A year after its biggest funds lost money, Carlson Capital bounced back in 2018 with solid performance in its two flagship funds, Black Diamond and Double Black Diamond.
According to a document seen by Business Insider, the $530 million Black Diamond fund returned 2.4% in 2018 after a nearly 6% loss the year prior. Carlson’s $3.2 billion Double Black Diamond fund, meanwhile, returned 2.6% in 2018 compared to a 4.5% loss in 2017.
The firm’s overall assets, which dropped by roughly a billion in the second half of 2017, fell slightly from $8.2 billion at the start of the year to a little less than $8.1 billion at the end of 2018.
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Carlson’s returns would have been higher if not for the fourth quarter of 2018, when many hedge funds’ gains for the year were wiped out by market volatility. Out of Carlson’s five strategies, only the event-driven $675.4 million Black Diamond Arbitrage fund had positive returns in the fourth quarter.
The fund that had the worst performance in 2017 was the manager’s long-short equity strategy, Black Diamond Thematic, which lost 22.1%. The strategy finished 2018 down less than 1%.
2018 was a brutal year for the hedge-fund industry, with the average fund declining by more than 4%. Traditional stock-picking strategies were hit hard by outflows and performance woes, which have already pushed several fund managers to pull the plug on their equity offerings this year.
A spokesperson for Carlson declined to comment on the fund’s performance.
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