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.
Unlimited, a new investment firm purpose-built to give all investors exposure to the alpha-generating potential of alternative investment strategies without the high fees and adverse tax implication, has been launched by Bob Elliott, former member of the Investment Committee at Bridgewater Associates. The firm has debuted the Unlimited HFND Multi-Strategy Return Tracker ETF (NYSE: HFND), an actively managed fund which uses a sophisticated machine learning engine to track the gross-of-fees returns across several hedge fund indices.
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More Stories on Hedge Funds
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.
British Airways announced plans to suspend flights to mainland China this week. The coronavirus continues to deter commercial travel among tourists and business people. We’ve now seen hedge funds take direct aim at the stocks of major airline companies that service the Asian markets.
Martin Shkreli now faces new charges over the alleged price inflation of the drug Daraprim. The infamous “Pharma Bro” and his hedge fund bought the rights to the drug that treats malaria and foodborne illnesses.
Effective end-March, global macro hedge fund manager Greg Coffey will not accept new money into his two-year-old portfolio.
Greg Coffey’s Kirkoswald Asset Management, which last year earned 28%, and trades in global equities, bonds, and currencies, will stop accepting new investments in a bid to protect returns.
With a 120% Gain, Bill Miller’s Value Partners 1 Fund Absolutely Crushed It in 2019. Best of all, legendary investor Bill Miller scored that humongous return doing absolutely nothing in the last quarter.
That’s right, Miller neither sold or bought anything in the dying months of 2019. That takes some doing for an actively managed fund, but Miller kept his hands off a portfolio that held names such as Amazon (+23% in 2019), and small-cap biopharma Flexion Therapeutics (+83% in 2019).
Hyundai Motor Group has shaken off activist hedge fund Elliott Management. According to South Korean media, Elliott Management ditched its stake in the auto giant at the end of 2019. The activist fund had previously attempted to secure board seats and pushed for large dividend payments.
TCI and Lone Pine led the list of top-performing hedge funds for last year.
Chris Hohn’s TCI and Stephen Mandel’s Lone Pine Capital logged gains of $8.4 billion and $7.3 billion respectively in 2019. However, Ray Dalio’s Bridgewater ($58.5 billion) and Soros Fund Management ($43.9 billion) topped the list based on gains from the start date of the hedge funds.
Regulations hobbled banks’ risk-taking abilities after the last global financial crisis. But risk never really went away, it just switched masks. And hedge funds are the new face of unbridled financial adventurism, according to the IMF and the European Central Bank (ECB).
Hedge fund performance was strong at the end of 2019. The Preqin All-Strategies Hedge Fund benchmark returned +2.00% in December, bringing the 2019 return to +11.58%. Funds of hedge funds gained 1.32% in December, generating a 2019 return of +8.34%, the highest annual return since 2013 (+8.82%).
NYMEX and ICE WTI data show that hedge funders were net sellers of crude oil for the week ending January 14. Funds sold roughly 99 million barrels in the six primary crude futures and options contracts. With funds less focused on geopolitical tensions in the Middle East, concerns are rising about the status of the global economy.
Kirkoswald Asset Management will stop accepting new investors when the fund hits nearly $2 billion. Reuters reports that the two-year-old fund will close itself to new investors at the end of March. Concerns about new capital impacting returns are the reason for the decision, according to the report.
Such is the power of Kyle Bass, the hedge fund manager who correctly predicted the crisis from US subprime mortgages in 2007. The Hong Kong Monetary Authority deemed it appropriate to hold a press conference to debunk the latest doom-and-gloom prediction from Bass – that Hong Kong is on the brink of a “full-fledged banking crisis” in 2020. Bass is short the Hong Kong dollar.
The Global Alternatives Outlook was released by JPMorgan Asset Management this week. The report provides a 12-18-month outlook across key alternative asset classes. The report also the views of the CEOs, CIOs, and strategists from the firm’s 15 distinct alternatives investment engines. We take a look at the key takeaways from the report.
Bridgewater Co-CIO Greg Jensen believes that gold prices could hit $2,000 or more. Jensen told the Financial Times this week that geopolitical uncertainty and inflationary policies could press gold at least 30% higher. In the conversation, Jensen cited ongoing tensions between the U.S and Iran. He also mentioned concerns about income inequality in the United States.
Change is afoot at BlackRock, the world’s largest asset manager. The firm is finally veering around to using its enormous financial and investment clout to push for climate action, according to Reuters.
BlackRock CEO warned in his annual letter to investee CEOs, titled “A fundamental reshaping of finance,” that “climate change has become a defining factor in companies’ long-term prospects,” and that markets have been slow to reflect the growing global concerns on climate change.
Tribune Publishing buyouts are coming. And it didn’t take long for newsroom jitters to become a reality. Just two months after Alden purchased a 32% stake in the publisher, it has offered buyouts to Tribune employees. The hedge fund is notorious for reducing employee headcounts and expenses at the publications it purchases.
Bain to Raise Up To $7 Billion For New Long-Only, Public Equities Fund. Alternatives investments specialist Bain Capital will be less ‘alternative’ soon after its proposed fundraise. The new fund will be overseen by Josh Ross, who has been running the firm’s public equities group since 2017.
Hedge fund Citadel issued a statement last week that distanced itself from a former trader who profited from non-public information. Michael Mindlin worked for Citadel between June 2016 and June 2018. However, U.S. regulators just fined him for illegally profiting from tips tied to the Affordable Healthcare Act in 2014. At the time, Mindlin worked for Stelliam Investment Management.
PointState Capital has moved to stop investors from pulling all of their capital in full. According to an investor letter seen by Bloomberg, the company will only allow recent redemption requests to obtain 88% back in cash. The remaining 12% will be distributed as portfolio shares for new vehicles that have “somewhat limited liquidity.”
The DailyAlts Playbook – “Clown Airplanes”, Russian and Chinese-focused funds, AQR staff cuts, and Brexit Beginnings – January 10, 2020
Today, the DailyAlts Playbook talks “Clown Airplanes”, Russian and Chinese-focused funds, AQR staff cuts, Brexit Beginnings, and an offer for our new readers.
AQR Capital has $186 billion under management. Its $2.1 billion Style Premia Alternative Fund lost 8.2% in 2019. And now, the company is cutting its staff for the second straight year. Bloomberg reports that the firm will cut between 5% to 10% of its staff after outflows hit the company again this year.