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In the week ending July 21st 2023, a report in Financial Times said that hedge funds that bet on the outcome of mergers and acquisitions have suffered losses this year as big deals hit regulatory roadblocks and the pipeline for transactions dries up. So-called merger arbitrage traders, who buy stakes in companies that are being acquired in expectation that shares will successfully be sold for a higher price, have lost 2 per cent on average in 2023, according to data from Hedge Fund Research.

Meanwhile, the hedge fund industry is grappling with a protracted period of withdrawals as investor interest in the sector recedes. For twelve consecutive months, the sector has experienced net outflows - coupled with the worst May since 2009. The industry's total Wall Street exposure has fallen to the lowest in over 10 years - despite US stocks enjoying a remarkable 2023 bull run.

In new launches, Fir Tree Partners, a New York-based hedge fund, is launching a new fund focused on distressed crypto assets, an attempt to cash in on the intense turmoil the industry has experienced in the past year or so; Jive Investments, Brazil's largest distressed-asset manager, is planning to raise as much as 5 billion reais ($1 billion) this year for a fund to capitalize on opportunities created by a booming number of struggling companies, while JPM Asset Management has opted to roll the $94.8m US Opportunistic Long/Short Equity fund into the much larger US Select Equity Plus fund, Citywire Selector has learned.

In the meantime, former Citadel traders Jonas Diedrich and Dave Sutton have exceeded the capital raise target for their hedge fund, making it the biggest startup of the year; Luxembourg-based global private equity firm CVC Capital Partners closed its latest buyout fund, CVC Capital Partners IX, at €26 billion ($29.2 billion), above its target of €25 bi......................

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