Billionaire Seth Klarman’s Baupost Returned less than 5% in 2020, Failing to Break Double-Digits Returns in What’s been Called the Best Year for Hedge Funds Since 2009 (Business Insider)
Billionaire Seth Klarman, the longtime head of $30 billion Baupost Group, made just under 5% in 2020. The firm lost money in March, when the coronavirus shut down the world and the stock market tanked. Klarman was critical of the Federal Reserve last year, and also made waves by placing big bets on SPACs like fellow billionaire hedge-fund investor Bill Ackman‘s Pershing Square Tontine Holdings.
Intel Ousts CEO Bob Swan (The Wall Street Journal)
Intel Corp. ousted Chief Executive Bob Swan in a surprise move after activist hedge fund Third Point LLC urged sweeping changes to revive the semiconductor giant’s fortunes. Intel on Wednesday said Mr. Swan would be replaced by VMware Inc. chief Pat Gelsinger effective Feb. 15. Mr. Gelsinger, who was once Intel’s technology chief, has served as CEO of the business-software provider since 2012.
Blackstone-Backed Antara Soars 59% on Technology, Lithium Bets (Bloomberg)
Antara Capital, a $1.2 billion hedge fund backed by Blackstone Group Inc., soared 59% in its flagship fund last year as wagers including loans to technology companies paid off. Returns for Antara, which was founded by former Man GLG distressed-credit head Himanshu Gulati, accelerated at the end of the year, according to a letter to investors seen by Bloomberg. The firm notched gains of about 17% and 12% in November and December, respectively. Distressed funds also made the bulk of their 11% gains for the year over those two months, according to Hedge Fund Research Inc.
Taiga Passes Toughest Test Yet (Hedge Nordic)
Stockholm (HedgeNordic) – Despite delivering an annualized return of 15.4 percent since 2008, the Oslo-based team running Taiga Fund has always emphasized the importance of downside protection rather than embracing a “maximum return at all costs” approach. The coronavirus-induced market volatility in March put Taiga Fund’s small-cap-oriented long-biased strategy to its toughest test yet. “We do not expect Taiga Fund to be immune to sharp equity market drawdowns,” the team at Taiga Fund wrote in a letter to investors after the first quarter. “Despite this, the fund has previously proven relatively resilient due to solid valuation support in the long book, some short exposure and no leverage,” the team led by Ola Wessel-Aas and Andreas Petterøe added.
SPAC Mania Gives Early Investors Steady Returns With Little Risk (The Wall Street Journal)
Sudden excitement about the flurry of startups going public through so-called blank-check companies is enriching some of the biggest players in finance, particularly hedge funds. The gains come through the unique rights given to early investors in special-purpose acquisition companies, or SPACs, which look to acquire promising startups and take them public. As the vehicles become more popular, the hedge funds that invest in them early on, such as Magnetar Capital, Glazer Capital and Israel Englander’s Millennium Management, can earn lofty returns without much risk.
Hedge Fund Managers Losing Millions as Order Delays Mount Up (Hedge Week)
An unprecedented number of delays when sending out orders to market is costing hedge fund managers USD20 million per year, according to new research from TradingScreen. A combination of operational inefficiencies and trade errors cause the majority of delays, while high costs associated with IT systems maintenance is also a significant contributor. The findings show that the most unprotected trade errors cost hedge funds anywhere between 3 and 10% of trade notional, which in some cases is USD5 million a year.