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HEDGE FUNDS

Major Fund Restructurings and Performance

The hedge fund industry witnessed significant structural changes this week, with Taconic Capital Advisors announcing a major overhaul that will see it shuttering its $1.8 billion flagship multistrategy hedge fund and shifting focus to North American credit and merger arbitrage. The changes will substantially reduce Taconic's $4.5 billion in assets as it spins out its European credit strategy and reworks its C-suite.

D.E. Shaw & Co. is breaking new ground by raising between $3 billion and $5 billion for its D.E. Shaw Cogence Fund, marking the firm's first hedge fund where human traders will call all the shots instead of algorithms. The fund, which is already oversubscribed with most initial capital coming from existing investors, will begin trading on October 1.

Performance varied widely among Tiger-related funds in August, with D1 Capital Partners leading the pack with a 24% year-to-date gain through August after adding one percentage point last month. Meanwhile, AlphaQuest, which added "Alpha" to its name in January, suffered an 11.4% loss through August and is down approximately 30% since October 2022, marking its worst losing streak since 2001.

Regulatory Developments

The SEC postponed hedge fund disclosure requirements by a year, with Chairman Paul Atkins announcing the delay until October 1, 2026, for private funds to file additional disclosures about their financial positions during market tumult. The regulator is also exploring ways to reduce the number of private industry firms required to file confidential information.

In a victory for hedge funds, the Commodity Futures Trading Commission approved Japan Securities Clearing Corp.'s request to clear yen interest rate swaps for US customers, providing better liquidity after trade groups advocated for the move despite concerns about collateral handling and bankru......................

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