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Opalesque Exclusive: Oldest and biggest hedge funds have the most assets: hedge fund news, week 16

In the week ending 11 April, 2014, the oldest and biggest hedge funds have the most assets according to the latest data from eVestment; Capstone Investment Advisors’ Paul Britton predicted that his current $2.5bn assets will grow to $10bn within five years; Eurekahedge said hedge funds attracted over $30bn in the first quarter; BarclayHedge and TrimTabs Investment Research reported hedge funds received $24.3bn in February; Coatue Management said it would returns as much as 35% of the money in his main $7bn fund; and Ashmore Group’s assets dropped $6.2bn in the third quarter of this year.

Credit Suisse and Luis Stuhlberger have agreed to set up a new asset management venture and launched a fund with $13.6bn in assets; Aventicum Capital launched its European long/short hedge fund, Aventicum Alternative Equities; and Qatar’s sovereign wealth fund executive Kamel Maamria is leaving to start a hedge fund.

First Trust Advisors launched a new liquid alternatives platform to build on existing alternative ETFs; and ML Capital, launched a London based independent alternative asset manager, the North MaxQ Macro UCITS Fund.

The HFRI Fund Weighted Composite Index was down -0.34% in March (+1.07% YTD);
The Greenwich Global Hedge Fund Index retreated -0.16% (+1.18% YTD);
The S&C GlobeOp Hedge Fund Performance Index: March performance -1.03%; Capital Movement Index: April net flows declined 0.48%;
The IndexIQ Hedge Composite Beta Index returned -0.45% (+1.05% YTD);
And the UCITS Alternative Index Global fell 0.33% (+0.34% YTD).

March was not kind to hedge funds as many of the big wigs suffered performance during the month; hedge funds ended the first quarter of 2014 up 1.31% but still lagged the S&P500; Deutsche Bank said stocks with concentrated hedge fund ownership and momentum names have underperformed over the last few months; the world’s largest hedge fund, Bridgewater Associates, outperformed its peers in March and posted modest returns; Paul Tudor Jones, Michael Novogratz and Louis Bacon posted losses in the first quarter as some of those trades turned against them; Cologny Advisors was up 3.7% in March (18.7% YTD); Steve Cohen’s renamed hedge fund Point72 Asset Management (formerly SAC Capital) returned almost 10% in March; John Paulson's Advantage Plus fund fell 7.4% in March in part by losses in the gold market; Pershing Square Capital Management, led by activist investor Bill Ackman, generated big returns in 2014; Polygon Global Partners’s European Equity Opportunity Fund gained 10.4% through the first quarter of this year; and Ken Griffin’s Citadel returned more than 300% in a fund started as a high-frequency strategy in late 2007.

Sir Michael Hintze said shorting the Australian dollar last year was an act of patriotism.

Among investments, hedge funds are borrowing record amounts of money to fund bets that stock markets will continue rising; hedge funds and speculators cut so-called net shorts in the Australian currency; hedge funds and speculators got their timing wrong as gold prices edged up; several large hedge funds doubled down on Puerto Rico in last month's giant bond sale; Lansdowne Partners placed a $325m bet against Unilever; TPG Capital is close to signing an agreement to invest in room-sharing service Airbnb at a $10.7bn valuation; Kerrisdale Capital reversed a long-standing trade in internet banking player BofI Holding; Fidelity Investments is exploring the creation of a new trading venue with other asset managers; Greek bonds have rewarded early buyers with big returns; and Cargill accumulated an 11.6% stake in a single class of preferred shares issued by Freddie Mac.

In other miscellaneous hedge fund news, new global macro fund, Aimed Global Alpha Fund, follows the manager’s own growth and inflation indicators, not market prices; a new white paper from Roy Niederhoffer and Coen Weddepohl noted CTAs could face new challenges in a rising rates environment; William Davies said geopolitical risk could create buying and selling opportunities in equity market; Brian Walsh said opportunity to extract alpha from structured credit is 'now much more difficult'; and the Investment Management Association is to merge with the Association of British Insurers' investment affairs unit.

Joint studies by the FSB and IOSCO found that fund managers insist that leverage and not size should be the key metric in looking for non-bank, non-insurer financial firms that could rattle the financial system if they failed; Convergence said nearly one out of four fund operators rely on third-party contractors to perform key compliance functions; and CFA Institute unveiled its economic outlook and investment opportunities in the MENA region.

Among outlooks, John Fraser said hedge fund professional predicted that uncertainty and volatility would drive hedge fund success.

Institutional investor United Parcel Service corporate pension fund is finalizing an asset liability study this year for a new strategic asset allocation; pensions, endowments, and family offices reconsider investments in life settlement said Scott Page; Bridgewater Associates estimated that most public pension funds will run out of money in 30 years; and Japan's $1.26tln public pension fund seeks to diversify its holdings and generate higher returns to finance a rapidly ageing population.


In the U.S., Powhatan Energy Fund embarked on a public campaign to stop Norman Bay from being confirmed as the next chairman of the Federal Energy Regulatory Commission; and Jamie Dimon said hedge funds, low-income borrowers and municipalities face steeper costs from global rules enacted after the financial crisis.

In Asia, Joseph Pacini said Asia hedge fund managers that could find opportunities in the credit space would drive the regional industry.


On the regulatory front, a Preqin survey showed only 4% of hedge fund managers have registered to market under JOBS Act; the SEC created a dedicated task group to examine private equity and hedge funds; CFTC chief Mark P. Wetjen said high-speed traders are not rigging futures; the IRS extended the deadline to register under FATCA; the SEC issued guidance on investment adviser advertising and social media commentary; the Financial Industry Regulatory Authority launched a review of its rules to determine impact and costs; and U.S

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