The truth about private equity fund size From Institutional Investor: As the end of the year approaches, institutional investors in private markets are wrapping up work on the last few funds we need to invest in to hit our targeted annual commitment levels. You see, private equity is sort of like a treadmill. Money is always going out and coming back. Just...

Bailey McCann, Opalesque New York for New Managers: New data from Preqin and 50 South Capital, the investment arm of Northern Trust, shows that emerging managers are outperforming established managers by almost 4% annually. The outperformance holds across strategies, indicating that i...

From Bloomberg: Quant investing, and indeed much of the hedge fund industry, is built on the power and freedom that come with the ability to sell short. When you short a security (borrow and then sell it, meaning you make money if the price falls and you then re-buy it), you can profit when markets go down as well as up. Hedge funds, unlike mainstream mutual funds, can sell short, and t...

Laxman Pai, Opalesque Asia: Boston-based HarbourVest Partners closed its latest private equity fund above the fundraising target - the $3 billion HarbourVest Partners Co-Investment Fund V was oversubscribed and above its $2.5 billion target. The fund's strategy is to create a global, diversified portfolio of direct co-investments in buyout, growth equity, and other private ...

From Institutional Investor: Timing the market can be "deceptively difficult," as quantitative investor Cliff Asness has pointed out before. But now, the AQR Capital Management co-founder believes that while factor timing is "an ugly thing," it is "about time we did some" - specifically when it comes to value stocks. Value investing - identifying stocks tha...

Fund managers face crackdown after Neil Woodford scandal From The Times: Asset management giants have been warned that their funds could be suspended and wound up after just three months if they do not ditch riskier stocks in the wake of Neil Woodford's downfall. The threat has been issued by so-called depository companies such as Northern Trust, which...

US private equity bids for UK companies switch to dollars From FT: US private equity groups buying UK-listed companies have started paying in dollars rather than pounds, in a move that protects them from Brexit-related swings in sterling and passes the risk to UK shareholders. Bids for cyber security group Sophos and satellite company Inmarsat were both made...

Private markets are much more volatile than they appear From Institutional Investor: Public companies are priced almost every second. Companies held by private equity and venture capital funds are valued four times a year. Does that mean private assets are truly less volatile than public ones? Investors are now questioning the real volatility of private ...

From Institutional Investor: It's an enduring paradox: hedge funds run by women and minorities outperform their peers - but run less money. Evidence continues to mount that the money investors allocate to minority- and women-controlled hedge funds stands a better than even chance of outperforming assets in the broader hedge fund marketplace.For the first three quarters of 2019, the...

From Institutional Investor: Commodity trading advisers had a post-summer swoon in September. After posting two strong months of performance in July and August, the computer-driven strategy - also called managed futures - reported losses mostly ranging between 3 percent and 5 percent last month. The strategy, which enjoyed rare capital inflows in August, gave up some of its summer gain...

It's been a strange year for Mithril Capital Management, the venture firm cofounded in 2012 by Peter Thiel and his longtime associate Ajay Royan. Though Mithril enjoyed its biggest exit to date in February, when Johnson & Johnson agreed to pay $3.4 billion, plus another potential $2.35 billion in payments for the surgical robotics company Auris Robotics, the firm has been characterize...

Point72 used big data to Short Weight Watchers, Dave & Buster's From Bloomberg: Big data gave Point72 Asset Management a fresh view into Dave & Buster's Entertainment Inc. -- and a reason to short the chain. Combing through geo-location data linked to anonymous credit card information, the hedge fund discovered that when customers went to e...

Bailey McCann, Opalesque New York: Albright Capital has adopted the International Finance Corporation's Operating Principles for Impact Management. The firm has also developed its own impact measurement system as part of the implementation of the principles. The IFC's principles were finalized and officially launched on April 12, 2019, at the World Bank Group-IMF...

In the context of cybersecurity, social engineering can best be defined as the use of deceptive tactics to prompt individuals to grant access or disclose information for fraudulent or malicious purposes. We've all become very accustomed to seeing phishing emails, the most basic and most common form of social engineering. But social engineering attacks have evolved far beyond the...

Viking Global Investors, one of the largest US stock picking hedge funds, is imposing more restrictive redemption terms on some of its longtime clients, as it pushes deeper into venture capital and other difficult-to-value investments. Last month, Viking told investors who put money into its $5.2bn Viking Global Opportunities fund in 2015 that they will be allowed redemptions only every...

European Central Bank confirms website hack and data breach The European Central Bank (ECB), the central bank of the 19 European countries which have adopted the euro, has shut down a compromised website after it discovered that hackers had planted malware that stole information from newsletter subscribers. An ECB press release admits that subscribers to t...

From IR Magazine: In the latest impact of Mifid II coming to America, a major investigation concentrating on research for small issuers has been successfully instigated by US politicians, on the back of the US coming closer to the European regulation. The US lower House of Congress, the House of Representatives, has passed a bipartisan bill requiring the SEC to study the provision of in...

