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.
The results of a poll of hedge fund managers conducted by Hedge Fund Research showed that 53% of them (687 managers) incorporated ESG factors and sustainability metrics into their investment processes. However, 47% (609 managers) said they did not do so. The results are significant, coming as they do ahead of the 2021 UN Climate Change Conference (COP26) in Glasgow this weekend.
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More Stories on Hedge Funds
Don Steinbrugge of Agecroft Partners released his annual list of hedge fund trends and predictions for 2020. He covers a few common bases: Hedge fund assets will set a new record, a reduction in expected returns, and how long-short specialty funds will see a boost to AUM.
Famed short-seller Andrew Left’s Citron Capital published its Annual Investor Letter for 2019 on Monday.
“In 2019, our first full year of operation, Citron Capital, LP generated a gross return of 56.4% and net return of 43.3%,” wrote Left. “The Fund’s average exposure during 2019 was 75.8% long and 80.3% short.”
Pershing Square 2019 performance came in at 58.1%. The huge windfall comes after four straight years of losses. That return was also double the return of the S&P 500. In a banner year for passive investors, Ackman showed that activist investing can work with the right formula.
Marshall Wace has taken a short position against Danske Bank. The Danish FSA said that the firm has a short position that reaches the threshold of 0.5% of issued shares.
MIG Capital is pushing Groupon to push its CEO Richard Merage on the shopping-deal provider’s board of directors. The activist fund with $1 billion in AUM owns 5% of Groupon stock. It wants to push Merage on the docket for a vote Groupon’s 2020 annual meeting.
The Horseman Global Fund saw a 35% decline in 2019 as aggressive bets against the market failed to deliver. The fund hiked its net short position to a record 111% of gross assets in October. However, the S&P 500’s 31.5% surge in 2019 pummeled the fund’s positions.
The blistering run-up by the S&P500 left hedge funds in the dust.
Hedge funds really are in the dock. Can they really make money in all market conditions? Their stark underperformance compared to the S&P500 during 2019 is hard to live down.
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Hedge fund Greenlight Capital finished 2019 up 13.8% after a small dip in December. The iconic value-oriented fund saw a 0.3% decline last month to finish off the year, according to Bloomberg. As we reported last month, the fund also saw a 1.8% decline in November.
Korea’s largest hedge fund is under probe for involvement in an alleged US Ponzi scheme Lime Asset Management, the large Korean hedge fund, is accused of continuing to market a trade finance fund when it knew the investments could land in trouble. Lime had raised client funds amounting to 243.6 billion won and a loan…
Tom Steyer used to run a hedge fund. Now, he wants to be the President of the United States. His campaign strategy, however, is quite unprecedented. Both Steyer and Michael Bloomberg are buying up television advertising space at a breakneck pace.
Private equity investment in Germany topped out at about 32 billion euros, according to EY. That figure represents a year-over-year increase of about 80%, the firm said this week. Private equity investment in Europe’s largest economy hit 17.9 billion euros in 2018.
Hedge Funds: Investors Looking to Bail? The SS&C GlobeOp Forward Redemption Indicator is at a 12-Month High
The SS&C GlobeOp Forward Redemption Indicator for December is up marginally from last month.
Simply put, the SS&C GlobeOp Forward Redemption Indicator shows how much investors are looking to bail from their hedge fund investments. For December 2019, the indicator read 4.95%, up from 4.81% in November.
The indicator represents the sum of forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp on the SS&C GlobeOp platform, divided by the Assets under Administration (AuA) at the beginning of the month for SS&C GlobeOp fund administration clients on the SS&C GlobeOp platform.
Josh Samuelson is departing PointState Capital, the firm he co-founded. According to a letter from co-founder Zach Schrieber, Samuelson “has decided to retire from investment management.” The manager plans to stay at the hedge fund for “several months” while leadership changes.
Hedge fund returns in 2019 averaged 8.5% but fell well short of the broader market rally. Heading into Monday, the S&P 500 has gained 29.1%. HFR says that the firm reached 8.5%, a figure that was even well short of the U.S. Bond Market’s gain of 14.5%.
Marcato Capital Partners will showdown after two years of lackluster returns. Multiple media outlets reported the developments on Sunday. According to such reports, Marcato founder and PM Richard McGuire started telling his investors of plans to shut the fund last week. Given that the portfolio is currently holding a lot of cash, McGuire plans to return the money quickly, the report indicates. The firm has faced a series of redemption requests over the last few months.
BlueCrest Capital has earned 50% gains since the start of the year. This is a remarkably solid return after the company returned outside investor capital four years ago. The Financial Times says that the firm has capitalized on emerging-market bonds and trading interest rates. A 50% return through November is well ahead of the 9% earned by by the average hedge fund in 2019. Over the first 11 months, hedge funds are averaging returns of 9%, according to HFR. The S&P 500, meanwhile, has gained 28%.
Standard Life Investments will now manage the LF Woodford Income Focus fund, according to Link Fund Solutions. The arm of Aberdeen Standard Investments will replace Neil Woodford, whose flagship fund collapsed in October. Regulators suspended the fund that month thanks to ongoing challenges around its liquidity. ASI will take over the $351 million fund on December 31. Link said in a statement last week that it will reopen the fund in February 2020.
A rally in the global markets pushed November hedge fund returns higher.
The Preqin All-Strategies Hedge Funds benchmark gained +1.29% in November. That built on a +0.88% return in October and +0.4% in September. Hedge funds got a tailwind from the global rally in equities in November.
ValueAct Capital Gets Access to Confidential Citi Information for Another Two Years. In return, ValueAct will support Citi’s board and management.
ValueAct Capital, one of the most followed activist hedge funds in the industry, first engaged with Citi in early 2018. Back then, ValueAct Capital acquired a stake in Citi, which is currently 1.3%. In January 2019, Citi and ValueAct entered an Information Sharing and Engagement Agreement valid through December 2019. This agreement has been revalidated for another two years.
Is Chewy a good stock to buy? Not according to David Einhorn. In his 2nd quarter shareholder letter, the Greenlight Capital manager talked disparagingly about Chewy (CHWY), the online pet products company.
Hedge fund performance hasn’t lived up to the hype over the last ten years. This, according to the Executive Director of the Richard A. Mayo Center for Asset Management, University of Virginia Darden School of Business.
Some of 2019’s best performing hedge funds are based out of Singapore.
Chong Chin Eai’s Vanda Global Fund is up over 300% this year. He started his hedge fund in Singapore with $24 million from friends and family but now runs $222 million. Annualized returns are 39%, though volatility is a stomach-churning 72%.
What’s interesting is that you couldn’t get a leaner hedge fund than Vanda.
Kenneth Griffin’s wealth is usually identified with his hedge fund. The flagship Wellington fund is up 16.7% this year through November. According to a Bloomberg story, Griffin made $ 870 million from Citadel LP, his hedge fund operations, in 2018. This is not an inconsequential sum by any standards.
What is not so well known, however, is the profitability of Citadel Securities, Griffin’s market-making business. This firm earned $5.7 billion in gross revenue in 2018, and EBITDA of $2.2 billion. Griffin is said to own 75% or more of both businesses.