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Opalesque Roundup: Smaller hedge funds only segment with net inflows as industry assets peak : hedge fund news, week 17

In the week ending 17 April, 2017, hedge fund assets reached $3.07tln in the first quarter of 2017 as the industry sustained its expansion to a third consecutive quarterly record.

When analyzing the net outflows of the first quarter by firm size it was found that outflows were concentrated in the industry's largest firms: Companies with AUM greater than $5 billion experienced outflows of $5.9 billion. Firms managing between $1-5 billion saw net outflows of $500 million, while firms managing less than $1 billion received net inflows of $900 million.

Rayney Gobran released the list of the biggest hedge funds by assets under management; Man Group reported a 10% rise in assets in Q1 to $88.7bn from inflows, performance and acquisition; data from eVestment showed that reported a 10% rise in assets investors allocated $15.7bn in new money to hedge funds in March; and Blenheim Capital Management has opened to outside investors for the first time since its launch.

Pierre Villeneuve has launched a new trading firm called Q Capital; and MegaTrust Investments is launching a new offshore fund that will replicate the strategy of the firm's flagship fund Yangtze II.

John Burbank III's Passport Capital is shutting down its long-short equity fund - a key fund which managed about $833m.

The Preqin All-Strategies Hedge Fund Index posted gains of 3.18% in Q1;
And Lyxor Asset Management said that hedge funds proved resilient with most strategies being positive in the first half of April.

Equities and energy commodities peaked in performance in early March as risk appetite has faded lately; Rokos Capital Management lost 4.7% in the first quarter as macro funds struggled; Andurand Commodities Fund lost 8.5%, or around $130m, in January and February after incorrectly betting that the price of oil would rise; Strategic Value Bank Partners grew about 24% in 2016; Arquitos Capital Partners returned 17.6% net of fees in the first quarter of 2017; Michael Rothenberg's Moab Partners was up 0.12% in March, bringing yearly performance to 3.06%; and BlackRock said it earned $862m, or $5.23 a share, in the first quarter, up 31% from the same quarter a year earlier.

Among investments, hedge funds are betting more and more money against brick-and-mortar retailers; Carden Capital is taking advantage of investor interest in systematic strategies to talk to investors about volatility as an asset class; a growing number of hedge funds and Madeleine Albright are betting on a debt crisis; BlueMountain Capital led the recapitalization of Corizon, which does business at 273 facilities in 21 states for 40 clients; Ecofin said an offer from EDP to buy 22.47% of subsidiary EDP Renovaveis "significantly undervalues" the company; DBS and Lombard Odier say emerging markets are a better bet amid heightened political risk in Europe; and Mike Novogratz is betting big on digital currencies like Bitcoin and Ether.

In other miscellaneous hedge fund news, some large institutional investors didn't pay high fees for hedge fund investments in 2016 due to poor performance; Elliott Management hailed the resignation of Klaus Kleinfeld from Arconic; Jeanne Asseaf-Bitton said that the financial markets remain calm as if oblivious of the political uncertainties shaping the world; and the Lithuanian Parliament has introduced a Magnitsky bill proposing to refuse entry to persons who have been involved in corruption.

A study by Deutsche Bank showed that institutional ETF ownership of assets grew by $213bn, reaching $1.44tln in 2016; The Pew Charitable Trusts said that state public pension funds' portfolios are becoming increasingly complex; data from Merrill Lynch showed that institutional clients continue to miss entire on the market rally; and a Goldman Sachs Capital survey has found that future hedge fund inflows look positive.

In FinTech update, hedge funds are hedging toward open source collaboration that are enticing developers; Chris Anderson said that machines now have knowledge human will never understand; and CP Multi-Strategy Fund recorded a cumulative return of 50.73% with no losing year since deploying AI-assisted strategies in Sep 2013.

On the M&A scene, Sprott Asset Management LP has entered into an agreement to sell its Canadian diversified fund business to a management-led group; Stone Point Capital and KKR have acquired a majority stake in wealth management firm Focus Financial Partners; a Macquarie-led consortia of investors will privatize and acquire the UK's Green Investment Bank, a government-backed bank that uses public funds; and asset manager Schroders will acquire Swiss private equity firm Adveq for an undisclosed sum.

Institutional investor saga, the California Public Employees' System have confirmed that the fund is reviewing how it invests in private equity; and some of the richest U.S

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