This content is from: Portfolio

The Morning Brief: Investors Renew Love Affair With Hedge Funds

For the first time since the third quarter of 2015, investors put more money into hedge funds than they redeemed during the second quarter.

  • By Stephen Taub

Investors are warming up to hedge funds again. Total hedge fund capital rose by $34.1 billion in the second quarter, to $3.1 trillion, according to a new report from data tracker HFR. This is the fourth straight quarter that total capital rose. More significantly, this is the first quarter that allocations exceeded redemptions since the third quarter of 2015. Net inflows in the June period came in at $6.7 billion. In the first quarter of 2017 there were net outflows of $5.5 billion. Year-to-date there has been $1.2 billion in net inflows, according to HFR.

HFR points out that second-quarter asset flows were led by quantitative, trend-following global macro strategies, which historically have experienced low correlation to equity markets and other hedge fund strategies.

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Corvex Management boosted its stake in Energen Corporation to 8.8 percent. In a regulatory filing, the activist hedge fund firm headed by Keith Meister said it intends to review its investment in the oil and gas exploration and production company but implied it had no specific plans for the company at this time. However, it used boiler-plate language to warn of some sort of future undefined action.

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Point72 Asset Management disclosed it owns nearly 3.5 million shares of Red Rock Resorts, or 5.1 percent of the gaming company. At the end of the first quarter, Steven Cohen’s family office owned about 108,000 shares plus put options on the stock.

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Viking Global Investors participated in the $223 million financing of Vets First Choice, a provider of technology-driven healthcare services for veterinary medicine.

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