With global hedge fund assets at roughly $3.45 trillion (and growing by double-digit percentages each year), money managers have a greater influence on public and private markets than ever before. DailyAlts covers every element of the hedge fund industry – from changing performance structures to manager strategies, from regulatory oversight to activist holdings, and from new fund launches to the liquidation of underperformers. This channel is your one-stop-shop for daily news and insights for the influential and topical hedge fund space.
A market survey by alternatives technology provider Vidrio Financial shows that fears of inflation have helped move substantial fund allocations during the first half of 2021 to alternative assets such as private equity and hedge funds. Market sentiment has tended to favor these asset classes during inflationary periods in the economy. Total hedge fund assets burgeoned to nearly $4 trillion by the end of the period, according to HedgeWeek.
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While the main fund is down 13.5%, the listed shares that trade over the counter in the United States are currently down around 30% year to date as investors have adopted a risk-off position and sold shares aggressively. Since its inception in 1996, the fund has averaged 14.5%, making it one of the top-performing hedge funds over that period. Investors may be abandoning ship at the wrong time.
The stock is trading at 54% of book value right now. Given the collapse of global markets right now, the book value may be overstated a bit, but as of a week ago, the published Net Asset Value was $18.34 a share versus the current price of less than $12. Even if the fund has declined in line with the market return the shares are still trading at a substantial discount to the value of the stocks they own,
Value investor Seth Klarman has emerged from his bearish slumber. The head of Baupost Group announced he had spent $1.5 billion on new investments in recent weeks. Bloomberg reports that Klarman sees significant value due to fears about coronavirus and valuations. The hedge fund manager also announced he is seeking more investor capital for his $29 billion fund.
Hedge fund manager Ricky Sandler said Monday that he is buying stocks while markets continue their historic selloff.
In an interview with CNBC, the head of Eminence Capital said that he believes that the market reaction has been too extreme.
Hedge fund manager Ray Dalio wrote this week that he is very concerned about the state of the economy. The combination of coronavirus and zero interest rates “really worries” him, according to a note released today.
Billionaire investor Carl Icahn told CNBC on Friday that he has been shorting the commercial bond market. The activist investor said that his short was his “biggest position by far” in an interview on Friday. Specifically, he is targeting corporate offices and shopping malls. Based on the recent downturn in the markets, he’s likely doing well for himself.
Icahn said he expects U.S. commercial real estate to pull back sharply as we saw with housing in 2008.
Coronavirus has hit one of Wall Street’s top financial shops. Multiple media outlets report that an employee at Point72’s Hudson Yard’s office has contracted Covid-19. The Wall Street Journal was the first to report the news, citing an internal email from the fund.
Pershing Square Capital founder Bill Ackman sent a letter to investors about the threat of coronavirus on Tuesday. His statement came shortly after the Federal Reserve slashed interest rates by 50 basis points.
Edward Bramson and his fund Sherborn Investors Management is waging a campaign to oust Jes Staley from the helm of Barclays (NYSE: BCS). According to reports, Sherborne is seeking his ouster due to Staley’s relationship with the deceased financier and convicted sex offender Jeffrey Epstein. In a letter sent to shareholders, the firm urged the board to “rescind their unanimous recommendation to re-elect Staley” as a director at its next annual shareholder meeting.
Electric vehicle manufacturer Nikola Corp. has plans to go public and merge with a publicly traded special purpose acquisition company. That SPAC is backed by hedge fund ValueAct and Fidelity. According to reports, the firm will engage in a reverse merger with VectoIQ Acquisition Corp. (NASDAQ: VTIQ). The new company will trade under the name Nikola Corp. and carry a valuation of $3.3 billion.
Twitter Inc (NYSE: TWTR), which owns the social media and tweeting platform so loved by President Trump, is under siege. Elliott Management, the feared activist hedge fund owned by billionaire Paul Singer, has accumulated a sizable stake in the company, led by Jack Dorsey.
Hedge fund billionaire Chris Hohn has launched a platform aimed at reducing financing for coal-fired power plants. The ESG crusader wants central banks to effectively stop the financing of coal power plants that he deems a threat to the global climate.
