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Rokos and Bridgewater back Nvidia in Q4

Hedgeweek Features - Thu, 02/15/2024 - 09:30

Rokos Capital Management and Bridgewater Associates were among several big hedge funds to up their holdings in shares on Nvidia at the end of last year, positioning themselves to benefit from the stock’s almost 50% gain so far in 2024, according to a report by Reuters.

The report cites securities filings as revealing that at the end of December, Rokos bought more than 254,000 shares worth $126m in the chipmaker, which has benefitted from a surge in investor interest in AI-related stocks.

Meanwhile, Bridgewater, the hedge fund founded by Ray Dalio, increased its stake in Nvidia by 458% to more than 268,000 shares, with the firm’s positions being worth $133m at the end of December.

Arrowstreet Capital also upped its Nvidia holding, with the acquisition of an additional 3.9m shares, taking its position to $2.1bn.

Other funds sold or reduced their Nvidia stakes, with Greg Poole’s Echo Street Capital Management divesting its entire holding of 355,000 shares, D1 Capital Partners closing out its position with the sale of nearly 147,000 shares and Discovery Capital Management selling about 119,000 shares, which had accounted for 9.2% of its portfolio.

British hedge fund trader to admit to Danish tax fraud charges

Hedgeweek Features - Thu, 02/15/2024 - 09:30

British hedge fund trader Anthony Mark Peterson will admit to his part in a scheme that defrauded the Danish tax authorities of more than DKK9bn ($1.2bn) when his case is heard in court later this month, according to a report by Reuters.

The report quotes Patterson’s lawyer, Henrik Stagetorn as saying: “There will be a court hearing in February where he plans to confess.”

Patterson, who had initially denied any wrongdoing, has been charged with participating in an attempted fraud over an additional DKK500m.

The case stems from a Danish investigation into so-called “cum-ex” trading by London-based hedge fund Solo Capital Partners with the firm’s Founder and the main suspect in the case, Briton Sanjay Shah, currently in detention in Denmark, having been extradited from Dubai in December. Shah denies the charges against him.

Another Briton, Guenther Klar, was jailed for six years by a Danish court for defrauding tax authorities of more than DKK320m crowns as part of the same scheme, but has also denied wrongdoing and is appealing against his verdict.

Element downsizing to run mainly internal cash

Hedgeweek Features - Thu, 02/15/2024 - 08:00

Following a year of record losses, Element Capital Management, the global macro hedge fund firm founded by Jeffrey Talpins is planning to downsize its operation in terms of external investments and run mainly in-house capital, according to a report by Bloomberg.

The report cites a unnamed person with knowledge of the matter as revealing that the firm the New York-based firm informed clients on Wednesday that it intends to return an undisclosed sum to investors and focus on generating higher returns while managing fewer assets.

According to Bloomberg’s source, the firm is also planning to reduce the firm’s roster of external investors as part of the plan for internal cash to account for the majority of its assets.

Element, which has been closed to new money since 2018, lost about 10% last year on the back of losses in the previous two years and has seen assets sink to about $8.5bn from a peak of $18bn. The fund reportedly gained 5.3% in January.

Rampant wire fraud and the role (or lack thereof) of the SEC to help RIAs and fund managers

Hedgeweek Features - Thu, 02/15/2024 - 07:49

PARTNER CONTENT

By Michael Brice
President, BW Cyber, LLC 

 

 

Almost two years ago the Securities and Exchange Commission (SEC) announced its plans for enhanced cybersecurity regulation of registered investment advisers (RIAs) and funds. Since that time the SEC has released similar rules for publicly traded companies (I’ve already written about this here). When the new cyber rules for RIAs and funds become final, I suspect the SEC will be quite swift in making public examples of managers who fall victim to cybercrime. In a worst-case scenario, I fully expect we’ll see a classic double-whammy in which ‘the beatings will continue until morale improves’.

If regulations are the ‘stick’, we need some ‘carrots’ from our regulators. I’d like to see some parity with the newly emerging cyber regulations which also provide critically needed support to help victims recover from a cyber-attack. 

I’m not talking about the creation or expansion of a cyber government organization – we already have CISA (Cybersecurity & Infrastructure Security Agency). I’m referring to the predominant cyber financial threat affecting RIAs, private equity firms and PE portfolio companies nationwide: wire fraud. 

