Monthly Letter April 2016

There have been a number of high pro le blow-ups in the hedge fund community in the past 12 months. The asset class as a whole has not been delivering the kind of returns that one could (should) expect. We would argue that a en on has been accentuated because it is high pro le concentrated funds that have had a tough me. Goes without saying, that if you have 15% of NAV in a company and you are wrong by 90% (long or short) you will have a hard me making that up with the rest of the por olio. Even hedge fund managers are wrong from me to me.

Madrague’s strategy remains the same, however, as it has been for the past decade. We meet companies and we meet analysts on a con nuous basis to si through our universe in search of long and short posi ons. In the rst four months of 2016 we have had c140 company mee ngs and c180 mee ngs with analysts. This is in line with our run rate over the last decade. We have been to London, New York, Houston, Milan, Moscow and Copenhagen in the rst four months of 2016. These trips are done to meet companies and people face to face to “kick the res”.

Madrague had another good month in April, +2.22% which brings the year to date gure to +1.51%. With the European markets down around -7% for the year we are happy that we have been able to preserve capital and generate a small apprecia on. Also, when measuring perfor- mance on a 12-month view, the European markets are down c16% and Madrague is -0.57%. It is not something that will make you rich in absolute terms, but it gives you the opportunity to hang in there un l the market recovers.

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