. The Fed's moves helped to quell jittery markets, however, we expect continued volatility as investors attempt to work through their own confidence in the economic outlook, given the housing slowdown, rising oil prices, and continued shakiness in the credit markets. We are cautiously optimistic regarding the second half of the year and will continue to follow our disciplined strategy of quantitative and fundamental investing with a keen eye on risk management."
The Cayuga MBA Fund is an investment vehicle that aims to provide a competitive rate of risk-adjusted return to its investors while enhancing the educational and professional opportunities of Cornell's Johnson School MBA students. It is supported by the analytical platform of the Parker Center, cutting-edge research by faculty members, and extensive participation by student portfolio managers. The Parker Center is a classroom providing real-time stock quotes, international data feeds, and financial analysis software and data valued at more than $1.8 million per year in licensing fees and comparable, if not better, than the resources found at many Wall Street firms.
The Cayuga MBA Fund is managed by 18 portfolio managers, two quantitative analysts, a trader, and an investor relations manager who, under the guidance of faculty and outside investment advisors, work to fulfill the investment objective of the fund to achieve consistent positive returns that are uncorrelated with equity market benchmarks, and to maintain significantly lower volatility than the broader market.
See more information on the Cayuga Fund and the Parker Center.
Contact:
Deirdre G. Snyder
Public Relations Officer
The Johnson School at Cornell University
(607) 255-3494
Dgs37@cornell.edu
Lakshmi Bhojraj
Director of the Parker Center for Investment Research
The Johnson School at Cornell University
(607) 255-1135
Lr10@cornell.edu
