Billionaire Howard Marks Pitches A Defensive Investing Outlook (Forbes)
Given that many good companies lost between a quarter and half of their value amid the outbreak of the coronavirus pandemic in March, and their debt may now yield many multiples of a government bond, it’s no surprise to see investors lining up to buy the dip. Distressed debt investor Howard Marks and his firm’s hundreds of analysts and portfolio managers are sharpening their pencils on a shopping list of bargain buys, but the billionaire investor preaches a defensive approach to battered-down markets. In a new letter to clients, Marks says that the unknown unknowns of the pandemic and its impact on economy are so great investors should practice cautious investing. A recent rally last week, Marks says, seems to have reflected investors’ best case expectations for how quickly the health system can contain the spread of coronavirus and handle the sick, and for how fast the economy will rebound.
George Soros’ Cofounder Warns Coronavirus will Cause the ‘Worst Bear Market in My Lifetime’ (Business Insider)
US equity investors – who just weathered their worst quarter since the financial crisis – should brace for further losses from the novel coronavirus pandemic, famed investor Jim Rogers warned in a Bloomberg interview on Wednesday. “We’re going to have the worst bear market in my lifetime” in the next year or two, predicted 77-year-old Rogers, who cofounded the legendary Quantum Fund with billionaire investor George Soros. Coronavirus outbreaks in more than 170 countries and territories have disrupted global supply chains, forced companies to cut back or close, and spurred governments to lock down their populations to slow the pandemic’s spread.
Renaissance Technologies Hedge Fund Takes 17 percent Hit Due to Coronavirus (New York Post)
The hedge fund empire founded by billionaire Jim Simons has taken a bit of a beating as the coronavirus pandemic rattles stocks, The Post has learned. As of Friday, two funds run by Simons’ Renaissance Technologies hedge fund firm posted double-digit losses for the year, sources said. The Renaissance Institutional Equities Fund was down 17 percent as of Friday – compared to a 24 percent drop in the Dow Jones industrial average – while the Renaissance Institutional Diversified Alpha lost 13 percent in the same period, sources said.
No Intention of Swimming Naked (Hedge Nordic)
Stockholm (HedgeNordic) – Warren Buffett once said that “it’s only when the tide goes out that you discover who’s been swimming naked.” Stefan Åsbrink, who partnered with Coeli Asset Management to launch Coeli Multi Asset, has no intention of “swimming naked.” Launched at the end of 2019, the long/short equity fund that can hedge out risk with a wide range of hedging tools and techniques across various asset classes. “Coeli Multi Asset is a global long/short equity fund with an extra feature of global tactical asset allocation,” explains Åsbrink. This feature represents “a top-down approach to hedge out risk when required and also exploit short-term mispricing in various asset classes.” A long/short equity strategy is an effective way to build wealth over time, reckons Åsbrink. “If you add some hedging capabilities and other strategies that can generate uncorrelated alpha, then you get an excellent combination.”
Managers Who Warned Against Dip Buying Surge: Hedge Fund Update (Bloomberg)
The $3 trillion hedge fund industry is under pressure amid market turmoil prompted by the spread of the coronavirus. A wide dispersion of gains and losses is expected to emerge as firms disclose their returns for March. Below are some of the winners and losers. Key Developments: Funds managed by Diego Parrilla and Said Haidar surged in March. Dmitry Balyasny’s $6 billion firm gained 3.7% in March. Equity-focused hedge fund giants Viking and Coatue fall in March. Carrhae, Pinpoint, Kuvari defy rout; Sylebra loses in month. Einhorn’s funds fall 12% in March with market plunge taking toll.
How a Massive New York hospital Secured 130,000 N95 Masks from China with Help from a Senior Partner at Goldman Sachs, Private Jets, and a Call to Warren Buffett (Business Insider)
Mount Sinai Health Systems was able to procure 500,00 N95 masks and 1.2 million surgical masks from a hospital in China that had access to the domestic market for medical supplies. But the health system couldn’t get the supplies out of China because of travel restrictions and limited availability of cargo space. Richard Friedman, co-chairman of Mount Sinai and a partner at Goldman Sachs, chartered two Bombardier Global 6000s from NetJets to pick up the supplies. The arrangement started with a call from Goldman CEO David Solomon to Warren Buffett, whose Berkshire Hathaway owns NetJets. The two planes brought back 130,000 N95 masks for Mount Sinai, landing at at New Jersey’s Teterboro airport in the middle of the night last week.
Hazeltree and HedgeLegal Collaborate on Comprehensive UMR Guide (Hedge Week)
Hazeltree, a provider of integrated treasury management and portfolio finance solutions, and HedgeLegal, a specialist in trading document negotiation for the buy side, have published “Clearing up the Uncleared Margin Rules: A Comprehensive Guide for Hedge Fund and Asset Managers.” The guide is intended to assist hedge funds and asset managers in gaining a better understanding of their obligations under Phases 5 and 6 of the Uncleared Margin Rules (UMR or Rules). While ISDA and other trade associations have asked for a delay in the onset of UMR amidst the COVID-19 pandemic, there has been no sign (as of yet) that global regulators are inclined to allow any such delay. This implies that over the next 18 months, more funds will become subject to the Rules – and it is now critical for every manager to assess whether their funds will be impacted.
‘After an Earthquake There are Tremors’: Billionaire Investor Urges Caution (The Sydney Morning Herald)
Billionaire trader Steven Cohen is cautioning the staff of his investment firm, Point72 Asset Management, to remain cautious amid markets that have recovered slightly from coronavirus-driven lows. “Markets don’t come back in a straight line; after an earthquake there are tremors,” Cohen wrote to staff on Friday (US time) in an internal memo seen by Reuters. “We need to continue to be disciplined. We are seeing plenty of opportunities to generate returns, but I don’t want us taking undue risks.”