Hedge Fund Focus: April 1, 2016
In case you missed them, here are the hot topics in the hedge fund/alternatives space this week…
No April Fools here! Things are finally turning around for the industry with HFR reporting funds were up 66 percent for March through mid-month. However, those in the know still expect managers to be in the red about 2.5 percent for the quarter.
Unfortunately, the good news did not come soon enough to stem the tide. The Journal reported investors redeemed more money from managers than they invested in the last quarter of 2014, withdrawing another $15.3B in the first two months of this year. Additionally, the industry experienced AUM loses of $20B alone in February due to a combination of poor performance and withdrawals.
Interestingly though, results from two separate surveys this week, including one by State Street, found that hedge fund investor confidence is on the rise. Wonder who they are talking to…
Big managers continued to get hammered. Och-Ziff’s performance, though only slightly down, is greatly hurting the publicly traded firm – its stock is in free fall, down 36 percent YTD and 70 percent since its high watermark last May. Additionally, Leon Cooperman’s Omega Advisors’ AUM declined by nearly 30 percent last year, a loss of $2.8B, 70 percent of which was due to redemptions.
But, it wasn’t bad news for everyone. Event-driven funds pulled ahead and are leading the pack; CTAs, who had been having a great year but stumbled in the first half of March, recovered in the last two weeks; currency strategies also are in the black; and Third Point and Jana Partners reported gains for the month.
The activist arena was again hot this week: Argentina’s senate approved a plan to end the 15-year hedge fund battle; Avon reached a deal with activists to avoid a proxy fight; Icahn won a partial victory against AIG, changing how the firm’s CEO’s long-term success is measured; but Yahoo! was not so lucky; it is considering a sale in order to appease activists; and a bill in Congress that would hamper activist campaigns continued to gain momentum.