This content is from: Portfolio

Morning Brief: Hedge Funds Take Bearish View of Asset Flows

More than a third of hedge fund managers say investor sentiment is more negative now than a year ago, Preqin found.

So much for strong stock performance and fund flows. Hedge fund managers are somewhat bearish looking out into the future. According to a survey from alternative investment data provider Preqin, 69 percent of hedge fund managers expect net asset flows will be flat or negative in the second half of the year. The survey, released this week, shows that 43 percent see the flows remaining the same.

The predictions come as more than one third of hedge fund managers believe that investor sentiment is more negative now than a year ago. This is somewhat surprising as Preqin also found that just 30 percent of hedge fund managers believe the fundraising environment is more challenging than it was a year ago while in June 2016 nearly half reported that fundraising had become more difficult. Plus, two-thirds of fund managers said they have met or exceeded their funds’ return objectives over the 12-month period ended in June 2017, compared with only half who reported this one year ago.

“Despite an improved returns environment and positive asset flows indicating investor concerns may be declining, fund managers reported that investors remain largely negative in their attitudes towards hedge funds,” Preqin said in the report. “Overcoming investor concerns around hedge funds is one of the leading challenges fund managers reported.” The big reason is fees. Preqin said investors’ demand for more favorable fees is the top driver of change in the hedge fund industry.

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Blue Harbour Group sold more than 700,000 shares of WebMD Health Corp. between July 24 and August 22 for around $66 per share, reducing its stake to 7.13 percent, according to a regulatory filing. In late July KKR & Co. agreed to buy the online health publisher for $2.8 billion.

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Perceptive Advisors disclosed in a regulatory filing that as of July 17 it cut its stake in AcelRx Pharmaceuticals by nearly two-thirds, to a little more than 1.24 million shares. As a result, it now owns 2.7 percent of the specialty pharmaceutical company.

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Third Point Ventures participated in the $14.1 million Series C-1 financing of Channel Medsystems, a developer of a physician office-based therapy for heavy menstrual bleeding, according to a company statement. This is at least the second investment made in the company by the venture capital arm of Dan Loeb’s Third Point.

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