Hedgeweek Newsletter

NEWSLETTER | 5 Feb 2021

Though some short sellers were still counting the cost of the recent coordinated GameStop trading surge by amateur traders from Reddit’s Wallstreetbets forum – the subsequent steep losses inevitably roared on by some sections of the popular press – this week brought a degree of optimism and some much-needed cheer to the beleaguered hedge fund industry, amid signs that the coast is now clear for managers to step back into the fray following the recent chaos.

Man FRM – the long-running fund-of-funds unit of London-headquartered, publicly-traded global investment management giant Man Group – indicated that an “unusually large” spread of hedge fund strategies stand to gain from the various trading opportunities arising from the prevailing investment landscape.

Its wide-ranging Q1 strategy outlook explored how a nascent economic recovery, coupled with the Covid vaccine rollout and continued central bank support, is set to boost a range of credit, equity long/short, macro and relative value funds during the first quarter.

The past few days’ headlines may have made for uncomfortable reading for certain sections of the hedge fund sector. But given that 2020 proved to be one of the strongest years of performance in this industry’s recent history – which has landed alternatives firmly back on the radar of investors globally – it’s always worth reminding ourselves of the bigger picture and a broader perspective.

Indeed, longevity is very much a watchword for Dixon Boardman, the pioneering founder and CEO of New York-based multi-manager group Optima Asset Management, who forthrightly declared this week that “hedge funds are back”.

The veteran hedge fund investor has pinpointed Asia – especially China and India – along with the healthcare sector, and concentrated ‘best ideas’ stock-picking by top long/short equity managers, as three key areas of interest that he believes are driving industry successes.

Meanwhile, as media reports speculate that hedge funds have regrouped and are once again building out risk following the recent retail-driven carnage, the impact of the GameStop saga is predicted to reverberate across the industry for some time yet.

Peter Hillerberg, of London-based equity research firm Ortex Analytics, said the episode shows that the information advantage previously held by financial institutions has been dismantled, heralding a fundamental change in the way markets work and “far reaching consequences” for hedge funds and short sellers.

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Hugh Leask
Editor, Hedgeweek

Fri | 5 Feb 2021, 11:41

Assured Capital Partners' Balanced Growth Fund had another extraordinary year in 2020, despite the coronavirus pandemic, narrowly missing out on surpassing a 40 per cent return for the third time in the fund’s existence.

Fri | 5 Feb 2021, 11:41

The European Power Spot markets, operated by EPEX SPOT, increased by 3 per cent to 54.7 TWh in January, according to the latest data released by EEX.

Fri | 5 Feb 2021, 11:41

The Hedge Fund Association (HFA), an international nonprofit trade and nonpartisan lobbying organisation, has added new HFA Officers, Regional Directors and Committee Leaders.

Fri | 5 Feb 2021, 11:41

Bitfinex, a digital token trading platform, has seen a 300 per cent increase in new accounts in the first month of 2021.

AllianceBlock and Bridge Mutual partner to provide compliant coverage to DeFi

Fri | 5 Feb 2021, 11:41

Bridge Mutual, a decentralised, peer-to-peer discretionary coverage platform for digital assets, has partnered with AllianceBlock, a decentralised, blockchain-agnostic layer 2 protocol that bridges traditional and decentralised finance.

Quaternion acquired by AcadiaSoft

Fri | 5 Feb 2021, 11:41

AcadiaSoft, a provider of risk and collateral management services for the derivatives community, has acquired capital markets consulting and software company Quaternion.

Reflection after the tumult

Fri | 5 Feb 2021, 11:41

By A Paris – In what has been a rollercoaster year from all perspectives, 2020 saw the Cayman Islands being first placed on the European Union blacklist in February, followed by its removal from said list in October, after it made improvements to its tax framework.