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☆ Hedge funds post mediocre first-half performance with some big names only up single digits
▼ + stars: | 2024-07-09 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

So far this year, hedge fund managers have failed to beat the S & P 500 , one of the cheapest, easily available investment vehicles for ordinary investors. Hedge funds returned just 5% in the first half of the year after a 0.2% loss in June, with event-driven strategies the biggest laggards, according to data firm HFR. The performance may come as a disappointment as hedge funds often tout star stock pickers and niche strategies to justify their high fees. Hedge funds typically charge a 2% management fee on the total assets under management plus a performance fee of 20% of the fund's profits. Goldman Sachs' prime brokerage data showed hedge funds have been rotating out of tech stocks, especially winning chipmakers over the past few weeks, while pouring into financial stocks and commodities.

Persons: Hedge, Morgan Stanley's, Bill Meany, Morgan Stanley, Goldman Sachs, Ken Griffin's, Bill Ackman's Pershing, Dan Loeb's, Cliff Asness, AQR Organizations: Citadel, Apex, Equity Locations: Wellington

☆ Peltz's Trian up 3% this year even as Disney bet soured
▼ + stars: | 2023-10-10 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +1 min

NEW YORK, Oct 10 (Reuters) - Nelson Peltz's Trian Fund Management returned nearly 3% in the first nine months of the year, investors said on Tuesday, as his bet on Walt Disney Co (DIS.N) contributed to the activist hedge fund lagging its peers' returns. Disney's stock price has tumbled roughly 30% since February, when Peltz ended a battle for a board seat but kept Trian invested in the stock. Some blue-chip activist investors, including Bill Ackman's Pershing Square Capital Management and Jeff Smith's Starboard Value, are posting better numbers. The average activist investor gained nearly 7% through the end of September, according to Hedge Fund Research data. At the end of June, the average activist investor was up 11.5% while Trian was up roughly 6%, HFR data and investors said.

Persons: Nelson, Peltz, Trian, Janus Henderson, Trian's, Bill Ackman's, Jeff Smith's, Svea Herbst, Bayliss, Nick Zieminski Organizations: Fund Management, Walt Disney Co, Disney, Reuters, Janus Henderson Group, Ferguson, Bill Ackman's Pershing, Capital Management, Pershing, Fund Research, Svea, Thomson Locations: Boston

REUTERS/Ann Wang Acquire Licensing RightsLONDON/NEW YORK, Aug 28 (Reuters) - Hedge funds hold record exposure to the seven biggest tech stocks by market capitalization, according to data released on Friday by Goldman Sachs, in a week Nvidia (NVDA.O) hit an all-time high after beating revenue expectations. The largest seven U.S. stocks collectively now make up about 20% of the total net market value held by hedge funds tracked by Goldman Sachs. Last week, Nvidia reported record quarterly revenue fueled by strong demand for its artificial intelligence (AI)-focused chips and said the AI boom has legs. Hedge funds will be forced into capturing these returns regardless of analysis," said Jim Neumann, chief investment officer of Sussex Partners. Goldman Sachs, which runs one of Wall Street's largest prime brokerages, is able to track trends in flows.

Persons: Ann Wang, Goldman Sachs, Jim Neumann, Bruno Schneller, Schneller, Daniel Loeb, Nell Mackenzie, Sharon Singleton, Paul Simao Organizations: REUTERS, Nvidia, Microsoft, Apple, Tesla, Nasdaq, Reuters, Sussex Partners, INVICO Asset Management, Thomson Locations: Taipei, Taiwan, Wall, Carolina

A continued rally in stocks forced many hedge funds to unwind their bets against equities last month. US BOND MARKET LIQUIDITYBridgewater actively bets on the direction of various types of securities — including stocks, bonds, commodities and currencies — by predicting macroeconomic trends. He said that liquidity in the U.S. government bond market was getting worse, as the Treasury increases bond issuance. Bridgewater's Pure Alpha 12% volatility fund gained 2.5% in the year through Aug. 11, a third source familiar with the matter said, while the Defensive Alpha fund, less dependent on equities, rose 2.1%. Since it was launched in 1991, Pure Alpha 12% has generated 7.7% net total returns annually, according to the same source.

