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Opalesque Roundup: CTAs and trend-following hedge fund strategies maintain their momentum, hedge fund news, week 20

In the week ending May 15th 2020, CTAs and trend-following hedge fund strategies maintained their recent impressive momentum, profiting from continued trends across commodities and bond markets, new Société Générale data for April showed. As the economic toll of the novel coronavirus mounted, managed futures posted another positive month in April and gained 0.12% according to the Barclay CTA Index and year-to-date, CTAs gained 1.43% through the end of April.

BarclayHedge also said that U.S. stocks had their best month in decades in April and hedge funds sailed to a 5.46% return in April, according to the Barclay Hedge Fund Index. By comparison, the S&P 500 Total Return Index was up 12.8% in April.

eVestment also said that hedge funds gained an average of +5.02% in April after the largest average monthly loss on record in March, bringing average losses to -7.49% for the year. It is important to remember that while March losses were worse than any single month prior, during the global financial crisis there were large losses in both September and October, and losses in surrounding months as well though not of the same magnitude.

Echoing the same sentiments, hedge funds recouped some of the losses they suffered amidst pandemic-induced market chaos, said Eurekahedge. The Eurekahedge Hedge Fund Index was up 3.73% in April - recording its strongest monthly performance in recent years, supported by the strong performance of the underlying global equity market as represented by the MSCI ACWI IMI (Local), which gained 10.47% over the month.

In new launches, London-based hedge fund Cheyne Capital is planning a new vehicle to buy up debt that's been excessively punished by the coronavirus selloff, the latest in a number of investment firms targeting distressed credit; Emergence, the fund dedicated to accelerating entrepreneurial management companies, announces that it has appointed NewAlpha Asset Management as the investment manager of its future European sub-fund, Emergence Europe, which will be launched before the end of the year, and US-based asset manager Golub Capital announced that it has raised $3 billion of new investment firepower in the past six weeks.

In the meantime, Colorado-headquartered private equity investor Rubicon Technology Partners closed a new fund, Rubicon Technology Partners III, at over $1.25 billion, exceeding the fund target of $250 million set by the company; BDT Capital Partners raised $9.1 billion for its third investment fund, exceeding the amount it had initially sought and Digital Colony, an arm of Tom Barrack's Colony Capital Inc., is seeking at least $6 billion for its second fund dedicated to communications-infrastructure bets

Further in new launches, international investment firm Cathay Capital Private Equity announced the final close of its second Sino-European Mid Cap Fund at $850 million; As economic prospects cloud and volatility returns to all asset classes, investors are looking for alternatives to traditional alternative investments and meeting this need, the Aaro DLT Multifund launched on May 1, 2020; Thoma Bravo is back in the market seeking commitments for its third fund focused on midmarket investments, despite the disruptions posed by the coronavirus pandemic; Dallas-based venture capital firm Energy Spectrum Capital has wrapped up fundraising for its latest vehicle with $969 million; Crow Holdings is targeting a $1.5bn (€1.4bn) capital raise for its latest US value-add real estate fund, while Fortress Investment Group LLC is seeking more than $1 billion for its second lending fund

In performance news, CQS Directional Opportunities fund, a hedge fund run by billionaire trader Michael Hintze has suffered a second large fall in as many months, leaving it down roughly 50 per cent in what is shaping up to be its worst ever run of performance; After suffering its third-worst quarter in its history the Tiger Cub's major funds enjoyed their second-best month in the firm's history in April, according to its first- quarter letter obtained by II; Odey Asset Management's Odey European fund fell 9.5% in April and is now down 3.7% in 2020; Eric Bannasch's Cadian Capital surged about 18 percent last month, exceeding the S&P 500's 13 percent gain during the stock market's best month since 1987, and Verde Asset Management's flagship fund climbed 8.6% in April, its biggest monthly gain since 2009.

In institutional investor news, Texas Teacher Retirement System, Austin, committed $725 million to five alternative investment funds in April, a transaction report from the $167.2 billion fund showed; Louisiana Teachers' Retirement System, Baton Rouge, app... Click here to read Opalesque's full article

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Technical Research Briefing

S&P FUTURES (@ES) – Hourly

Currently: Short Looking to: Cover @ 3,211

As of 9/18/20 close: 3,316.25

LAST WEEK: We suggested selling / shorting rallies up to 3,365 with stops on a close above 3,425 and with a target of 3,091 for covering. We suggested longs at 2,938.

UPDATE: S&P futures are in the middle of support at 3,298 and resistance at 3,367 – 3,382. Right now, we are of the belief that we see 3,298.25 tested and possibly broken. If broken, we should see a move down to 3,211 and possibly 2,983.50 play out. However, one support is established at any of those levels, we are anticipating a run back up towards the highs. Timing is important here due to the impending US Presidential election.

If the election results in dispute or if Trump loses, we are anticipating some short-term, potentially-violent market upset. If Trump loses, we believe he will cease any market-propping activities and let the market do what it will.

We would sell longs / get short at 3,367 with stops on a close above 3,384 and with a target for covering at 3,211. We would look to get long at 2,983.50 with stops below 2,980 and with an upside target of 3,400.

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