Unstructured Finance

John Thaler’s JAT thaws some more in December

December 22, 2011

By Katya Wachtel

John Thaler’s hedge fund, JAT Capital, had a meteoric rise through much of 2011, generating a 38 percent return at its peak in early September.  Since then, Shumway Capital alum has ebbed, though he’s still beating a ton of his competitors.

Through December 16, JAT fell 1.2 percent, according to an investor.

The fund remains up 14 percent year-to-date though, and given the average hedge fund was down about 4.4 percent through November, JAT investors have something to smile about. Though they have less to smile about than they did a few months ago.

Others are grimacing, since many of the industry’s heavy-hitters have taken a beating this year. It’s no secret that stars like John Paulson,  Mark Kingdon and Lee Ainsle are sustaining double-digit losses. Through December 16,  Paulson’s Advantage Plus fund is down 52 percent year-to-date; Kingdon’s Offshore fund is down about 19 percent; and Ainslie’s Maverick Fund is off about 15 percent.

But some are doing better than others. Steve Cohen’s SAC Capital, for example, is up about 8 percent through November, according to people familiar with the fund’s performance.

And one of 2011′s best performers, James Simons of Renaissance Technologies, rose again in the first half of December. His Renaissance Institutional Equities LP is up 33.3 percent for the year, according to HSBC’s Private Bank.

Now, Simons is the one to beat. However, Thaler’s JAT was ahead of Renaissance for much of 2011.

Late this year, JAT Capital began to suffer significant losses on one of its biggest h0ldings — Green Mountain Coffee Roasters. Unfortunately for Thaler, he got caught on the wrong side of David Einhorn’s short critique of the coffee maker.  Reuters and Unstructured Finance co-founder Jennifer Ablan discussed the big short with the Greenlight founder himself  earlier this week.

Some of that recent disappointment of his portfolio may explain Thaler’s decision to stop reporting his performance numbers to HSBC’s Private Bank in the middle of October. It was that month, Einhorn went public with his short attack on Green Mountain and things starting coming back down to earth for JAT Capital.

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