Wire fraud is far more widespread than most people realize. Why? because it’s a big fat red flag to your investors.  Ergo – nobody talks about it publicly. So let me explain briefly what a wire fraud looks like and what you can expect:

  • You find out you were tricked into sending a wire (usually in the hundreds of thousands of dollars but often in the millions of dollars). The realization is sickening.  
  • You don’t know who to call or what to do, but most people start with their bank. Good luck.
  • You may be lucky and have a bank fraud unit that helps you to get your money back; or you might not. There’s no legal requirement for them to help you because, guess what – it wasn’t their fault.
  • So maybe you call the Sherriff, or Secret Service, or Treasury, or the FBI. (Spoiler alert, the proper step to take once you realize you are a victim of wire fraud – after you notify your bank – is to submit a fraud report to the FBI via the http://www.ic3.gov/ website). 
  • Now guess what – nobody updates you on the status of your loss. Nobody. This goes on for months. You just hope that the bank is doing what they can and that your IC3 report is being investigated by the FBI. 
  • Now for the kicker – there’s no single government agency federally funded or mandated to report to Congress with the primary goal to defend and protect Americans against wire fraud. 
  • As best I can tell, the FBI does what they do because they care – not because Congress has made it a regulatory requirement. And you know who else cares – Treasury, the Secret Service, and your local Sherriff. And yes, I suspect even your bank…
  • But without an agency with a federally funded legal mandate, and a stated mission to be the ultimate agency to oversee and respond to wire fraud, answer your calls, provide a wire fraud ticket, ensure your bank is actively working to get your money back, keep you updated on your case, and to ultimately take responsibility for reporting to Congress, you’re left hoping that somebody at the bank or at the FBI or somewhere else will elevate your case above the other 3.2 million (and growing) cyber fraud cases totaling over $27.6B in losses that have been reported to the FBI since 2018.

So how does this end if you are the victim of a wire fraud? Sadly, unless you identify the fraud quickly (generally within three business days), the odds of getting all your money back are not in your favor. And if you’re an RIA or fund, based on the new regulations, it’s possibly going to result in an SEC regulatory enforcement action against you and your organization:  A big fat red flag event. 

While the proposed 2024 SEC cyber regulations are long overdue when compared to the rules put out by FINRA and the NFA years ago, we also desperately need Congress to provide a single federal organization with a legal mandate to ‘own’ wire fraud and to help businesses and citizens deal with the aftermath. 

 

 

Michael Brice, Founder, BW Cyber, LLC – Michael is the Founder and President of BW Cyber, LLC, a veteran owned/veteran friendly cybersecurity consulting firm that provides SEC cyber compliance and related cybersecurity technology solutions to the wealth and asset manager verticals. In addition to his military experience as a US Marine Corps officer, Michael has over 35 years experience providing technology, security, and related cybersecurity consulting solutions in the financial services industry. Michael is also the Executive Liaison between BW Cyber, LLC and the FBI for all forensic investigations related to wire fraud investigated by his firm. In this role, he often collaborates with the FBI to provide community outreach to help wealth and asset managers better understand the nature of cybersecurity and the devastating impacts that criminals around the world are causing with their ongoing wire fraud attacks. Michael is a graduate of Clemson university where he obtained a BS in Computer Information Systems. 

Hedge funds abandon oil rally after BP refinery failure 

Hedgeweek Features - Thu, 02/15/2024 - 04:36

An electricity failure and subsequent shutdown of a BP refinery in the US sparked an oil sell-off as hedge funds and other money managers sold the equivalent of 86m barrels in the six most important petroleum-related futures and options contracts over the past week, according to a report by Reuters.

The refinery in Whiting, Indiana — the largest in the US Midwest and BP’s largest globally — first opened in 1889 as part of John D Rockefeller’s Standard Oil Company and now produces 7% of all asphalt in the US, according to the oil company’s website, processing over 400,000 barrels daily. Its unexpected shutdown — which is expected to last up to three weeks, according to another report from Reuters — was caused by site-wide electricity failure at the start of the month.

