Weak financials boost long/short portfolios

HSBC manager highlights opportunities among distressed sector

Long/short portfolios have enjoyed strong returns in recent months from playing severe weakness among US financials, according to HSBC fund of hedge funds manager Tim Gascoigne. The manager, who runs the group's $144.8m Global Absolute portfolio, said distressed managers with short positions in US sub-prime mortgages remain profitable. "Some managers have been shorting mortgage-related companies, such as reinsurers and servicers, with equally positive results," he added. He believes hedge funds will continue to outperform public markets in 2008 and emerging regions will remain positiv...