Hedge Fund Focus: November 18, 2016

Ryan FitzGibbon  Follow

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

After ending a seven-month high in October, funds are reporting mixed results for November thus far according to HFR, which is being reflected by strategies. October marked the third straight month of losses for CTAs and equity funds have lost $200B to redemptions since the start of the year. However, event-driven funds are experiencing a rebound and EM strategies’ assets have hit a record high.

Despite the mixed results, some managers are doing quite well this year. On the heels of strong gains, former Brevan Howard founder Chris Rokos is opening his fund to new money. The firm will open in February and plans to raise approximately $2B in a month.

Additionally, Starboard is among one of the biggest winners this year, pulling in gains of around 10 percent YTD, and BlueCrest, which closed its doors due to a myriad of issues last year, is having a huge year, up 40 percent YTD. Unfortunately, the same cannot be said for Bill Ackman, who is on track to post double-digit losses for the second year in a row.

Regulation: There were lots of updates in the regulation arena this week. Not a total shocker, but Mary Jo White announced she will officially step down as head of the SEC at the end of President Obama’s tenure. And despite being investigated for insider trading, Omega Advisors said it will still manage money for outside clients and plans to post stronger gains than ever. Finally, ensnarled Och-Ziff has reportedly bled $11.3B in the last 6 months.

Despite the fact that only a few pension funds have completely redeemed from hedge funds, Bloomberg has declared that pensions’ and endowments’ “love affair” with the industry is over. And though only a few have totally sworn off the industry, new research by EY supports Bloomberg’s claims; 1 in 5 investors in North America plan to cut their allocations over the next 3 years and only 1 in 10 plan to increase theirs. Additionally, UBS and Camden have found that high-net-worth individuals’ allocations to the industry have decreased nearly 10 percent.

Weekly Reads: The Financial Times did another in-depth look at how investors are challenging managers on fees, noting that despite management fees falling 10 basis points over the last year from 1.45 percent to 1.35 percent, only 1 in 5 investors are happy with what they are paying. And The New York Times looked at the growing popularity of AI and computers, predicting that the latter will be the next hedge fund star.

Quick Things to Know: The down markets have put a damper on activism and, despite mediocre performance, managers are still on track for big paydays.

Popular Blog Posts

By Views  -  By Popularity

Blog Archive