Hedge Fund Focus: March 25, 2016

Ryan FitzGibbon  Follow

Not surprising the 12th week of the year did not bring more good news for the industry. Mutual funds are outperforming hedge funds thus far in 2016 with the Hennessee index showing funds down just over 4 percent YTD and Bloomberg labeling them as “having a performance problem,” earthshattering Bloomberg . . .  Additionally, redemptions remained on the rise for the third straight month in March with inflows down 80 percent YTD through the end of February

However, managed futures strategies were on the other side of the coin, they saw a bump in inflows, and long/short and fixed income strategies continued to do well, leading the industry for the month

But the big titans continued to struggle. Ken Griffin’s Citadel is down 8 percent for the year, Lansdowne Partners is down 9.7 percent YTD through mid-March and Brevan Howard saw a $2B drop in assets

You think Mr. Bill Ackman would learn his lesson, but he is taking a play from Amy Winehouse and signing “they tried to make me go to rehab but I said no, no, no.” After having to reassure investors everything was OK at Pershing Square (the firm is down 26 percent YTD and 47 percent from its height last August), Bill, hell-bent on turning his Valeant trade around, decided to double down on the company by taking a seat on its board

Credit focused strategies continued to struggle as it was reported lingering illiquidity issues in the credit markets are pushing strategies like leveraged relative value and long/short credit to the verge of extinction

Fund of hedge funds are doing no better. The industry had the worst start to the year with InvestHedge’s index showing FoHFs down 1.3 percent YTD through the end of February. Additionally, it was reported they lost $12B in AUM in 2015. And the long grind the industry has faced since the financial crisis is taking its toll with many of the big firms having to choose to adapt or become dinosaurs

The activist sector was a buzz this week:

  • Senate Democrats introduced a bill to crack down on activist hedge funds and prevent them from acting together in “wolf packs” to overtake public companies
  • The Argentina saga sauntered on. The latest update being the U.S. Court of Appeals for the Second Circuit in NY deciding to uphold a request from the flailing country by supporting a federal judge’s decision to lift the injunction preventing Argentina from raising new money in the bond markets or paying its creditors
  • And Starboard launched a proxy fight against Yahoo!’s as it looks to remove the company’s entire board

Popular Blog Posts

By Views  -  By Popularity

Blog Archive