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More investment professionals will be required to act in their customers’ best interest when providing advice about their retirement money.

Global capital markets technology platform provider Trading Technologies International (TT) has introduced TT Splicer, a new TT Premium Order Type that intends to enhance functionality for synthetic multi-leg spread trading.

In a statement, Joe Signorelli, EVP & Managing Director, Quantitative Trading Solutions, said: “TT Splicer combines the ease and flexibility of TT’s market-leading Autospreader with the power of our best-in-class execution algos to uniquely minimise slippage and optimise trade execution when trading synthetic multi-leg spreads.”

According to a press release, TT Splicer enables users to leverage Autospreader to create a synthetic multi-leg instrument on any exchange – even if the exchange doesn’t list those products – and then utilise one of TT’s built-in algos to seamlessly manage order execution. TT Splicer coordinates leg execution across colocated servers and tracks all fills in real time, while dynamic custom ratios balance risk.

London-based hedge fund manager Nickel Digital Asset Management’s flagship Diversified Alpha Fund has delivered record quarterly and monthly performance, according to the latest data from BarclayHedge.

Data from BarclayHedge shows the fund achieved a net 11% return in the first quarter of 2024, as compared to 0.6% return of the HFRX RV Global Multi-Strategy Index over the same period.

The record quarterly performance was fuelled partly by a record net 5.3% return in March alone, driven by an exceptional mix of volatility, expanding trading volumes and high dispersion across crypto assets traded by Nickel.

The recent record performance comes on the back of last year’s 20.1% annual return. Since launching in February 2021, the fund has now generated a net return of 41%.

Nickel oversees $180m across several funds. Its Diversified Alpha Fund has historical volatility of 8.5% and is designed to generate non-correlated solid returns in constructive environments while protecting capital in challenging markets, according to a press release. The fund runs fully systematic strategies ranging from statistical arbitrage, relative value and funding arbitrage to momentum and mean reversion.

Digital asset investment products saw outflows for the second consecutive week totalling $206m, with trading volumes in ETPs dipping slightly at $18bn, according to the latest Digital Assets Fund Flows Weekly from CoinShares.

Bitcoin saw $192m outflows, but few investors saw this as an opportunity to short, with short-bitcoin seeing $0.3m outflows.

Meanwhile, blockchain equities saw its 11th consecutive week of outflows totalling US$9m as investors continue to worry over the consequences of the halving on mining companies, according to CoinShares.

Aspect Capital, a London-based quant hedge fund with $7.5bn in AUM, has racked up a 21% return so far in 2024 in its flagship fund on the back of winning bets on currency markets and commodities, according to a report by Bloomberg.

The report cites Director of Investment Solutions Razvan Remsing in confirming the fund’s performance, which is ahead of the average 14% return for trend-following funds and 3% for discretionary macro managers over the same period, based on Société Générale’s indexes.

“The majority of our returns are from the dispersion in currencies and commodities,” Remising said.

The firm’s market-following trading models have profited from positioning for a stronger dollar, as markets veer toward Federal Reserve rates staying higher for longer, as well as shorting the Japanese yen and the Swiss franc — two of the year’s worst-performing major currencies against the dollar.

In commodities, Aspect has steadily trimmed a long position in cocoa after it hit record highs, while upping its exposure to gold and oil, which have both seen gains amid ongoing tensions in the Middle East.

High Ground Investment Management, a London-based hedge fund run by Edgar Allen, has appointed former Adelphi Capital Partner Henry Guest to run its second hedge fund, which is due to launch in Q4 2024, according to a report by Bloomberg.

The report cites High Ground in confirming that Guest joined the firm last week and will focus on a concentrated portfolio of growth companies in the healthcare and technology sectors in Europe. The new fund will operate alongside the firm’s value-biased hedge fund, which Allen launched in 2019.

High Ground now manages around $625m, having launched with just $10m five years ago.

Mountaineer Partners Management, an opportunistic hedge fund focused on value and event-driven investments, has written an open letter to Vishay Intertechnology’s board of directors, urging the implementation of $600m share buy-back programme.

Montaineer which owns over 2m shares of Vishay’s common stock, equating to 1/7% of the company, says the electronic components maker has an “irrationally low valuation” and should use excess cash on its balance sheet to repurchase stocks and boost shareholder value.

In the letter, Montaineer wrote: “The board should approve and implement a $600m accelerated repurchase. Vishay has more than $800m of cash and equivalents. Moreover, the company’s total liquidity is over $1.5bn, which represents more than 50% of the company’s current market capitalisation.

