The depth and duration of COVID-19’s economic impact is a subject of debate among families the world over. But for Ricky and Andrew Sandler, their diverging views have broader implications: both run multi-billion dollar stock-focused hedge funds
“People are totally missing what is happening here. Every new headline, every new hysteria is making people more nervous and it’s actually very, very positive,” he said, recommending that viewers borrow against their mortgages to buy stocks.
It’s a scenario playing out across Wall Street. The coronavirus killed off the longest-running bull market in equities, meaning most hedge funds are nursing losses, with the average stock-focused fund down about 9.5% in March and 13% lower for the first quarter, according to data tracker HFR. Representatives for Andrew and Ricky declined to comment and would not make them available for interview.The Sandler brothers followed their late father, Harvey, into investment management in the 1990s. Andrew joined the family firm while Ricky set up his own fund. Until recently the brothers, now in their early 50s, worked a few blocks apart in midtown Manhattan offices.
In contrast to his younger brother, Andrew’s caution meant he missed out on the full market surge of recent years. His Sandler Plus fund gained just 2.75% in 2019, according to an investor letter, compared to a gain of nearly 14% by the average stock focused fund. “The Coronavirus could serve as a catalyst for disappointing global growth as well as specifically disrupt certain supply chains and consumer businesses,” the firm noted in a January 28 Lyxor/Sandler U.S. Equity Fund report.
Andrew’s Sandler Plus funds surged approximately 9.5% in March, putting its year-to-date performance at nearly 15%, according to an investor update reviewed by Reuters.On March 16, the same day that Ricky took to CNBC to talk up the markets, Andrew warned a friend that he was not surprised by 1,000 point single day declines for major stock indexes. “Going to be more. Stay liquid my man. This is fucked up,” he wrote on Facebook.
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