Hedge Fund Focus: July 22, 2016

Ryan FitzGibbon  Follow

In case you missed them, here are the hot topics in the hedge fund space this week…

Poaching was the big news this week and we’re not talking about endangered elephants in Africa, we’re talking about Manny Roman’s decision to leave the helm of Man Group to become Pimco’s new CEO. Pimco’s current CEO Douglas Hodge will move to the role of MD and senior advisor, and Man Group’s President Luke Ellis will succeed Roman.

In the wake of a fraud investing that has rocked Visium, it was revealed this week that Citadel has hired 17 of the firm’s global fund’s managers. Additionally, one of the firm’s PMs pleaded not guilty this week to charges of helping defraud investors by inflating a bond fund’s value and overstating its liquidity.

Though we swear things are getting better – funds posted gains through mid-July, just over 1 percent according to HFR and 0.5 percent according to Lyxor; outflows slowed in Q2 and in July; and the industry brought in $25B in new capital in H1 – the effects of the rough Q1 are still being felt with Preqin reporting it is the worst H1 for the industry since the start of the crisis.

And despite the turnaround, 2016 has still been a difficult year for many of the industry’s big names including Blackstone’s Sefina hedge fund, which is down over 15 percent, and  Bill Ackman, who has suffered $600M in redemptions, as well as Och-Ziff, the Tiger cubs, Passport Capital and Marcato Capital.

The European hedge fund industry is shrinking and not solely because of Brexit. 2016 Q2 marked the sixth straight quarter the industry contracted; the first half of the year was also the worst H1 from a performance perspective for European hedge funds since tracking started in 1999.

Quick Things to Know: According to Nomura, underperforming funds are the ones that are really going to feel fee pressure and the fund of hedge funds industry has shrunk by 11 percent since 2009.

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