A new Preqin study concludes what we already know: discretionary hedge funds, in which humans make the investment decisions, have outperformed systematic hedge funds — in other words, the computer driven ones. Preqin found that over a five-year period ending May 31, the humans posted 11.56 percent annualized gains compared with 7.85 percent for the so-called black boxes. However, the London-based alternative investments data company stresses that the systematic funds enjoyed lower volatility than discretionary hedge funds over this period —3 percent to 5 percent, compared with 6 percent to 11 percent for the discretionary funds. This downside protection best came into play in 2008, when systematic funds lost 0.03 percent, and 2011, when they rose 1.81 percent, compared with discretionary funds, which lost 18.65 percent in 2008 and 2.83 percent in 2011. Drilling further down, over the past three years, relative value and macro strategies deploying the systematic approach outperformed their counterparts using the discretionary approach.
Former Goldman Sachs currency trader Steven Cho plans to launch a new macro hedge fund, New York-based Kings Peak Asset Management, according to Bloomberg. Cho had spent 18 years at Goldman, most recently as global head of spot and forward trading of G-10 currencies. He left the firm in April.
Macro funds make judgments on the economy by investing in a wide range of markets, including stocks, bonds and currencies. So far this year many of the most high profile macro funds have lost money. As we earlier reported, through June 10, Andrew Law’s New York-based Caxton Global Investments fund had declined 4.9 percent. Through June 6, Paul Tudor Jones II’s Greenwich, Connecticut-based Tudor BVI fund was down 4.02 percent for the year. Robert Citrone’s Norwalk, Connecticut–based Discovery Global Macro Fund was off by 11.91 percent over the same period, while his Discovery Global Opportunity Fund declined by 7.51 percent. Through May 31, Louis Bacon’s New York-based Moore Global Investment Fund had fallen by nearly 5 percent.
R Baby Foundation is holding its biennial benefit concert, Rockin’ to Save Babies’ Lives, on July 23 at the Hammerstein Ballroom in New York. Founded by Marathon Asset Management’s COO and Partner Andrew Rabinowitz and his wife in 2006 following the tragic loss of their infant daughter, the R Baby foundation seeks to raise money and awareness to improve medical care for infants. R Baby points out that medical professionals often misunderstand and misdiagnose viral infections and other infectious diseases in infants, especially newborns, leading to severe complications and death. Among the performers at the foundation’s benefit concert are A Great Big World, Ryan Star, Mary Lambert and DJ Cassidy. Tickets are available now on the R Baby website.
Avenue Capital Group co-founder Marc Lasry seems to be enjoying his new celebrity status in Milwaukee ever since he teamed up with Wes Edens to purchase the Milwaukee Bucks basketball team. On Monday night he threw out the first pitch before the Milwaukee Brewers’ home game.
Omega Advisors founder Leon Cooperman raised his passive stake in dELiA’s to 8.5 million shares, or 11.42 percent of the total outstanding of the embattled retailer marketed to teen girls.