Persons: Ray Dalio, Greg Jensen, Bridgewater's, Nell Mackenzie, Ira Iosebashvili, Michelle Price, Emelia Organizations: U.S ., Singapore, Bridgewater Associates, Reuters, Nasdaq, Treasury, Alpha, Hedge Fund Research, Thomson Locations: Bridgewater, U.S, London, Carolina, New York

☆ Hedge funds land bonuses despite returns below bank savings rates -Goldman
▼ + stars: | 2023-08-15 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

Savings accounts currently offer interest rates of about 5.5% in the United States, and 3.75% in Europe. About 73% of the investors surveyed were based in the United States, Goldman said in the note sent to clients on Monday. Reuters GraphicsMost investors use an index compiled by Hedge Fund Research (HFR) to determine whether or not their hedge fund has performed well enough to earn a bonus or performance fee. Reuters GraphicsSome agreements between a hedge fund and their investors base fees not on a minimum threshold but on a past high the hedge fund has hit, a so-called high-water mark. Half of the investors surveyed said hedge funds met their expectations this year but only 8% said they had outperformed, the lowest proportion since 2018.

Persons: Dado Ruvic, Goldman Sachs, Goldman, Nell Mackenzie, Elisa Martinuzzi, Dhara Ranasinghe, Alexander Smith Organizations: REUTERS, Savings, Reuters Graphics, Hedge Fund Research, Reuters, Thomson Locations: United States, Europe, Anecdotally

In the two months since hedge funds began bailing on their record net short position in S&P 500 futures their equity returns have accelerated, narrowing the yawning year-to-date underperformance versus the broader market. Against that backdrop, perhaps not, although the weekly momentum on funds' S&P 500 futures positioning is the most bullish since December 2021. Reuters ImageReuters ImageReuters ImageThe latest CFTC figures show that hedge funds' net short position in e-mini S&P 500 futures at the end of July was around 200,000 contracts, the smallest net short since March. Just two months ago, at the end of May, funds were net short to the tune of 434,000 contracts, the largest net short position on record since these contracts were launched in 1997. If equity strategy-based hedge funds are slowly turning their poor 2023 performance around, their macro fund peers continue to struggle.

Persons: Brendan McDermid, Jamie McGeever, Jonathan Oatis Organizations: New York Stock Exchange, REUTERS, HFRI, Futures, Reuters, CFTC, ICE, Thomson Locations: New York City, U.S, ORLANDO, Florida

☆ Hedge fund industry lures $3.6 billion in fresh money in second quarter, HFR says
▼ + stars: | 2023-07-21 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, July 21 (Reuters) - Investors poured $3.6 billion in fresh money into global hedge funds in the second quarter, data provider HFR said on Friday, helping drive the industry's assets up. In the first half of the year, the industry lured $12.64 billion, HFR showed. Equity hedge funds led the inflow in the second quarter of the year, adding $2.8 billion in new money, followed by event-driven funds. The last six years have been challenging for hedge funds, with outflows surpassing inflows for most of the period. Growth was mainly driven by the funds' performance in the second quarter, HFR showed.

Persons: HFR, Growth, Carolina Mandl, Jonathan Oatis, Mike Harrison Organizations: YORK, Equity, Thomson Locations: New York

☆ Global hedge funds shine in June, driven by AI -HFR
▼ + stars: | 2023-07-10 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, July 10 (Reuters) - Global hedge funds posted gains of 2.2% in June, as artificial intelligence-related stocks surged and the banking crisis eased, data provider HFR said on Monday. In the first half of the year, hedge funds added 3.45% to their investors. "Hedge funds surged in June, led by growth equity exposures and, specifically, artificial intelligence. Macro hedge funds ended June down 0.47% in the year, as they were able to erase some losses earlier in the year last month, up 1.47%. Hedge funds that bet on economic trends had a challenging beginning of the year as they were hard hit by the banking crisis in March.

