Hedge Fund Focus: April 29, 2016
In case you missed them, here are the hot topics in the hedge fund/alternatives space this week…
On the heels of last week’s news that the industry lost $15B in outflows last quarter, JPMorgan warned that redemptions may rise to as high as $25B when all is said and done. However, eVestment, which confirmed HFR’s findings, clarified that outflows in Q1 were actually significantly less compared to the end of 2015 and State Street thinks the whole situation may just be a blip.
And State Street may be right. Following March’s rebound, funds experienced another good week and are up 0.3 percent for April. Additionally, it appears the hard times are not being equally shared:
- Commodity funds are popular once again, experiencing the largest inflows of any strategy in Q1 this year
- Event-driven funds are leading the rebound
- And merger arbitrage strategies are back in favor
Dan Loeb and Ken Griffin’s Citadel both took interesting positions this week. Loeb warned that the industry may be in the first inning of a major washout and certain strategies may go by the wayside. And Citadel decided it’s a whistleblower, reporting wrongdoing by Chicago-based firm 3Red Trading LLC to the S. Commodity Futures Trading Commission.
There were also a lot of reports this week about how, despite the difficult environment, hedge fund launches are on the rise and the quality of such launches are high. Furthermore, public pensions are still interested in the industry with Canada’s largest pension scheme defending hedge funds.
But bad news continued for some. Breven Howard was hit with another round of $1.4B redemption requests due to poor performance and longtime fund of hedge funds Aurora Investment Management is closing its doors after a deal to take over the firm collapsed last week.
Finally, Valeant appointed Joseph Papa as the new Chairman and CEO to the delight of many hedge fund investors. However, the decision is hurting Paulson because the new hire was stolen from one of his other top investments, Meanwhile, the company’s continued issues are dragging down Bill Ackman’s performance.