Even hedge fund giant William Ackman wasn’t immune from losses during the recent market turmoil. On Wednesday, Ackman told investors that his firm Pershing Square Capital Management had lost all of its gains for the year, according to the New York Times. Sinking shares at companies including Mondelez and Zoetis have affected Pershing Square’s portfolio, according to Ackman’s letter. Pershing’s losses come as Leon Cooperman’s Omega Partners, run by Omega Advisors, also lost about 11 percent as of the end of last week, and Ray Dalio’s Bridgewater Pure Alpha fund, from Bridgewater Associates, was down 4.7 percent for the month, according to the Times report.
Meanwhile the Wall Street Journal reports that high-profile activist and event-driven managers are bearing the brunt of the stock market’s wrath, with Nelson Peltz’s Trian Fund Management down 5.7 percent through Wednesday and Daniel Loeb’s Third Point down about 7 percent through the month as of early this week. David Einhorn’s Greenlight Capital is down by 5 percent this month alone through earlier this week, the paper reports. The fund was already down by 9 percent through July.
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Lee Ainslie’s Dallas-based Maverick Capital is planning to launch a quantitatively driven equity fund, according to a Bloomberg report citing a person with knowledge of the firm’s plans. The fund, to be called the Maverick Fundamental Quant Fund, will trade using algorithms that analyze hedge funds’ historical stock picks — gleaned from data sources such as regulatory filings — to predict how investments will perform. It will aim to hold 100 long positions and 100 short positions. The firm is looking to potentially make the product available to retail investors, according to the report. A Maverick spokesman declined to comment.
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Hedge funds have taken in $76 billion in net new money through the first half of the year, bringing the industry up to $3.22 trillion in assets globally, according to London-based data tracker Preqin. The most popular strategy so far this year is multistrategy, with 49 percent of these funds enjoying net inflows in the second quarter. On the other hand, CTAs faced $5 billion in outflows in the second quarter, versus $11 billion of inflows in the first quarter. The bulk of assets flowed to funds with more than $500 million in assets, with 60 percent of funds in this category getting inflows. Meanwhile, only 38 percent of funds with less than $100 million took in net new money, while 43 percent faced outflows. Interestingly, some 57 percent of hedge fund managers noticed increased investments from wealthy individuals and family offices in the first half of the year.
The inflows are noteworthy given that investors have expressed dissatisfaction with hedge fund performance for some time. “Despite recent Preqin research indicating that investors are growing impatient with the returns of hedge funds, the industry has continued to accumulate assets in the first half of the year,” said Amy Bensted, Preqin’s head of hedge fund products, in a statement.
Managers seem confident that the gravy train will continue. Preqin surveyed 190 hedge fund managers in June and found that 81 percent expect inflows throughout the rest of the year and expect total industry assets to increase in the second half of 2015.
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Carl Icahn has taken a stake of 88 million shares, or 8.5 percent, in Freeport-McMoRan, the famed investor announced after the stock market close on Thursday. This makes Icahn the largest shareholder in the mining company. The stock climbed 28 percent during regular trading but spiked another 20 percent in after-hours trading after Icahn revealed his stake. Icahn no longer manages hedge fund money but remains arguably the world's most closely-watched activist investor.
