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The Morning Brief: Citadel Cuts Investment Staff
Citadel had a triumphant 2015, but this year has gotten off to a much rockier start for the firm. The flagship multistrategy fund managed by Ken Griffin’s Chicago firm was down 6.5 percent through the second week of February, and the firm announced plans to lay off more than a dozen members of the investment team that works for its Surveyor Capital arm. The news was first reported in the Wall Street Journal. Last month the firm replaced Jon Venetos, the head of Surveyor Capital, with with Todd Barker, longtime Citadel employee and former co-head of global equities. Citadel’s flagship Kensington and Wellington funds returned 14.3 percent last year, their fifth consecutive year of double-digit gains. The firm now manages $25 billion.
Hedge funds love to talk about being contrarians. Apparently a lot of them actually lived up to that billing in the fourth quarter of last year, according to a new report from S&P Global Market Intelligence. The report found that while the energy sector was tanking last quarter, it was the most-bought sector by what the firm calls pure-play hedge funds, according to its analysis of 13F filings. The funds picked up $1.5 billion in energy sector stocks during the quarter.
Hedge funds dumped more stocks in the financials sector than any other, for a total of $2.2 billion in net sales during the quarter. The top-five hedge fund buys during the quarter were American International Group ($2.5 billion), The Priceline Group ($1.6 billion), Valeant Pharmaceuticals ($1.3 billion), Teva Pharmaceuticals ($1.3 billion) and Apple ($1.2 billion). The five most sold stocks were Allergan ($2.1 billion), Next Plc ($1 billion), Walgreens Boots Alliance ($975 million), Lloyds Banking Group ($903 million) and Halliburton Co. ($898 million), according to the report.
Fund-of-funds firm K2 Advisors, a subsidiary of asset management giant Franklin Templeton Investments, announced it has hired Tim Everett, who was previously a portfolio manager at UBS O’Connor. At K2, Everett will be responsible for communicating the firm’s investment philosophy, process and strategy to current and prospective clients of the firm. He will report to founding managing director David Saunders.
UBS upped its price target on hedge fund favorite Priceline Group, from $1,490 to $1,525. The investment bank maintained its buy rating on the stock, which closed at $1251.95 on Thursday. Top hedge fund holders as of the most recent quarter included Adage Capital Management, Appaloosa Management, Lone Pine Capital and White Elm Capital.