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From Kirsten Bischoff, Opalesque New York:
This week Bank of America Merrill Lynch estimated that equity long/short funds reduced their net exposure sharply to 20% long. And for a brief while on Wednesday, the Twitterverse was abuzz with rumors that Paul Tudor Jones had called a top to the stock market (later his PR firm Abernathy MacGregor stepped forward to say was just an unfounded rumor).
“The smart money is probably feeling apprehensive about the markets,” Scott Schneider, Managing Director at New York-based SawMill Lane Capital commented to Opalesque. Schneider manages the event-driven, activist arbitrage fund the Sawmill Capital Fund, which capitalizes on the price spreads created by activist and value investors. By the nature of his strategy, which looks to gain investors exposures to multiple activist/value investor managers, the fund’s cash holdings can be reflective of the broad feelings of managers in that space.
“In January we had very few holdings. Usually we average 30 and right now we are at 10, which is reflective of the positions of the big funds,” he says. The Sawmill Fund is currently 66% in cash.
Launched in January 2009, Schneider, and his partners Chief Risk Officer David Lifchitz, and COO Henry Schneider developed the strategy after reading a 2007 study by Morgan Stanley’s Michael Schor and Har...................... To view our full article Click here
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