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Laxman Pai, Opalesque Asia: The month of September was overall tough for hedge funds as CTAs and L/S Equity strategies underperformed on the back of sector rotations. According to benchmark liquid indices, several strategies were down, said Lyxor in its Weekly Brief.
A press release from Lyxor's Cross Asset Research team, focused on hedge fund flows, performance and positioning revealed that the L/S equity and macro/ CTA strategies underperformed on the back of sector rotations impacting negatively the former and higher bond yields and the US Dollar reversal impacting the latter.
However, there were some very bright spots, it said fixed income arbitrage managed to protect bond portfolios against the rise in bond yields which took place in the largest economies over the recent weeks.
Merger arbitrage flies higher on Sky tailwind
Meanwhile, merger arbitrage was fueled last week by Sky's stock price rally (+8.6% on September 24th) after Comcast won the auction for the European pay-TV giant with a £30.6bn bid.
The consolidation of the media industry has been a major contributor of performance for merger arbitrage strategies this year and remains a big focus for them. Driven partly by the dominance of Tech giants in the advertising space, large media groups are being forced to restructure at a fast pace to protect their market share.
Other significant transactions in merger arbitrage portfolios also include deals in the health care sect...................... To view our full article Click here
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