The Morning Brief: Citadel Funds Rise in February
Kenneth Griffin’s Citadel added to its gains in February. The Chicago–based hedge fund firm’s flagship multistrategy funds, Kensington and Wellington, gained 2.2 percent last month and are up 5 percent for the first two months of the year. All of the funds’ sub-strategies were said to be profitable last month, but were especially led by fundamental equities and fixed income, followed by commodities and credit. Citadel’s Global Equities fund rose 1.24 percent last month and is up 5 percent for the year, while the Citadel Tactical Trading fund climbed 1.55 percent in February and is up 4.85 percent for the year. Firm-wide assets under management stood at $25.5 billion at the end of February.
Separately, Citadel disclosed in a regulatory filing that it owns nearly two million shares of Green Plains, or 5.3 percent of the total outstanding. The hedge fund firm owned about 1.43 million shares of the ethanol producer at year-end, according to filings. Citadel also disclosed that it owns roughly 6.9 million shares, or 5.1 percent, of Servicemaster Global Holdings, a provider of a variety of residential and commercial services, including pest control, disaster restoration, janitorial services, residential cleaning and furniture repair.
Daniel Och’s main multistrategy fund, OZ Master Fund, rose nearly 2 percent last month and is up 2.68 percent for the year, according to a regulatory filing by the fund’s publicly traded parent firm, New York-based Och-Ziff Capital Management Group. The firm’s OZ Asia Master Fund rose 0.58 percent last month and is up 2.55 percent for the year, while its OZ Europe Master Fund jumped 1.69 percent in February and is up 3.31 percent for the year. The firm also reported that assets under management now stand at $47.9 billion, a net increase of $1.2 billion in the past month.
Bank specialist Lawrence Seidman disclosed his newest activist position. The Parsippany, New Jersey-based founder of hedge fund firm Seidman & Associates said in a regulatory filing that he owns 5.72 percent of Sussex Bancorp, a financial services company that operates 10 bank branch offices, mostly in New Jersey, as well as several regional loan offices. In the filing, Seidman says he has had one meeting and several telephone calls with Anthony Labozzetta, the company’s president and CEO. Seidman says in the filing that if Sussex successfully executes its business plan, earnings should increase along with the stock’s price. The filing also states that Seidman supports the company’s stock repurchase program to buy up to 5 percent of the outstanding shares, announced on February 26. This is Seidman’s fifth new publicly disclosed activist campaign against a small banking company in the past 10 months.
Institutional investors expect hedge fund industry assets to grow by 7 percent this year, according to Deutsche Bank’s annual Alternative Investment Survey. In the latest among a rash of surveys released by major investment banks, Deutsche found that 39 percent of 435 hedge fund investors representing over $1.8 trillion in hedge fund assets under management plan to increase their allocation to hedge funds in 2015. The survey also re-confirmed the recent trend among investors to pile into the largest hedge fund fir—ms — those with more than $5 billion under management. Deutsche estimates that fewer than 200 firms account for more than two-thirds of industry-wide assets.
UBS Tuesday raised its price target on hedge fund favorite Google from $630 to $670. “Google is much better positioned than many investors expect,” UBS writes in a note that is an excerpt of a new 70-page report. UBS acknowledges that over the past few months, investors have become more concerned about Google’s positioning in the worlds of digital advertising and mobile computing in light of the rise of companies such as Apple and Facebook.