ExodusPoint: Schonfeld Staffers Underpaid (HFAlert.com)
ExodusPoint Capital is firing back at Schonfeld Strategic Advisors. ExodusPoint, which was sued by Schonfeld last year for poaching staff, has filed a counterclaim in which it boldly asserts that it will continue recruiting Schonfeld’s “systematically undercompensated employees.” “There is a great deal of interest and excitement in the industry about the prospect of working at ExodusPoint and apparently widespread unhappiness with Schonfeld, even at the senior level,” ExodusPoint said. The counterclaim, filed April 26, also challenges a provision in some of Schonfeld’s employment contracts that prohibits ex-employees from soliciting former colleagues for a period of five years. That’s an unreasonably long non-solicitation period, ExodusPoint argues.
Sachem Urges Eagle Materials to Spilt Core Businesses, Nominates Board Members (Reuters)
(Reuters) – New York-based hedge fund Sachem Head Capital Management on Wednesday urged Eagle Materials Inc to separate its cement and wallboard businesses and nominated two candidates to the company’s board. Sachem, which disclosed a 9 percent stake in Eagle Materials in March, said the diversion of Eagle’s cash to fund its expansion into oil and gas proppants has resulted in “substantial underperformance” in the company’s stock price.
Citadel Securities Looms Large as a Future Fed Primary Dealer (Bloomberg)
The bond market’s most elite club added a new member this week. Just not the one that’s loomed large over Wall Street for years. Amherst Pierpont Securities became the first firm in more than three years to be added to the list of U.S. primary dealers, a group that transacts directly with the Federal Reserve Bank of New York as it carries out monetary policy. The designation has long been considered a badge of honor, though the benefits have diminished in the post-crisis era as a small pool of banks dominate trading and dealers need not purchase large swaths of Treasury auctions. Primary dealers are required to bid for at least their pro rata share of the total amount of debt the U.S. issues.
Hedge Funds Positive Again in April After Robust First Quarter (HedgeWeek.com)
The Eurekahedge Hedge Fund Index was up 1.13 per cent in April, supported by the global equities which advanced on encouraging economic data and accommodative central bank policies. Positive earnings surprises helped renew investors’ optimism in the global equity market, which rallied 3.38 per cent during the month as represented by the MSCI ACWI (Local). Returns were positive across geographic mandates, with hedge fund managers focusing on North America leading the pack as they gained 1.37 per cent in April. Asian hedge funds trailed behind their peers focusing on other regions, but still managed to generate positive returns. Looking at strategic mandates, equity long-biased hedge fund managers were best positioned to benefit from the equity market performance during the month, and ended the month up 2.78 per cent.
Cannabis Hedge Fund Aims to Go Long U.S. Stocks, Short Canada (Bloomberg)
A pot-focused asset manager run by the chairman of Curaleaf Holdings Inc. is launching a new hedge fund with an eye to going long on U.S. cannabis companies and shorting Canadian producers. Measure 8 Venture Partners LP is aiming to raise $100 million for the hedge fund, which will go live on June 1, and is also in the midst of raising $200 million for a new venture fund. “I have a lot of respect for the Canadian LPs but I don’t want to be long them right now,” Justin Ort, a Measure 8 partner, said in an interview at Bloomberg’s Toronto office. “It’s almost like they have one hand tied behind their back” because of the country’s stringent marketing restrictions.
Will Hedge Funds Ever Truly Embrace ESG Principles? (Preqin.com)
Markets across the alternatives industry are abuzz with talk of ESG, none more so than hedge funds where the topic is far from clear cut. For some, considering ESG within the context of hedge funds may appear contradictory: hedge funds use a variety of instruments to generate an absolute return across a range of markets and asset classes, so why constrain these investments with ESG policies? Will the limitations outweigh the benefits? Preqin surveyed hedge fund managers and investors to gauge their opinion on ESG. We learned which LPs and GPs already have an ESG policy in place, which do not and which are aiming to implement one.
Ray Dalio’s Brutally Honest Tip: Amateur Investing Is Harder Than the Olympics (Observer.com)
Hedge fund billionaire Ray Dalio, one of the most worshiped investors of his time, is not shy when it comes to sharing his secrets of success and observations on the economy and financial markets with the world. As he wrote in his 2017 book, Principles, “I am now at the stage in my life in which I want to help others be successful rather than to be more successful myself.” In the past three months, Dalio has made two bold predictions about how likely the U.S. economy is due for a recession by 2020: He first estimated the chance to be 70 percent, but lowered the bet significantly to 35 percent only a few weeks later.