HFs Running Value-Oriented and RV Strategies to Shine (HedgeNordic.com)
Stockholm (HedgeNordic) – J.P. Morgan Asset Management has released a report presenting outlooks for all major alternative asset classes, including hedge funds. The inaugural Global Alternatives Outlook 2019 aims to guide investment decision-making in a year characterized by transition and change, as markets are adjusting to monetary tightening, equity markets are becoming more volatile, and uncertainties over trade wars and tariffs are lingering.
We Got a Copy of Billionaire Hedge Fund Manager Seth Klarman’s Letter to Investors — Here are His 5 Biggest Warnings (Business Insider)
Similar to his billionaire hedge fund counterpart Ray Dalio, Baupost Group CEO Seth Klarman is concerned about an incoming financial crisis as well as political and social tension in the US. In his annual letter to investors this week which was viewed by Business Insider, Klarman laid out his biggest concerns about the economy, democracy and society, as the one-time mega-donor to the GOP has been outspoken against President Donald Trump. For the year, the $32 billion hedge fund returned between “roughly breakeven and a decline of less than one percent,” the letter said.
Money Stuff: Losing Money Reduces the Risk of Too Much Money (Bloomberg)
Greenlight: I slave away all day writing sentences on the internet. David Einhorn, meanwhile, works full time (except for a midday nap and some poker vacations) at his job of managing a multibillion-dollar hedge fund, which may lack some of the spiritual rewards of writing sentences on the internet but which definitely pays better. So it is particularly painful for me to realize that I’ll never write a sentence as good as this throwaway line that David Einhorn put in an investor letter.
Marble Arch Shutdown Spawns Startups (Hedge Fund Alert)
At least four executives from the now-shuttered Marble Arch Investments are starting their own hedge funds. Marble Arch co-founder Timothy Jenkins is aiming for the second quarter to open a management shop whose staff also would include former partner Joseph Talia. Sources said the new operation’s strategy would deviate slightly from Marble Arch, which made value-oriented stock selections worldwide. Meanwhile, Michael Bilger, who had been a partner at Marble Arch, is forming a New York firm called 59 North Capital that will take a long/short equity approach. He has five employees so far, including at least three who spent time at Marble Arch.
Fund Managers and Allocators: Assessing Risk in an Aging Bull Market (Hedge Connection)
Introduction: Fund Managers and Asset Allocators are challenged with viewing risk from two, but not necessarily opposite, perspectives. Asset owners are tasked with keeping funding promises to beneficiaries over long-periods of time. Years of depressed interest rates have made achieving the allocators’ return targets much more difficult. Fund managers seek to deliver attractive risk/reward performance and compete to raise and retain assets. While both the fund managers and asset allocators have strong incentives to balance risk and reward, the stakes of this delicate dance can become more challenging at the tail end of an old bull market that is exhibiting rising volatility.
Harding’s Quant Hedge Fund Sees Assets Plummet by $5 Billion (Bloomberg)
(Bloomberg) — Assets at David Harding’s quantitative investment firm plunged by about $5 billion last year as it shifted strategy and investors lost patience with computer-driven hedge funds. The money managed by Winton Group slumped to $23.6 billion at the end of 2018, with its flagship fund losing 0.6 percent, according to investor letters seen by Bloomberg. A spokesman for the London-based firm declined to comment.
Hedge Funds Suffer Losses of 2.27% in December 2018 (Preqin)
Hedge funds faced another tough month in December 2018, with losses increasing: the Preqin All-Strategies Hedge Fund benchmark returned -2.27%, bringing the 2018 full-year losses to 3.42%, the first negative year since 2011. Macro strategies hedge funds returned +0.39% in December, helping to recover losses made in November (-0.79%) and bringing the 2018 return to +0.97%, making this the only top-level strategy tracked by Preqin to generate a positive return for December. Notably, returns for both equity and event driven strategies fell sharply, returning -3.17% and -4.22% in December respectively.
The Hedge Fund Manager Who Just Paid $238 Million for a Manhattan Penthouse (The New York Times)
Kenneth Griffin, the billionaire founder of the hedge fund Citadel, broke a real estate record on Wednesday when he closed on his purchase of a penthouse at 220 Central Park South for $238 million. It’s the highest price anyone has paid for a home in the United States, and $100 million above the previous record. Mr. Griffin went to contract on the apartment, in a building that was still being developed, in 2015 amid a real estate buying spree that includes a London mansion he bought this week for 95 million pounds, or about $122 million. Here’s what we know about him.