As a result, surplus crude is likely to accumulate across the region — particularly around the NYMEX delivery point in Cushing, Oklahoma — according to the report. This contrasts with investors’ bullish bets since mid-January on depleting inventories in Cushing and a subsequent squeeze on deliverable supplies. Now, production shutdown has delayed further depletion and sent prices sliding.

The report notes that this is the third time since mid-2023 that fund managers have tried to build a bullish position, only to be forced to retreat as inventories remained above average. Now, bullish long positions outnumber bearish shorts by a ratio of 2.24:1 from 1.02:1 eight weeks earlier.

The report also attributes heavy sales of NYMEX, ICE WTI (-62m barrels, at the fastest rate since last October) and Brent (-23m) to fund managers expecting a significant increase in the amount of crude available. The combined position in WTI fell to a three-week low of 55m barrels, down from 117m barrels the previous week.

Despite the sell-off of US diesel (-7m) and gasoline (-11m), fund managers bought up European gas oil to the tune of 17m barrels, reflecting beliefs that Europe’s industrial recession is coming to an end, as are trade disruptions brought on by the Red Sea crisis.

Meanwhile, the net long position in gasoil futures and options increased to 50m barrels from 1m on 12 December 2023. Despite the disruption of fuel production brought on by the Whiting refinery, investors eschewed US gasoline and diesel futures in favour of realising profits on previous bullish long positions, after a period of bullish bets on the outlook for US fuels.

Elsewhere, hedge funds and other money managers sold the equivalent of 401bn cu ft in two major futures and options contracts linked to the price of gas at Henry Hub, a distribution hub on the natural gas pipeline system in Erath, Louisiana.

Tesla continues reign as top shorted security in January

Hedgeweek Features - Thu, 02/15/2024 - 04:31

On the heels of topping the Americas large-cap list for most shorted stock of 2023, Tesla was the most crowded security in January, with a score of 99, according to the latest Shortside Crowdedness Report from Hazeltree.

The report is a monthly listing of the top 10 shorted securities in the Americas, EMEA, and APAC regions in the large-, mid-, and small-cap ranges.

In a statement, Tim Smith, Managing Director of Data Insights at Hazeltree, said: “2024 has started the way 2023 ended, with similar concentration of interest in many of the same securities and sectors, with the exception of the APAC region where there appears to be more movement among the top shorted securities.”

Energy companies Chevron (94) and Exxon Mobil (84) closely followed Tesla in the Americas large-cap rankings, alongside Apple (84) and Charter Communications (84). Albemarle Corporation had the highest institutional supply utilisation (23.59%)

In the mid-cap category, semiconductor developer Wolfspeed was the most crowded security (99), while Bloom Energy Corp had the highest institutional supply utilisation (69.14%).

In the small-cap category, solar energy company Sunnova Energy remained the most crowded security (99), while battery manufacturing company Enovix displayed the highest institutional supply utilisation (86.52%).

In the EMEA large-cap category, luxury goods conglomerate LVMH was the most crowded security for the fifth consecutive month (99), and Universal Music Group had the highest institutional supply utilisation (5.99%), while in the mid-cap category, French rail manufacturer Alstom was the most crowded security (99) and had the highest institutional supply utilisation (80.75%).

Irish video game company Keywords Studio (99) was the most crowded security in the EMEA small-cap category for the second consecutive month, while health & fitness club Basic Fit had the highest institutional supply utilisation (77.56%).

In the APAC large-cap category, Takeda Pharmaceutical was the most crowded security (99), with Aeon leading in institutional supply utilisation (21.22%), while computer manufacturing company Daifuku was the most crowded security (99) in the mid-cap category and IHI stood out with the highest institutional supply utilisation (33.46%).
In the APAC small-cap category, Webjet was the most crowded security (99), while Takara Holdings had the highest institutional supply utilisation (26.31%).

The data contained in the report comes from Hazeltree’s proprietary securities finance platform data, which tracks approximately 15,000 global equities across the Americas, EMEA, and APAC. The data is aggregated and anonymised from the contributing Hazeltree community, which includes approximately 700 asset manager funds.

Genesis rolls out web version of Trade Allocation Manager 

Hedgeweek Features - Thu, 02/15/2024 - 04:00

Genesis Global, a software provider geared towards financial markets organisations, has launched a web version of its multi-asset class middle-office solution, Trade Allocation Manager (TAM).  