“Our research indicates that should the company combine a $600m accelerated share repurchase with the $725m of repurchases through 2028 indicated in the Investor Day plan, Vishay could repurchase 45% of shares outstanding at current prices.”

This data-led report provides an update on the rebounding hedge fund launch market. With 2024 set to be a historic year for new hedge fund launches, as an unprecedented number of well-pedigreed managers starting up, Hedgeweek selects the Top 20 prospects and analyses the wider environment facing new hedge funds – from ops to fundraising, strategy considerations to performance. Get all the intel, plus insights from the sector’s leading firms, in this exclusive Hedgeweek special report, sponsored by Marex.

Firms like Experian and TransUnion say it is time for “buy now, pay later” loans to appear on consumer credit reports. The lenders aren’t ready to sign on.

The first sharp dip in US and European stocks this year prompted global hedge funds to up their borrowing to the highest level seen in five years in the week ending 19 April, according to a report by Reuters.

The report cites a Goldman Sachs note seen by Reuters as highlighting the increase in leverage provided by banks to fund hedge fund investments. While such loans can help managers amplify returns, they can also increase losses.

According to Goldman Sachs’s note, hedge fund gross leverage, or total borrowing, reached 270% after rising 2.6 points from the prior week, while overall net leverage, which measures a fund’s total assets including borrowing against what it actually owns, increased by 0.5 points to 73% last week.

The increase in leverage was seen among stock-picking hedge funds that employ human traders to make investments rather systematic funds that employ computer algorithms, according to Goldman Sachs, with managers buying equities in the US and Europe after three weeks straight of selling.

The S&P 500 fell more than 5% last week from its 28 March closing high, its biggest retreat since October, while the broadest European index of stocks saw its biggest weekly decline since mid-January losing, falling 1.2%.

Global hedge fund industry assets increased for the sixth successive quarter in Q1 2024, hitting a record $4.3tn on the back of strong performance and investor inflows, according to the latest figures from industry data provider HFR.

Total hedge fund assets rose by nearly $190bn over the quarter as investors increased exposure to directional equity hedge, event-driven and uncorrelated macro strategies.

The HFRI Fund Weighted Composite Index advanced 4.5% in Q1 2024, led by directional equity hedge and event-driven strategies, with gains driven by exposure to technology/AI, as well as acceleration in M&A. Larger funds produced higher relative performance, with the HFRI Asset Weighted Composite gaining 5.12% for the quarter. The HFR Cryptocurrency Index returned 47.9% in Q1, bringing the trailing six-month return to 106.9%.

Capital managed by equity hedge (EH) strategies surged by nearly $70bn to begin 2024, rising to a record level of $1.25tn, driven by performance-based gains, as well as estimated net asset inflows of $8.5bn. EH sub-strategy asset increases were led by Fundamental Value funds in Q1, which increased by an estimated $37bn for the quarter, bringing total EH: Fundamental Value capital to an estimated $706.8bn. The HFRI Equity Hedge (Total) Index posted a strong gain 5.2 in Q1 after leading all strategy indices for 2023 with a gain of 11.4%.

Event-driven (ED) strategies, which categorically focus on out of favour, often heavily shorted, deep value equity and credit positions, experienced an estimated asset increase of nearly $49bn in Q1, raising total ED capital to a record $1.21tn, inclusive of estimated net investor inflows of $8bn for the quarter. ED sub-strategy asset increases were once again concentrated in higher beta special situations and shareholder activist strategies, with these increasing by $17bn and $13.4bn respectively in Q1 2024. The HFRI Event-Driven (Total) Index gained 2.5% in Q1 2024 with higher performance from larger managers as the HFRI Event Driven (Asset Weighted) Index advanced 3.9%, led by the HFRI ED: Activist Index, which surged 6.1%.

Uncorrelated macro strategies posted their second-strongest quarterly performance since 2003, with the HFRI Macro (Total) Index surging 6.2% in Q1 2024, trailing only the 6.7% gain in Q1 2022 over the last 20-plus years. Larger macro funds delivered stronger relative performance in Q1, as the HFRI Macro (Total) Index – Asset Weighted jumped 7.15%, led by systematic macro strategies and complemented by fundamental strategies. Total macro capital increased by an estimated $44.8bn in Q1, inclusive of net asset inflows of $1.7bn for the quarter, increasing total macro strategy capital to $715bn. Macro sub-strategy asset increases were led by quantitative, trend-following systematic diversified CTA strategies, which added an estimated $28.1bn in Q1. Macro sub-strategy performance was led by the fundamental HFRI Macro: Systematic Diversified Index, which surged 9.4% in Q1, while the HFRI Trend Following Index jumped 8.1% for the quarter.