Persons: HFR, Kenneth J, Heinz, Carolina Mandl, Chris Reese, Stephen Coates Organizations: YORK, Global, HFR, Equity, Carolina, Thomson Locations: New York

Commodity Futures Trading Commission (CFTC) data for the week ending April 25 show that speculators increased their net short position in 5-year Treasuries by almost 115,000 contracts to a record 869,288 contracts. Funds also increased their net short position in 10-year bonds for a fourth straight week, by just over 60,000 contracts to 740,261. Reuters ImageReuters ImageAt the same time, funds trimmed their net short position in two-year Treasuries futures by 28,607 contracts, the biggest reduction in a month. They have increased their net short position in the five-year space by more than 200,000 contracts, and by almost 400,000 contracts in the 10-year space. Meanwhile, they have trimmed their two-year bond net short position by a negligible 4,338 contracts.

ORLANDO, Florida, March 22 (Reuters) - First the record wager on higher U.S. interest rates, now the record wipe out. Their record net short position in three-month Secured Overnight Financing Rate (SOFR) futures of 1.17 million contracts was slashed to 329,638 contracts in the week through March 14. chartchartExpectations of a 6% fed funds rate have long faded. In bonds and interest rates, yields and implied rates fall when prices rise, and move up when prices fall. The latest CFTC figures also revealed how the recent surge in volatility has put speculative accounts trading three-month SOFR futures out of the market.

☆ Why Goldman Sachs alumni are being hoovered up by elite hedge funds like Citadel and Millennium
▼ + stars: | 2023-03-21 | by ( Alex Morrell | ) www.businessinsider.com time to read: +14 min

In November, one of the world's most consequential hedge funds announced a shake-up at the top of its power structure. In an internal memo, the founder of Millennium Management, Izzy Englander, said that Bobby Jain would be vacating the co-CIO role. "You can't readily find that managerial experience at other hedge funds and Goldman is a perfect place to look for those people." 8 former Goldman Sachs leaders are now Millennium execsEnglander isn't alone — firms rarely are in the copycat world of multistrats. In a statement to Insider, Abbey Collins, a spokesperson for Goldman Sachs, said, "Goldman Sachs has always been and remains a talent magnet.

☆ Man Group CEO takes home biggest pay package since 2008
▼ + stars: | 2023-03-14 | by ( Nell Mackenzie | ) www.reuters.com time to read: +1 min

Man Group (EMG.L), as a public company traded on London's FTSE 100 index, is a rarity among hedge funds. Large investors such as pension schemes and sovereign wealth funds use hedge funds to guard against broader market volatility. The broader HFRI Composite Index, which tracks the performance of hedge funds, rose by about 12% in 2020, according to data firm Hedge Fund Research (HFR). Over the last three years, Man Group, which uses discretionary and computer led strategies to trade, has taken in $18.7 billion of new client money and made $11.5 billion in investment gains. In 2008, Peter Clarke, the former CEO of the hedge fund, took home $14 million.

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☆ Global hedge funds gain in January, but not as much as stock market, HFR says
▼ + stars: | 2023-02-07 | by ( Carolina Mandl | ) www.reuters.com time to read: +2 min

NEW YORK, Feb 7 (Reuters) - Global hedge funds posted a solid 2.8% gain in January, but they missed out on the stellar rally that broader stock market indexes posted to start the year because the funds were mostly positioned for a continued bear market, data provider HFR said on Tuesday. Last year, hedge funds posted their worst performance since 2018, mainly dragged down by equities as portfolio managers struggled to place bets amid market turmoil. Still, the main Wall Street indexes far outperformed hedge funds. Data from Goldman Sachs' prime brokerage showed that last month hedge funds massively abandoned their bets against stocks as they became too expensive amid a rally. Relative value hedge funds, which trade price disparities, rose 1.95%, while macro hedge funds gained 0.26%, mainly dragged down by algorithm-driven and commodities strategies.