According to a press release, the web version of TAM is a scalable, cloud-native solution that integrates with other web services, reduces deployment costs and improves updates and maintenance cycles. TAM, which was introduced in 2018 and is built on the Genesis Application Development Platform, acts as a centralised application that automates trade matching, allocation, confirmation and other middle-office processes for equities and fixed-income products. The solution can be hosted, deployed on premises or via cloud.

In a statement, Niketta Postlethwaite-Williams, Senior Product Manager at Genesis Global, said: “The steady stream of innovation in the Genesis platform delivers an expanding array of functional and business componentry, AI-driven services and UI tools from which we draw to make TAM a modern and adaptable middle-office solution. With the web version, clients benefit immediately from the capabilities we add to TAM.”

She added: “Bringing all asset classes, markets and regions into a centralized middle-office solution is one of the most important things a firm can do to improve operational efficiency and enhance its compliance posture.
“Having a single, unified middle office also positions financial firms to benchmark their post trade processes. TAM provides extensive metrics for performance analytics.”

Brazilian hedge fund Verde looks to smaller Chinese companies amid stock rout 

Hedgeweek Features - Wed, 02/14/2024 - 10:00

Luis Stuhlberger, the CEO and CIO of Verde Asset Management, a Sao Paolo-based hedge fund managing BRL24bn ($4.8bn) and one of the country’s largest independent asset managers, is looking to China’s smaller companies after the selloff in China’s equity market at the start of 2024, according to a report by Bloomberg citing an investor note. 

The note reveals that Stuhlberger’s flagship fund built a long position — via options — on an unnamed Chinese small-cap index. Both wager size and the index name were not disclosed.

In the note, the hedge fund described the move as a “small, opportunistic position” in light of Chinese stocks having a “horrendous” January and helping to send other assets lower, including Brazil’s benchmark Ibovespa index.

Since its founding in 1997, Verde’s flagship fund is up over 24,300% in terms of local currency after fees, and has seen almost double the annual return of the Ibovespa index. Last month, however, the fund fell 0.28% after fees, underperforming the 0.97% gain for the CDI rate — the benchmark for local hedge funds.

Chinese small-caps have struggled in 2024 due to growing concerns about the country’s economy and despite their popularity with Chinese retail and institutional investors last year. The CSI 1000 Index fell 15% this year and has underperformed blue-chip benchmarks, reflecting investors’ bets that measures to revive the market will prioritise larger firms. According to the report, structured derivatives and quantitative funds are seen to have amplified the recent selloff.

Like Stuhlberger, more investors are using options to capture potential upside in Chinese shares, according to the report. This shift can be seen in exchange-traded products, which track Chinese stocks and have just recorded a spike in option volume as traders prepare for a bounce in battered shares. Bank of America and EPFR data cited in the report also revealed that Chinese stocks just recorded their biggest weekly inflow on record, partly driven by state-backed investors.

EU carbon permits set for further falls, says hedge fund boss

Hedgeweek Features - Wed, 02/14/2024 - 09:36

Soaring energy supplies coupled with subdued demand means that a further slump in EU carbon permits is on the cards, according to a report by Bloomberg citing veteran hedge fund manager Per Lekander, CEO of Clean Energy Transition.

The report quotes Lekander as saying in a telephone interview that the price of carbon permits is “going way lower”.

“The fundamental demand of carbon in the near term is going to be extremely weak,” he said.

Prices have already dropped by 30% so far this year with increases in supplies of renewable power, falling gas prices and a recovery in nuclear and hydro plants combining to curb pollution — a key driver of demand for emission permits in Europe.

European industrial companies purchase carbon permits to account for each ton of emissions they release into the atmosphere. An acceleration in the development of solar energy plants — sparked by Europe’s recent energy crisis — has seen prices plummet from previously soaring levels.

Combined with an increase in the supply of permits available at auction, Lekander is predicting carbon could slump as low as €35. On Wednesday, benchmark carbon futures for December fell to €55.41 a ton, the lowest level seen since March 2022.

