Hedge Fund Focus: September 9, 2016
In case you missed them, here are the hot topics in the hedge fund space this week…
Though redemptions may still be on the rise, performance has definitely turned around with August marking the sixth straight month of positive gains for the industry, according to HFR. The index had funds up 0.16 for August, while MSCI World and Barclays had them up 0.1 percent. Gains were led by macro managers, who brought in 0.9 percent in the last week of August alone, as well as specialized strategies.
Despite performance turning around, last year’s ups and downs are still taking their toll on the industry. Family offices are pulling back and moving into private equity, and investor dissatisfaction has reached its lowest point since 2009 with more investors planning to reduce than increase their allocations this year. Furthermore and unsurprisingly, the mounting withdrawals are hitting smaller/emerging managers the hardest, making it even more difficult to launch new firms as compared to a decade ago.
However, all this outflow talk has actually been good for foundations and endowments, who are not retreating from the space, at least not as quickly as pensions are, by providing them with rare opportunities to invest in typically closed funds.
Leon Cooperman’s Omega Advisors is back in the black with yearly returns between 4 and 12 percent and Citadel also trimmed yearly losses by bringing in 2 percent last month. Och-Ziff had similar gains as well, but unfortunately they did not help to stem withdrawal requests as the firm bled another $500M in August in light of its ongoing bribery investigation. The additional withdrawals brought total outflows to $6B.
InvestHedge released its semi-annual fund of hedge funds ranking at the beginning of the week, finding that the industry continued to shrink in the first six months of 2016. Total fund of hedge fund assets fell by 4.73 percent or $31B in the first half of the year
Finally, we may have a new battle brewing in the activist space. It looks like Bill Ackman is gearing up to take on Chipotle and it couldn’t come soon enough as we’ve been without a big activist fight to talk about for some time.