Amherst hires new CIO, moves investment office to Boston From Institutional Ivestor: Amherst College has appointed a Cambridge Associates managing director as the chief investment officer of its nearly $3 billion fund, the school announced Thursday. Letitia Johnson had been the endowment and foundation team lead at Cambridge since 2015. She will succeed current Amher...

Hedge funds dump oil as fragile calm settles on Mideast From Reuters: Hedge funds sold oil last week, reversing most of the purchases made the week before, as tensions in the Middle East reached a fragile equilibrium and prospect of armed conflict receded. Hedge fund and other money managers were net sellers of 65 million barrels of futures and options l...

Legendary investor Bill Miller is bringing his winning touch to the hedge fund business. The fund that he launched three years ago has gained 46% in the first half of this year, according to an investor document seen by Bloomberg. That's enough to make plenty of people in the hedge fund industry jealous. Miller, 69, has found success by following the same playbook he used during hi...

From Artemis: The U.S. Internal Revenue Service and Department of the Treasury has published a new set of proposed regulations relating to passive foreign investment companies (PFICs), which are relevant to many in insurance and reinsurance, but have particular relevance to certain ILS and hedge fund reinsurer strategies it seems. The updates to the proposed regulation of passive foreig...

U.S. market regulator issues guidance on custody of digital asset securities From Reuters: The U.S. Securities and Exchange Commission (SEC) on Monday issued a notice on broker-dealer custody of digital asset securities, amid industry requests for clarity on whether they can hold such assets under federal securities laws. The SEC's statement, issued i...

Platforms aim to take private equity giants to the masses From PE News: One evening last September, more than 100 high-net-worth investors, family offices and private market professionals crammed into an exclusive business members' club in London and heard the owners of a new company promise to "fundamentally change" the private equity industry....

Remiges Ventures sets sights on $150m for Fund II From Altassets: Pharmaceutical-focused early stage investment house Remiges Ventures is looking to raise up to $150m for its second fund. Remiges invests in early-stage companies involved with the discovery and development of pharmaceutical drugs, according to its website. Despite being based in the US, the firm also ...

Hedge fund Cheyne raises $1.12bn for stressed loan fund From FT: London-based hedge fund Cheyne Capital has raised €1bn ($1.12bn) for a new fund that will aim to profit from European banks selling down their loan portfolios to meet new accounting and regulatory standards. The Cheyne European Strategic Value Credit fund, run by Anthony Robertson, w...

Texas Teachers commits $1.6bn to 7 alternative funds From PIonline.com: Texas Teacher Retirement System, Austin, committed $1.6 billion in May to seven alternative investment strategies, all managed by existing money managers, a transaction report showed. The largest allocation - $800 million - was from the $145.4 billion fund's real assets portfolio ...

B. G., Opalesque Geneva for New Managers: US law firm Seward & Kissel has just published its Seed Transaction Deal Points study. The study shows that, in seed d...

Lioness Capital seeks to defy the odds as hedge funds struggle From Bloomberg: A one-time adviser to hedge funds is now getting in on the act, joining several women opening their own firms this year. Asli Ay is starting a hedge fund focused on political and policy-related events after a career of providing insights on how government actions can impact invest...

Hotshot active fund managers will soon have a way to play the ETF game From CNBC: ActiveShares, a product built by financial innovation firm Precidian Investments, received an SEC nod that its so-called nontransparent ETFs should be approved. A marked break from the norm, nontransparent ETFs would mask the underlying securities, a key hang-up that's kept active ...

From Bloomberg: BNP Paribas SA's closure of its proprietary-trading desk has triggered a hiring frenzy for the world's biggest hedge funds. Citadel has recruited Mathieu Gaveau, who was head of rates at BNP's Opera Trading Capital division until it was shut down in January. Paolo Nicolosi, a senior foreign-exchange trader at the unit, has joined Brevan Howard Asset Manage...

From Financial News: AQR Capital Management, one of the biggest quantitative fund managers, is undergoing a prolonged performance downturn that has led to investors withdrawing increasing amounts in 2019. The Connecticut-based firm, which manages both hedge funds and mainstream long-only funds, had a difficult 2018; fewer than half of its 41 mutual funds delivered positive returns in wh...

Laxman Pai, Opalesque Asia: Crypto criminals and fraudsters stole more than $1.2 bn through cryptocurrency thefts, scams, and fraud in the first quarter of 2019, a report revealed. Criminals stole more than $356m from exchanges and infrastructure during this period, according to a report by cryptocurrency security firm CipherTrace. Among these losses, exit scams-which ...

