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The Morning Brief: Losses Continue for Emerging Markets Funds

Emerging markets hedge funds posted a 5.4 percent loss in January, based on the performance of the HFRI Emerging Markets Index. This follows a 3.2 percent loss posted by the index last year, despite a 2.2 percent gain in the fourth quarter. The HFRI EM: China Index fell 10 percent in January after gaining 6 percent last year. Little surprise, then, that total capital in emerging markets hedge funds fell by $8.5 billion in January to $182 billion after increasing by $7.5 billion last year.

Chicago-based HFR, which publishes the index, cites concerns about slowing growth, the weakening Chinese currency, declining energy prices and geopolitical risk for the performance troubles. Total emerging markets hedge fund capital fell by $8.5 billion in January to $182 billion, wiping out last year’s asset growth of $7.5 billion.


It just goes from bad to worse for William Ackman’s Pershing Square Capital Management. The New York hedge fund manager extended his fund’s loss for the year to 17.3 percent through February 23. This comes after the hedge fund lost 20.5 percent in 2015.


Prosecutors in South Korea are investigating Elliott Management Corp. for possibly violating disclosure rules when it acquired a 7.1 percent stake last year in Samsung C&T Corp., which is considered Samsung’s holding company, according to theWall Street Journal. The New York firm headed by Paul Singer is being investigated for possibly violating a rule that requires investors to disclose their holding once it exceeds 5 percent, according to the report. At the time, Elliott said it opposed Samsung C&T’s planned merger with Samsung affiliate Cheil Industries. The $8 billion deal was announced in May and closed in September. Elliott was hoping to prevent the family of Chairman Lee Kun-hee access to key Samsung assets for less than what they were worth, according to the report.


The Oklahoma Firefighters Pension & Retirement System is redeeming its $75 million investment with low-volatility hedge fund-of-funds manager Private Advisors, according to The decision was based on “the diversification moves the system has made over the last several years, growing liquidity needs and performance concerns,” stated Troy Brown, director of consulting at The Bogdahn Group, the investment consultant to the $2.2 billion pension fund, in an e-mail.

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