Goldman Sachs achieves over 99% same day affirmation rate with DTCC’s CTM Match

Hedgeweek Features - Wed, 02/14/2024 - 09:34

Goldman Sachs & Co has achieved a greater than 99% same day affirmation rate and a significant improvement in settlement rates for transactions leveraging the Depository Trust & Clearing Corporation’s CTM’s Match to Instruct (M2i) workflow in Q4 2023.

In addition, Goldman Sachs was able to achieve a 38% reduction in same-day affirmation exceptions and a 64% reduction in US settlement fails by value, when matching and affirming trades with investment manager counterparties who also use CTM’s M2i.

CTM’s M2i workflow aims to significantly increase same day affirmation (SDA) rates on DTC-eligible securities when a trade match occurs between an investment manager and executing broker. DTCC says that clients utilising CTM’s M2i workflow benefit from central matching and auto-affirmation capabilities that are typically more efficient than local matching and affirmation by custodians.

Today, most CTM investment managers leveraging M2i to match and affirm their US trades achieve a near 100% affirmation rate by 9:00pm ET on trade date, achieving the level of straight through processing necessary to meet their counterparties’ T+1 SDA requirements and cut-off times.

As the financial services industry prepares for the upcoming US move to T+1 settlement on 28 May, 2024, firms are looking closely at their post-trade processes to increase automation and to remove inefficiency. Goldman Sachs & Co, a self-clearing broker dealer, implemented CTM’s M2i workflow in Q4 2022 as part of their broader strategy to improve settlement efficiency and create a streamlined post trade experience for clients. They performed an impact analysis across the investment managers leveraging the M2i workflow and observed an increase in same-day affirmations.

CTM, part of DTCC’s ITP suite of products, is a central matching service for cross-border and domestic transactions across multiple asset classes that has become a global best practice.

Employers Can Now Enroll Workers in Some Emergency Savings Accounts

The New York Times Your Money - Fri, 02/09/2024 - 09:00
But many companies are spurning the “clunky” legal requirements for accounts linked to retirement plans. Instead, some have stand-alone rainy day offerings.
Categories: The New York Times

Coatue MD to start new hedge fund 

Hedgeweek Features - Thu, 02/08/2024 - 04:42

Aaron Weiner, a Managing Director at Coatue Management, the $40bn hedge fund founded by Philippe Laffont, will leave the firm at the end of the year to start his own hedge fund, according to a report by Bloomberg citing people with knowledge of the matter. 

Coatue has already notified its investors of Weiner’s pending departure.

Weiner is still based at the firm’s New York office, where he leads healthcare and tactical solutions and has worked on investments in companies including Reify Health, Infinitus Systems, Cadence Solutions, DNA Script and Entos.

Prior to joining Coatue in 2021, Weiner worked at Blackstone and The Goldman Sachs Group.

Ackman looking to widen investor base with new ‘cut-price’ fund

Hedgeweek Features - Thu, 02/08/2024 - 04:33

Pershing Square Founder Bill Ackman is set to launch a new US investment portfolio that will offer retail investors access to an investment strategy that mimics his existing hedge fund but with lower fees and faster access to capital, according to a report by Reuters.

The report cites a regulatory filing as revealing that Pershing Square USA will be listed on the New York Stock Exchange and available to anyone who can invest in the US, including pension funds, endowments and retail investors who are normally excluded from hedge funds.

There will be no minimum investment for the new fund, which will charge a flat fee of 2% every year after the first year, far lower than the 15% to 30% performance fees charged by many hedge funds.

Ackman could potentially tap his 1.2m followers on social media platform X for capital for the fund which will also allow investors to withdraw their cash more quickly than typical hedge funds. Easier access to capital is likely to appeal to state pension funds and other institutions as well as retail investors.

The new, which will be structured as a closed-end fund that raises money through an initial public offering, with its shares then trading on the exchange, will be managed by Ackman, Ryan Israel, the firm’s CIO, and other members of the Pershing Square investment team.

LiquidityBook appoints trading technology veteran as President

Hedgeweek Features - Wed, 02/07/2024 - 10:04

LiquidityBook, a provider of cloud-native buy- and sell-side trading solutions to hedge funds and other sophisticated clients, has appointed trading technology industry veteran Jason Morris as its new President.