Former hedge fund manager Whitney Tilson has called Berkshire Hathaway (NYSE: BRK.A) the to retirement stock. Tilson, who now writes for Empire Financial Research, issued a note this week praising Warren Buffett’s firm as the “No. 1 Retirement Stock in America.”
Hedge fund assets under management (AUM) reached an all-time high for the industry by the end of 2019.
A new report by Preqin shows that assets reached $3.66 trillion thanks to strong performance offseting redemptions.
During the fourth quarter, Preqin says that outflows totaled $15.4 million. It was the seventh-straight quarter of outflows.
Activist hedge fund Third Point has taken aim at the 172-year-old insurance giant Prudential (LON: PRU). According to a new filing, Dan Loeb’s shop wants to split the firm into two operations and shutter its British office. This would effectively end the country’s 18-decade presence in England.
Santander Asset Management announced it has launched a new hedge fund called Santander Patrimonio Diversificado.
Its portfolio will invest in fixed income, equities, and absolute return funds. It will also dabble in venture capital, private debt funds, and real estate
According to a press release, the fund will focus on the U.S., Europe, Japan, and emerging markets. It has also set a weight limit for diversification at 5%. The fund will also have a sustainable bias and will focus on aligning with the firm’s broader ESG goals.
Pierre Andurand and his hedge fund had a tough start to the year. Andurand Capital Management shed 8% last month due to the slump in oil-and-gas commodities, according to a report from the Financial Times. Last month, crude oil temporarily rallied after the U.S. and Iran appeared on a path toward war. However, once tensions died and concerns about coronavirus and global growth emerged, crude prices went in reverse.
Elliott Investment Management has built a 3.04% stake in Dutch insurer NN Group (OTCMKTS: NNGRY), according to a filing with AFM this week. Paul Singer’s hedge fund said that the investment is a reflection that it believes “in the material and sustainable value-creation opportunity that exists at the company.” Under rules with the Dutch regulator, companies must file when they breach the 3% ownership level.
Activist hedge fund Kerrisdale Capital has taken a short stake in Match Group (NASDAQ: MTCH). The online dating operator owns Tinder and Match.com. The activist fund expects that shares will fall due to increasing threats around government regulation and intervention.
Rishi Sunak has become the new U.K. Chancellor after the sudden resignation of Saji Javid. The news comes amid a shakeup in Prime Minister Boris Johnson’s cabinet. It was a sudden and surprising announcement given Sunak’s relatively short career in politics. The son-in-law of a billionaire had previously worked at Goldman Sachs and at hedge funds across London.
Kyle Bass refuses to apologize for a deleted tweet that said the U.S. should allow coronavirus to “rampage through the ranks” of the Communist Party. Bass, the founder and CIO of Hayman Capital, found himself in a Twitter fight with the EIC of a Chinese newspaper.
Curtis Sneden, president of the Greater Topeka Chamber of Commerce is concerned about repercussions from activist hedge fund Elliott Management’s broadside against regional utility Evergy, Inc. (NYSE: EVRG). Feared activist hedge fund Elliott wrote to Evergy on January 21 requesting changes that would create value for shareholders. New York-based Elliott is owned by billionaire Paul Singer.
It owned an “economic interest” in Evergy worth $760 million as of the date of the letter.
Pershing Square Capital has exited its stake in Starbucks Corporation (NASDAQ: SBUX). According to reports, Bill Ackman’s hedge fund announced the divestiture during an investor presentation today.
Starboard Value is pushing for eBay (NASDAQ: EBAY) to sell or spin off its Classifieds Group. The hedge fund took a stake in the company one year ago beside fellow activist Elliott Management. Both firms have pushed for spending cuts and the divestiture of assets like online ticket marketplace StubHub.
Chinese mutual funds are facing new regulatory scrutiny in the face of a sharp selloff Monday. During the first day since the Lunar New Year holiday, the Shanghai Index fell by 7%. Chinese officials are doing everything they can to prevent a sharper decline.