LibreMax Partners returned 3.15% for the fourth quarter, bringing its year-to-date return to 11.67% for 2024. Cumulatively since inception in 2010, the firm has returned 147.2% with an annualized return of 6.56% since inception.
S&P 500 Total Return Index gained 2.41% in the fourth quarter and 25.02% for the full year, while the HFRI Fund Weighted Composite Index was up 1.42% for Q4 and 9.75% for 2024. The HFRI RV Fixed Income Asset Backed Index gained 2.12% for the fourth quarter and 9.65% for the year, while the Merrill Lynch High Yield Cash Pay Index was up 0.13% for Q4 and 8.04% for the year.
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LibreMax had about $11.4 billion in assets under management as of the end of December.
Interest rates
Greg Lippmann, whose short of subordinated tranches of residential mortgage-backed securities at the beginning of the Global Financial Crisis was chronicled in The Big Short, noted that yields on Treasury notes rose during the fourth quarter even though the Federal Reserve finally started cutting interest rates.
In his Q4 letter to investors, which was obtained by Hedge Fund Alpha, Lippmann added that the markets began pricing in reduced expectations for additional rate cuts. He also pointed out that issuance in the credit markets was healthy alongside narrowing spreads, which some saw as a sign that the market was overextended.
