Hedge Fund Trends

As the financial landscape continually evolves, hedge funds remain at the forefront of innovation and adaptation. In this article, we delve into the latest developments shaping the world of hedge funds, exploring emerging trends and investment strategies. The hedge fund industry is undergoing transformative changes that impact both managers and investors alike.

Segantii Capital Management Faces Insider Trading Charges

Hong Kong’s securities regulator has initiated legal action against Segantii Capital Management Ltd., its founder Simon Sadler, and former trader Daniel La Rocca for suspected insider trading, marking a significant financial prosecution in the region. The allegations involve misconduct related to shares of a listed company before a 2017 block trade. Sadler and La Rocca appeared in court without entering a plea, with the case adjourned to June 12. This adds to Segantii’s regulatory troubles, following a fine by South Korean regulators in December for certain trading activities. Sadler and La Rocca have been released on bail and are subject to various restrictions imposed by the regulator. Sadler, who founded Segantii in 2007, grew it into a major player in the region, boasting impressive returns. La Rocca, who was set to join JPMorgan, saw the hiring fall through for undisclosed reasons.

This information is based on the article analyzed and reported by ThePlatform’s analyst team: https://www.bloomberg.com/news/articles/2024-05-02/hong-kong-watchdog-prosecutes-segantii-pair-for-insider-dealing

Rokos Capital Management Leads Macro Funds with Strong 20% YTD Gains in 2024

Rokos Capital Management, led by Chris Rokos, one of the founders of Brevan Howard, has continued its strong performance in 2024, with gains reaching approximately 20% year-to-date. This places it among the top-performing macro firms, as reported by Bloomberg.

According to an undisclosed source familiar with the matter, the $17 billion fund achieved a gain of about 6% in April, outperforming several other macro funds during the same period.

Data from Citco, a fund administrator, reveals that the performance of global macro funds exhibited significant disparity during the first quarter of the year. Top performers recorded gains of 20% or more, while the weakest performers suffered losses of up to 10%.

Despite a sell-off in US bonds triggered by a shift in interest rate expectations, Rokos, renowned for making high-conviction leveraged bets, reportedly capitalized on the market’s change in direction.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.hedgeweek.com/rokos-extends-ytd-gains-to-20/

Weiss Multi-Strategy Advisers LLC Files for Bankruptcy Amid Asset Liquidation

Weiss Multi-Strategy Advisers LLC has declared bankruptcy approximately two months after announcing its decision to cease operations. The New York-based investment management firm, with assets ranging between $10 million and $50 million, is reported to owe creditors up to $500 million, as stated in its Chapter 11 petition filed in federal court in Manhattan.

George Weiss, who founded the firm in 1978, revealed that the company managed $3.1 billion in assets as of mid-2023, according to With Intelligence. In the bankruptcy filing, Weiss explained that the decision to file for bankruptcy came after a thorough examination of all short and long-term options.

In early March, Weiss informed clients that the firm had largely liquidated the portfolios it managed.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.bloomberg.com/news/articles/2024-04-29/weiss-multi-strategy-hedge-fund-files-bankruptcy-after-shutdown

Hedge Fund Allocations Among Ultra Wealthy Plummet, Declared ‘Dead’ as Investment Option

According to a CNBC report citing Michael Sonnenfeld, Founder and Chairman of Tiger 21, hedge fund allocations among ultra-high net worth individuals (UHNWIs) have plummeted from around 12% to just 2% of their investment portfolios over the past 16 years. Sonnenfeld describes the asset class as effectively “dead” for the super-rich, noting a consistent 2% allocation over the last few decades among Tiger 21 members. He suggests that investors can achieve similar exposure with lower fees through index funds or private equity investments.

Tiger 21’s members, largely first-generation wealth creators totaling 1,300 globally and managing over $150 billion in assets collectively, favor private equity as the largest allocation at 29%. Real estate investments (27%) and public equities (19%) also rank high among their preferred investment choices.

Tiger 21 serves as a platform for UHNWIs and entrepreneurs to dialogue on on wealth preservation, investments, and philanthropy.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.hedgeweek.com/hedge-funds-are-dead-as-a-doornail-for-uhnwis-says-tiger-21-boss/

Hedge Funds Shift Defensive Amid Market Uncertainty: Health Care Stocks Gain Favor

Hedge funds are adopting a more defensive stance amidst growing uncertainty surrounding geopolitical issues, interest rate trajectories, and the recent volatility in the stock market. Data on positioning reveals that in April, hedge funds increased their defensive equity holdings at the quickest rate in eight months while continuing to offload global stocks overall—a shift from their previous four-month buying streak. Healthcare stocks attracted the most inflows, while consumer discretionary stocks experienced their largest net selling in seven months, according to Goldman Sachs Group Inc.’s prime brokerage desk.

This defensive posture aligns with the current market environment, characterized by heightened choppiness and volatility surrounding interest rates and inflation, following a strong first quarter performance. Concerns over the US economy, consumer sentiment, persistent inflation, and cautious corporate guidance are weighing on investor sentiment.

While defensive sectors like utilities, consumer staples, and health care have underperformed in the S&P 500 over the past year, historical data suggests that these sectors could benefit from prolonged higher interest rates, as observed since the 1970s. The focus on US healthcare stocks, in particular, may stem from their lack of cyclicality, offering investors a refuge from market volatility.

With the S&P 500 Health Care Index trading at a comparatively lower valuation than the information technology sector, investors may be inclined towards value shares as a means of building defense and diversification in their portfolios. This rotation away from big-cap tech stocks towards value shares could be driven by the desire for cheaper valuations and increased stability, according to industry experts.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.bloomberg.com/news/articles/2024-05-02/hedge-funds-buy-protection-with-defensive-stocks-goldman-says

New Launches of Multi-Strategy Hedge Funds Decline Amid Performance Challenges

According to a Reuters report, new launches of multi-strategy hedge funds significantly declined in the first quarter of the year, accounting for less than 10% of all new funds—a sharp drop from about 25% in the previous quarter of 2023. Data from Preqin indicates that these launches have reached their lowest point in about a year.

While large multi-strategy managers have been favored by investors in recent times, research from Barclays’ prime brokerage division reveals that only seven multi-strategy firms manage assets exceeding $10 million. Among the 47 multi-manager funds tracked by the bank, 32 oversee less than $5 billion in assets.

Furthermore, new funds have struggled to match the performance of established managers over the past three years, with annualized returns averaging about 7.9%, approximately 1% lower than existing firms managing over $5 billion in assets, as per Barclays’ data.

In general, multi-strategy funds, which have historically outperformed the broader hedge fund sector by an average of 1% over the past three years, faced a challenging start to 2024. They posted an average gain of 3.1% in the first three months of the year, lagging behind the industry average of 4.4%.

This information is based on the article analyzed and reported by ThePlatform’s analysts team: https://www.hedgeweek.com/multi-strat-launches-dive-in-q1-says-preqin/

Join ThePlatform to have full access to all analysis and content:   https://www.theplatform.finance/registration/

Disclaimer: https://www.theplatform.finance/website-disclaimer/

You may also like...

Hedge Fund Trends

The hedge fund sector remains dynamic, adapting continuously to market shifts and investor demands. Lately, there's been a discernible trend towards diversification in investment strategies. Hedge funds are progressively delving into alternative assets and novel methodologies, moving beyond conventional markets.…...

Hedge Fund Trends

The hedge fund industry is characterized by its dynamic nature, constantly evolving in response to market trends and investor preferences. In recent times, there has been a notable diversification of investment strategies, with hedge funds increasingly exploring alternative assets and…...