Hedge Fund Trends

Recent developments in the hedge fund industry showcase its dynamic nature, with firms like Weiss Multi-Strategy Advisers closing down while others, like Balyasny Asset Management, undergo restructuring to adapt to changing market conditions. Point72 Asset Management’s decision to halt new investments highlights the challenges of optimizing performance amid economic uncertainties. Among the other interesting events, Parvus Asset Management has expanded its ownership in the budget airline Ryanair to over 7%. Overall, these developments reflect the ongoing evolution and resilience of hedge funds in today’s financial landscape.

George Weiss Shuts Down Weiss Multi-Strategy Advisers After Decades in the Industry

George Weiss, the founder of Weiss Multi-Strategy Advisers, has been seeking a new owner for his $3 billion business for some time. Eventually, he decided to wind up his business; this news was reported by Bloomberg. The fund did not fully utilize the 6% gain obtained last year, as it only slightly surpassed the risk-free rate of 5% and lagged behind other multi-strategy funds that achieved outstanding performance in 2022, garnering double-digit gains.

Less than a week ago, the 81-year-old head of the small investment firm issued a statement notifying investors that he would return their investments, thereby closing the fund’s operations after 46 years in the business.

Weiss’s letter to the investors was an open acknowledgment, where he pointed out that he had made the decision to cease the fund’s operation following a thorough appraisal of several factors and circumstances

This information is based on the article analysed and reported by ThePlatform’s analysts team: https://www.hedgeweek.com/weiss-tried-to-sell-hedge-fund-before-calling-it-quits/

Revitalizing Balyasny: New Portfolio Managers Join Amid Changes in Equity Trading Business

Balyasny Asset Management has hired multiple portfolio managers in an effort to rejuvenate its hedge fund’s equity trading business.

The upcoming month will witness Andrew O’Connor of Weiss Multi-Strategy Advisers LLC switching to the New York office of Balyasny. This relocation overlaps with the announcement of the closure of Weiss Multi-Strategy Advisers, which has been in operation for half a century.

Alongside him, set to join the Balyasny office in Miami in the spring is Vaibav Bajpai. In addition to his previous association with LMR Partners, Manoj Bajpai is set to gain experience at Balyasny, following his earlier years at Ken Griffin’s multistrategy hedge fund Citadel. Moreover, David Lohman, the former partner of Schonfeld Strategic Advisors, will be one of the team members at Balyasny, joining them in New York later this year.

These new appointments coincide with broader changes within Balyasny’s equities trading units, prompted by performance setbacks last year. Notably, Marco Minoli recently joined Dubai as a portfolio manager focusing on consumer equities. Moreover, Balyasny has recruited Dan Avery, a former equity arbitrage trader at Millennium.

However, the firm has also experienced significant departures, including Jeff Runnfeldt, who served as the global head of equities and left last year. Gustav Rydbeck, the chief operating officer for equities trading investments, departed this month. In both cases, co-founder and chief investment officer Dmitry Balyasny and a group of senior colleagues assumed their responsibilities taking charge of their tasks.

With approximately $21 billion in assets under management, Balyasny reported a 1% increase in performance for the year ending March 7th.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.bloomberg.com/news/articles/2024-03-11/balyasny-hires-portfolio-managers-in-hedge-fund-reshuffle

Qube Research & Technologies Takes Historic Short Position Against Barclays Amid CEO’s Turnaround Strategy

Qube Research & Technologies, a quant hedge fund based in London, which emerged from Credit Suisse in 2018, built the largest short position ever recorded against Barclays. This position constituted 0.73% of the bank’s stock, according to a report from The Times.. Despite a recent upsurge in Barclays’ stock price following Chief Executive CS Venkatakrishnan’s unveiling of a turnaround strategy aimed at revitalizing the bank’s prospects, Qube’s substantial short bet suggests a belief, either by the firm or its algorithms, that the stock’s rally is likely to be short-lived.