☆ Hedge fund industry lost $125 bln worth of assets in 2022 - HFR
▼ + stars: | 2023-01-20 | by ( Nell Mackenzie | ) www.reuters.com time to read: +1 min

LONDON, Jan 20 (Reuters) - Almost $125 billion worth of assets, from performance losses and asset flows, left the hedge fund industry in 2022, Hedge Fund Research (HFR) data showed on Friday in the latest sign of the havoc that volatility wreaked on the industry last year. Investors rethought putting their money into hedge funds, leading to a net outflow of $55 billion in assets, making it the largest capital flight from the industry since 2016, HFR said. A sharp change from 2021, when the industry saw a positive $15 billion of net inflows. The only kind of hedge fund strategy that saw an increase of investor money was the $4.3 billion that flew into event-driven mergers and acquisition and credit funds. The size of the hedge fund industry grew in the fourth quarter to $3.83 trillion, a quarterly increase of $44 billion, HFR said.

☆ Macro hedge funds end 2022 on high, many others lose big, investors say
▼ + stars: | 2023-01-10 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro firms, gained 51% last year. Many macro managers sidestepped tumbling equity markets rocked by fast-paced interest rate hikes and geopolitical turmoil including the war in Ukraine to rank among the hedge fund industry's best performers, data from Hedge Fund Research show. The firm's macro index gained 14.2% while the overall hedge fund index dropped 4.25%, its first loss since 2018. Equity hedge funds, where the bulk of the industry's roughly $3.7 trillion in assets are invested, however fared worse with a 10.4% loss, according to HFR data. Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%.

☆ Hedge funds in 2022 post worst performance since 2018, dragged down by equities -HFR data
▼ + stars: | 2023-01-09 | by ( Carolina Mandl | ) www.reuters.com time to read: +2 min

Overall, hedge funds fell 4.25% last year, according to the HFRI 500 Fund Weighted Composite Index, which tracks many of the biggest global hedge fund performances. Equity hedge funds notched the worst performance in 2022 among the four main hedge funds categories tracked by HFR. Despite their massive losses, crypto hedge funds account for a tiny part of the industry's $3.8 trillion in assets. Macro hedge funds outperformed the industry, HFR showed. Macro hedge funds trade globally a broad range of assets, such as bonds, currencies, rates, stocks and commodities.

Commodity Futures Trading Commission (CFTC) data show that speculators closed 2022 with one of the smallest three-month SOFR rate futures short positions of the year, a light short dollar position, and substantial short positions cross the U.S. Treasuries curve. A short position is essentially a wager that an asset's price will fall, and a long position is a bet it will rise. chartFunds' U.S. interest rate expectations reached fever pitch around August and September last year when their net short position exceeded 1 million contracts. chartIn the 10-year space, funds ended 2022 with their third largest net short position of the year, at 383,602 contracts. But funds have retained their substantial net short position.

☆ Hedge fund fees fall to lowest level since 2008 financial crisis -HFR
▼ + stars: | 2023-01-06 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

LONDON, Jan 6 (Reuters) - Hedge fund fees have dropped to their lowest level since the global financial crisis in 2008, research firm Hedge Fund Research (HFR) said on Friday, as high inflation and recession fears hit investors. HFR said hedge fund base fees fell from the second to the third quarter of 2022 by one basis point (bps) to an estimated 1.35% and that average incentive fees tumbled 4 bps to 16.01%. Both estimated fees represent their lowest levels since HFR began publishing the estimates in 2008, a note from the firm added. The top hedge funds in their weighted composite index had a positive 10.9% return while the bottom decile averaged a negative 14.3%. The hedge funds that are easy to get into might not be the best ones to invest in, he added.