Morris previously spent nearly eight years at Enfusion, where he served as the Global Head of Corporate Development, and before that, as President, with responsibility for overseeing the company’s sales, marketing, product, operations, finance and HR departments.

More recently, Morris served as Head of Operations & Payments at PlateIQ (now Ottimate), where he helped grow payments revenue.

Under Morris’ leadership, LiquidityBook plans to expand its reach into new markets and deepen relationships with key partners, while continuing to enhance its product offerings across all areas of its portfolio, order and execution management system and embedded FIX network.

SEC faces challenge in implementing fee disclosure regulation 

Hedgeweek Features - Wed, 02/07/2024 - 09:30

The US Securities and Exchange Commission (SEC) is facing a legal challenge to its latest set of rules, which require hedge funds and private equity firms to detail quarterly fees and expenses to investors, according to a report by Bloomberg.

A lawsuit was filed a week after the rules’ adoption by industry groups, who are represented by former Secretary of Labor Eugene Scalia and include the American Investment Council, which argued that the rules would “fundamentally change the way private funds are regulated in America”.

The SEC’s response in court filings invoked the 2010 Dodd-Frank Act, which was enacted to restructure the financial regulatory system in the wake of the financial crisis, and described the rules as “a flexible and measured approach to resolve problems affecting investors and their stakeholders”.

Another set of rules adopted by the regulator — which is currently chaired by former Goldman Sachs veteran Gary Gensler — last August prohibits firms from allowing certain investors to cash out more easily than others.

The report described Gensler’s tenure as being characterised by a tightened grip on private funds and a desire for greater transparency in an industry known for opaque and complex layers of fees.

The court has not yet ruled on the case — in full, National Association of Fund Managers v. Securities and Exchange Commission, 23-60471, US Fifth Circuit Court of Appeals (New Orleans) — nor has the date been indicated.

This follows the SEC’s recent postponement of another set of rules which would introduce a requirement for hedge funds and proprietary trading firms to register as dealers.

LMAX Exchange partners with 4OTC

Hedgeweek Features - Wed, 02/07/2024 - 09:25

LMAX Exchange, an institutional exchange for global FX, has connected with the Libre Liquidity Bridge (Libre) service from 4OTC, a provider of low latency connectivity services for digital assets and FX.

Libre will enable liquidity providers to stream FX liquidity on LMAX Exchange venues with ultra-low latency.

The service will also provide connectivity to LMAX Exchange execution venues globally, including London (LD4), New York (NY4), Singapore (SG1) and Tokyo (TY3). This enables the company to streamline connectivity management, attract more liquidity onto the exchange, and minimise the time taken to onboard new liquidity providers.

Blackwells reaffirms backing of Disney CEO Iger

Hedgeweek Features - Wed, 02/07/2024 - 09:22

Activist investor Blackwells Capital (Blackwells), a shareholder of The Walt Disney Company (Disney), has reaffirmed its support for the entertainment giant’s current CEO Bob Iger in a proxy statement filed with the US Securities and Exchange Commission (SEC).

In connection with its nomination of Jessica Schell, Craig Hatkoff and Leah Solivan for election to Disney’s board of directors at the company’s annual shareholder meeting, Blackwells has also released an open letter to “fellow shareholders”.

In a press statement, Jason Aintabi, Chief Investment Officer of Blackwells, endorsed his firm’s candidates while questioning the suitability of a rival slate of nominees from Trian Asset Management.

“Jessica Schell, Craig Hatkoff and Leah Solivan bring invaluable expertise and experience to Disney’s board as it faces the challenges and opportunities of a generational transformation,” he said. “Voting for Blackwells’ nominees will ensure the Board has the support it requires across critical areas: media and content, real estate and asset optimisation.”

Aintabi went on to describe the Trian nominees, including the firm’s Founder Nelson Peltz, as “uninspiring”.

In the open letter, Blackwell’s wrote: “If elected, our three nominees for the board have pledged to continue to support Disney’s transformation efforts under the leadership of the current board and CEO, Robert A Iger. In addition to an approach of constructive collaboration, our three nominees will bring unique skills, expertise and perspectives to the board that draw on a range of experiences that the future of Disney depends on.”