DE Shaw to revert to '3 and 30' model as cost pressures bite From FT: DE Shaw is ratcheting up the cost of its flagship $14bn hedge fund despite falling fees across the asset management industry, highlighting the still-ravenous demand enjoyed by top quantitative investment groups. The hedge fund industry has come under pressure to cut fees, aft...

Here's how much public pensions are in the hole by per U.S. resident From Value Walk: A lthough some government agencies have demonstrated a desire to deal with the pension crisis, the problem of unfunded liabilities continues to get worse year after year. A new report pegs U.S. public pensions' unfunded liabilities at nearly $6 trillion as of 2018. That amou...

From FT: Renaissance Technologies, one of the world's most influential and secretive hedge fund firms, has sharply cut back its use of strategies that bet on patterns in futures markets, a big sign of such strategies' waning popularity. US-based Renaissance, founded by former cold war codebreaker Jim Simons and with about $60bn in assets, reduced its use of such strategies in ...

Bailey McCann, Opalesque New York: Can automatic rebalancing end up doing investor portfolios more harm than good? A new study from Man Group suggests that automatic rebalancing can mean that investors sell out of profitable investments at exactly the wrong time. "Rebalancing is an active strategy that can actually end up making the impact of drawdowns on a portfolio worse...

B. G., Opalesque Geneva: The Cayman Islands' anti-money laundering (AML) requirements are still a bit up in the air, according to Bill Prew, CEO/founder at Indos Financial. Even though all open-ended, Cayman-domiciled hedge funds had to appoint three AML officers by September, there are still grey areas in such ...

Laxman Pai, Opalesque Asia: A survey found that 51% of real estate investors were considering investing in opportunity zone funds (OZFs) in 2019, while a further 12% are interested in the longer term. A less widely publicized part of the 2017 Tax Cuts and Jobs Act in the US was the creation of 8,700 "opportunity zones" - distressed areas in which capital gains tax on...

From Dadline: Showtime has filed a motion to dismiss the lawsuit filed against it, Billions creator Andrew Ross Sorkin and others by a Wall Street performance coach who claims to be the inspiration for a key character on the drama series. Denise Shull, who wrote the 2012 nonfiction book Market Mind Games, filed a copyright infringement suit in January claiming that the defendants "r...

Bailey McCann, Opalesque New York: Paris-based Tikehau Capital reported total AUM of over €22bn as of Dec. 31, 2018 - more than doubling its AUM within two years. The alternative asset manager focuses on private debt, real estate, private equity and liquid strategies. Tikehau, had set a goal of €21bn of asset under management by this point, but the firm says it was bolstered by ...

Indiana Public Retirement allocates $507m to 7 managers From PIonline.com: Indiana Public Retirement System, Indianapolis, announced commitments and investments totaling $507 million to nine alternative investment strategies run by seven managers from the system's $28.7 billion defined benefit plan. Investment officers of the fund, who have investment di...

From Value Walk: Lukasz Tomicki, the founder of Austin, TX-based LRT Capital, had a life-changing moment after he achieved a degree of success. This led him into the hedge fund business where his emerging strategy has outperformed the major stock and hedge fund indices, he told ValueWalk. How the fund outperforms "the markets" speaks to recognizing a long term trend in growing a "mo...

Royal London launches new Greetham fund From FT Adviser: Royal London's Multi Asset Strategies is the latest fund to be launched for Trevor Greetham and his eight-strong multi-asset team. It targets annualised total returns of cash, defined as the Sterling Overnight Index Average, plus 4 per cent over five-year rolling periods - aiming to capture marke...

B. G., Opalesque Geneva: Sani Jackson, London-based director at Optima Partners, a global regulatory compliance and risk management firm, warns UK-based fund managers of some (non-Brexit related) regulatory issues they cannot ignore this year. The UK FCA's ...

New hedge fund launches slowed 2019 From Business Insider: Becoming a hedge-fund manager in 2019 is harder than ever before. Increased costs for technology, data, and compliance staff, along with tougher regulatory standards, have made it more challenging to launch a fund without a strong pedigree or a big-name supporter. These pressures are coupled with continued d...

From Seeking Aplha: The ideal hedge fund portfolio would use leverage to take a variety of uncorrelated risks that all cancel each other out, leaving the fund with little to no net exposure. For example, if you could invest in enough items with no correlation to the business cycle, like earthquake bonds and reinsurance, your return increases linearly, but your risk only increases logarit...

Institutional investors plot large property allocations From FT: Institutional investors plan to make large allocations to property in 2019, taking them closer to their desired targets. At least €72.4bn of new capital is expected to flow into real estate this year, according to a survey of 144 institutional investors and 10 fund of fund managers, con...

Jeffrey Gundlach said that 2019 will mark the start of a period when bond markets must recon with the rising federal deficit. In his most passionate comments ever on this topic, he said the exploding national debt and liabilities involving pension funds, state and local government governments and Social Security have reached a stage that is "totally unthinkable." Gundlach is th...