☆ Investment management firm AQR books best year in several strategies
▼ + stars: | 2023-01-06 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

Jan 6 (Reuters) - Investment management firm AQR's Absolute Return Strategy in 2022 saw its best year since its inception since 1998, a source with knowledge of the matter said on Friday. Its Equity Market Neutral Global Value and its Global Macro strategies both posted record years at 44.7% and 42.0% net of fees. Its Alternative Trend Strategy also had its best year ever, with a 48.9% net of fees, the source added. AQR is an investment firm that has hedge fund strategies but also includes long-only and mutual funds. Trend strategies would continue to succeed for AQR during sustained downturns and persistent macro volatility, the source told Reuters.

☆ Biggest hedge funds will keep lion's share of customers in 2023, data shows
▼ + stars: | 2023-01-05 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

Jan 5 (Reuters) - The top 5% of the world's hedge fund managers are set to take 80-90% of investor inflows in 2023, according to new research from Agecroft Partners which raises money for hedge funds. The larger a hedge fund manager gets, the harder it is to trade in size and profit from less efficiently priced parts of the market. Data compiled by Hedge Fund Research shows that on average hedge funds were down 4.1% last year through November. The $59 billion hedge fund manager Millennium returned 9.8% in its International Ltd Fund for the year, said industry research. The number of operating hedge funds fell to 9,163 at the end of the third quarter, the lowest number since 2009, according to HFR.

A majority of the 10 global asset and hedge fund managers surveyed by Reuters said commodities are undervalued and should thrive as global inflation stays elevated in 2023. Preqin said just 915 hedge funds were launched in 2022, the lowest in 10 years. "It's the perfect environment for macro hedge funds: central bank policy divergence, interest rate differentials, geopolitical tension, bottlenecks and each country on its own. Macro hedge funds led the industry performance through November, according to financial data firm HFR, up roughly 8%. Lyons is keen to allot more to macro hedge funds and also thinks there are good opportunities in corporate credit.

Dec 30 (Reuters) - Global hedge funds are set to register their worst returns in 14 years in 2022 after aggressive U.S. interest rate rises hit asset prices hard, however, their declines are overall smaller than the slump seen in equity and bond markets this year. Some hedge fund strategies that put money in commodities and currencies using macro-focused strategies and exploited price differences between related securities outperformed in 2022, handing decent gains to investors. According to investment data firm Preqin, hedge fund returns have fallen 6.5% this year, their biggest since a 13% decline in 2008. Strategy-wise, macro funds gained 8.2% through November this year, while equity-hedged and event-driven strategies lost 9.7% and 4.7%, respectively, according to HFR data. Reuters GraphicsAlongside the tumble in traditional assets from equities to bonds, net assets of global hedge funds fell 4.8% in the first three quarters of this year to $4.3 trillion.

That works out to a 31.2% return on total average short interest of $973.6 billion throughout the year, according to S3 Partners. Stanphyl Capital portfolio manager Mark Spiegel, who has been short Tesla "constantly, in varying size" since 2014, said a bet against Tesla was his fund's most profitable individual short position this year. While higher interest rates have punished growth stocks, some investors believe Tesla CEO Elon Musk's purchase of Twitter is diverting his time running the electric car company. Long-short hedge funds, which bet on stock prices rising or falling, posted a 9.7% loss through November, according to data provider HFR. Charles Lemonides, portfolio manager at $226 billion hedge fund ValueWorks LLC, believes tight monetary policy will weigh on risk appetite next year.

☆ Hedge fund Citadel expects to return $7 bln in profits to clients - source
▼ + stars: | 2022-12-21 | by ( Carolina Mandl | ) www.reuters.com time to read: +1 min

Dec 21 (Reuters) - Hedge fund Citadel expects to return about $7 billion in profits to its investors in the first week of January after a stellar performance this year, a source familiar with the matter said. Reuters reported this month that this year was shaping up to be one of Citadel's best years in terms of performance. The hedge fund firm, which manages $59 billion in assets, told investors its flagship Wellington fund returned roughly 32% through the end of November. It has returned more than $11 billion in the last five years as it is more focused on performance, not on capital growth, the source said. The Wall Street Journal first reported the expected capital return earlier on Wednesday.

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