Hedge fund capital managed by credit- and interest rate-sensitive fixed income-based relative value arbitrage (RVA) strategies also increased in Q1 as managers positioned for continued inflationary pressures and elevated interest rates, with RVA capital increasing by an estimated $25.8bn in Q1, raising total RV capital to an estimated $1.13tn. Multi-strategy funds led RVA asset increases in Q1 2024, adding an estimated $17.2bn of capital to end the quarter at $692bn. The HFRI Relative Value (Total) Index gained 2.5% in Q1 2024 with sub-strategy performance led by the HFRI RV: Convertible Arbitrage Index, which advanced 4.0%.

Investor capital inflows in Q1 2024 were heavily concentrated in the industry’s largest firms, with firms managing greater than $5bn experiencing an estimated net inflow of $14.4bn. Mid-sized firms managing between $1 and $5bn experienced a smaller inflow of $1.67bn, while firms managing less than $1bn experienced an estimated inflow of $ 0.5bn.

In a press statement, Kenneth J Heinz, President of HFR, said: “Total hedge fund capital accelerated the year end surge in the first quarter to surpass the $4.3tn milestone, as managers focused on unprecedented risks and opportunities dominating allocations into mid-year 2024, with the most significant of these being geopolitical/military conflict, but also including ongoing volatile inflation, interest rates and macroeconomic considerations which have dominated the past two years.

“At the same time, managers are also accessing exciting, volatile, and rich opportunity sets in AI, technology, cryptocurrency and M&A, positioning portfolios to access these.”

Alberto Gallo, CIO of $200m hedge fund Andromeda Capital Management, is betting that the ECB will cut interest rates just once or twice this year by selling European government bonds, according to a report by Bloomberg.

Gallo, who previously made correct calls on inflation and the Federal Reserve’s rate hikes, believes that the market has overestimated the number of interest rate cuts the ECB will make, and says that Europe is unlikely to enter a recession when governments in the region are spending more, US growth remains robust and China continues to stimulate its economy.

Gallo, who left Algebris Investments in 2022 to help set up Andromeda, believes that German bond yields are too low for such an environment, with 10-year rates likely to rise from 2.75% to 3% this year from about 2.5% now, he said. Gallo sees 10-year US Treasury yields rising to 5% and expects no rate cut from the Federal Reserve this year.

The report quotes Gallo in an interview: “It’s hard to see the ECB cutting as much as the market is pricing. The European economy might not be growing as fast as the US, but it’s not collapsing. Buying German bunds at current yield levels won’t give you any protection against inflation.”

Andromeda’s flagship credit long-short strategy, which focuses on relative value across bonds and credit while minimising potential volatility, had a net gain of 8% in 2023.

By Stephen L. Nesbitt – Chief Executive Officer, Chief Investment Officer of Cliffwater.

 

 

Private equity allocations by state pensions produced a 11.0% net-of-fee annualized return over the 23-year period ending June 30, 2023, exceeding by 4.8% the 6.2% annualized return that otherwise would have been earned by investing in public stocks.

By Sam Holt, CFA, and Alex Billias, CFA, - Principal and Chief Operating Officer, respectively, - at the private markets consulting and advisory firm Bella Private Markets.

 

 

Some people may consider donating embryos to researchers in light of Alabama’s I.V.F. ruling and in advance of other state actions. Would it be considered a charitable gift?

The income-driven plan known as SAVE has reduced payments for millions of borrowers. Lawsuits by Republican-led states are seeking to upend it.

The I.R.S. estimates that 940,000 people who didn’t file their returns for that year are due back money. The deadline for filing to get it is May 17.

Over the course of a career, the high fees and a lower-quality menu of investment options found in some plans can shrink your balance significantly.

Have your out-of-network insurance bills skyrocketed? Chris Hamby, an investigative reporter for The Times, may have an explanation.

By Charles Skorina, Managing Partner at Charles A. Skorina & Company.

 

 

 

I worried about so many things during my life, but the really tough hits I never saw coming. — Anonymous

Our 2023 endowment performance report features ten-year investment returns for one hundred thirty-eight US and eight Canadian institutions, the latest available.  In addition, we include one-year returns for 2023, 2022, 2021 along with AUM, as of their respective fiscal year-ends.