Years of poor returns see investors dump equity long-short hedge funds

Hedgeweek Features - Wed, 02/07/2024 - 09:15

Equity long-short hedge funds have seen nearly $150bn in client withdrawals over the past five years as investors have lost faith in their ability to capitalise on bull markets and protect cash during market downturns, according to a report by the Financial Times.

The report cites data from Nasdaq eVestment as showing that the strategy, one of the oldest and best known in the industry, has underperformed the US stock market in nine out of the past 10 years.

Designed to ‘hedge’ against overall market fluctuations through a combination of bets on both winning and losing stocks, past star stockpickers in the long-short space include some of the biggest names in the business including Tiger Management’s Julian Robertson, GLG’s Pierre Lagrange and Egerton’s John Armitage.

More recently though, big names including Chase Coleman at once-high flying Tiger Global and Lee Ainslie at Maverick Capital, have struggled while cheap index tracker funds have reaped huge gains from the bull market.

Despite a sharp rise in interest rates over the past two years long-short funds have continued to struggle gaining just 6.1 per cent on average last year, compared with the S&P 500’s 26.3 per cent gain.

Managers tip increase in PE and hedge fund inflows in 2024

Hedgeweek Features - Wed, 02/07/2024 - 09:05

Alternative asset, equity and fixed income fund managers have identified private equity, renewable energy and hedge funds as the alternative asset classes most likely to increased inflows in 2024, according to new research by fund management solutions specialist Carne Group.

Private equity was the top choice of asset managers when asked to identify alternative asset classes expected to see the biggest increase in fundraising this year. Just under a third (28%) of fund managers expected PE’s increase to be ‘dramatic’ when compared to 2023, while 50% anticipated a slight rise. Renewable energy meanwhile polled 30% and 31%, followed by hedge funds (27% and 29%).

Almost three-quarters (73%) of 200 fund managers surveyed across the UK, Germany, Switzerland, Italy, France, the Netherlands, Norway, Finland and Denmark, and collectively managing $1.577tn, expect the number of new funds launching within their own sector in 2024 to be higher than the previous year.

Despite waves of market volatility, 14% of fund managers pinpointed a dramatic increase in the number of fund launches this year. Similarly, two-thirds (62%) of fund managers anticipate the number of segregated accounts launched in 2024 to be higher than the previous year, with 14% expecting the total number to be significantly higher.

The majority (83%) of those surveyed also expect an increase in the flow of new capital into their funds and segregated accounts this year, with 8% eyeing significant growth.

John Donohoe, CEO at Carne Group, said: “Alternative asset classes have benefited greatly from recent stock market volatility, which has resulted in a desire for investors to diversify their portfolios more.

“Respondents noted that fund managers face a complex regulatory environment with an increasing focus on corporate governance, issues around reporting, fees and expenses as well as operational costs. This means they need to place an even greater focus on improving their levels of efficiency, whilst maintaining the highest levels of transparency and reporting for investors.”

Finally, just under a quarter (23%) of fund managers anticipated a dramatic increase in the use of third-party providers between 2024 and 2026, while 56% expected a slight rise. This shift to incorporating external expertise is attributed to the ability to launch different product sets, speed to market, and the assurance of stronger fiduciary management of the fund.

Donohoe added: “Our survey shows that the expertise of the investment team is the key selling point for asset managers. As complexity and cost pressures mount, managers will focus their efforts on investment management and distribution, and work with third-party providers to enable them to remain lean, agile and competitive.”

Activist hedge fund Vision One pushing for Kohl’s sale

Hedgeweek Features - Wed, 02/07/2024 - 09:00

Vision One Management Partners, an activist hedge fund firm co-founded by former Canadian Prime Minister Stephen Harper and Carl Icahn protégé Courtney Mather, wants US department store operator Kohl’s to put itself up for sale, according to a report by Reuters.

The report cites unnamed people familiar with the matter as revealing that Vision One has expressed its concerns about the company’s future to management, having built a stake in the business.

As well as asking Kohl’s to launch a sale process, the hedge fund also wants board representation, according to Reuters’s sources.

Shares of Kohl’s, which operates more than 1,100 stores across the US and also has a retail partnership with LVMH’s beauty products retailer Sephora, ended trading on Tuesday in New York up 4.9% at $26.80 on the news, giving the company a market value of $3bn.

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