Bill Ackman Calls for the Fed to Start Raising Interest Rates ‘As Soon As Possible’ (CNBC)
Billionaire hedge fund manager Bill Ackman called Friday for the Federal Reserve to begin reining in the support it has provided for the U.S. economy during the pandemic. In separate tweets, the head of Pershing Square Holdings, with $13.1 billion under management, said the central bank should start turning off the monetary juice right away.
A Wrong-Way Bet on Bond Yields Triggered Rokos, Alphadyne Losses (Bloomberg)
A rapid convergence in key global bond yields is behind losses for some of the biggest macro hedge funds. Chris Rokos’s hedge fund has sunk 11% in October, in part because of wagers that the difference between short- and long-term U.K. and U.S. government bond yields would widen, according to people familiar with the matter. Instead, they’ve tightened. The market’s shift to expecting Bank of England rate hikes sooner caused most of the harm at Rokos Capital Management, the people said. The fund, down 20% for the year, is on track to post its worst annual loss ever.
Third Point Set to Play Long Game in Pressuring Shell (Reuters)
Oct 29 (Reuters) – When investors saw Daniel Loeb‘s Third Point LLC unveil a stake in Royal Dutch Shell (RDSa.L), some were quick to make the comparison to Exxon Mobil Corp (XOM.N), whose board was challenged this year by another hedge fund, Engine No. 1. Both oil majors have been under pressure to improve financial performance and accelerate their transition away from fossil fuels. Exxon saw three directors unseated when Engine No. 1 won a proxy contest in May.
New Quant Multi-Manager AFBI Secures Strategic Investment from New Holland Capital (Hedge Week)
AFBI, a new quantitative multi-manager platform led by former Tudor and Millennium portfolio manager Pierre-Yves Guillo, has secured an anchor investment from alternative investment seeder New Holland Capital. Established in May this year, AFBI looks to generate uncorrelated returns across a diverse set of liquid quant strategies, using alternative data, proprietary portfolio construction and robust risk management techniques.
Día De Muertos (Hedge Nordic)
(By Mark Dowding, CIO at BlueBay Asset Management) – A prominent hedge fund apparently suffered huge losses and capitulated from being long the front-end vs. short the long end. In the last week alone, money market yields across developed markets have moved to price in further multiple rate hikes over the next 24 months, including a noteworthy 200bps over in the next 12 months in New Zealand. At the same time, longer maturity bonds have fallen. The market has clearly been positioned on the wrong side of this trade, particularly in the UK.