Venkatakrishnan, aiming to increase the market capitalization of Barclays banking so it competes on the same level as the EU and US peers, promised on the 20th of February to return over £10 billion to shareholders over the next three years, cut costs, and raise revenues to £30 billion by the year 2026. In reaction, a 20% jump has been seen in its shares to £177.5, which is the best in a year though.

The report indicates that Qube has been incrementally increasing its short position against Barclays as the share price rallied, crossing the 0.5% threshold that necessitated disclosure of short positions to the Financial Conduct Authority (FCA) on February 27th, according to regulatory filings.

A spokesperson for Qube mentioned in the report stated that the firm’s trading activities do not reflect a “fundamental view on any individual name” and clarified that they hold “no specific view on Barclays.”

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.hedgeweek.com/qube-builds-biggest-ever-barclays-short-position/

Point72 Asset Management Hits All-Time High with $3.8 Billion Inflows, Prioritizes Returns Over New Investments

Point72 Asset Management has seen a significant rise in its funds, raising approximately $3.8 billion over the past year, pushing its assets to an all-time high and marking six years since founder Steve Cohen’s return to the hedge fund sector.

Starting this year, the firm managed around $32.3 billion, with Cohen’s share representing a third of the total, surpassing the previous peak of its predecessor, SAC Capital Management, which amassed in its two-decade history.

However, Point72 has chosen to primarily halt new investor inflows, partly to prioritize existing clients’ returns, as disclosed by a source familiar with the matter. Excessive capital within a strategy can sometimes impede performance.

Despite a challenging environment for hedge fund fundraising, characterized by higher interest rates and a slowdown in private equity deals, Cohen managed to attract fresh investments. Since the firm’s inception in 2018, external capital has grown to $5.8 billion.

Notably, Point72 has accumulated nearly $12.8 billion since 2020, including investments from wealth management banks, while several other multimanager hedge funds have closed their doors to new capital for an extended period.

Point72 has previously suspended or limited inflows, as in a July 2020 letter to investors following a modest return of about 4% in the first half of the year. Such moves, while not always communicated through client letters, have occurred intermittently since then.

It’s common for managers to halt cash intake or even return capital to existing investors when investment opportunities are scarce. These pauses can be flexible, particularly if a large investor like a sovereign wealth fund provides substantial capital. Funds may swiftly resume operations based on economic shifts or market changes.

Point72’s decision aligns with several other major multimanager funds, such as Citadel, led by Ken Griffin, which has restricted new capital since 2015. Similarly, Millennium Management, under Izzy Englander, returned $15 billion to investors by the end of 2022 to extend the lock-up period for client capital. Balyasny Asset Management, managing approximately $21 billion, has also halted new investments.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.bloomberg.com/news/articles/2024-03-13/cohen-s-point72-shuns-new-cash-with-assets-at-record-32-billion

Parvus Asset Management Boosts Stake in Ryanair to Over 7%, Signals Potential Activism

Parvus Asset Management, an activist hedge fund based in London, has expanded its ownership in the budget airline Ryanair to over 7% from approximately 6%, following the acquisition of an additional €230 million worth of shares, as reported by The Irish Times.

New stock exchange filings reveal that the investment firm’s stake in the Irish airline now stands at approximately €1.6 billion, with Ryanair’s stock currently trading at around €20.50 per share, showing a steady increase from a recent low of around €14 seen in October last year.

Founded by Edoardo Mercadante, Parvus Asset Management manages assets worth around $5.5 billion. The firm has previously taken significant positions in Ryanair, only to later reduce them. It remains unclear whether the firm intends to push for changes in the company this time.

Parvus Asset Management has a history of activism, including challenging betting firm William Hill over its proposed deal with Poker Stars owner Amaya and opposing the purchase of Denmark’s ISS by private security firm G4S.

This information is based on the article analysed and reported by ThePlatform’s analysts team: https://www.hedgeweek.com/activist-parvus-ups-ryanair-stake-to-over-7/

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