This content is from: Portfolio
The Morning Brief: So Far, a Strong Start for Hedge Funds
The average hedge fund rose 3.2 percent in the first quarter, confirming the mostly strong results so far reported by major hedge funds, according to a new report from Lyxor’s Managed Account Platform Research team. It points out that equity-focused strategies and CTA funds benefited from quantitative easing in Europe and Japan. It also notes that European long-short equity funds were able to “limit volatility and caught the rally.” Trend followers benefited from QE and posted gains on long equity and bond positions. “Hedge fund returns were generated with low volatility, thanks to different alpha drivers over the quarter,” Lyxor adds. As for the second quarter, Lyxor says in its report: “We are confident that hedge funds will benefit from a more fragmented environment, after highly macro-driven markets” in the first quarter.
Meanwhile, BarclayHedge and TrimTabs Investment Research report investors poured in $7.2 billion in February, calling it the strongest inflows in the past six months. This is a reversal of January’s outflow of $11.2 billion. However, the two-month data works out to $4.1 billion in redemptions in the first two months of this year. This compares with inflows of $31.6 billion in the same period last year. And while hedge funds added $39.2 billion in the past 12 months, this is still down 57 percent from $91.4 billion in the previous 12-month period, according to a press release. Altogether, industry-wide assets rose slightly in February, to $2.49 trillion from $2.47 trillion the previous month, according to BarclayHedge’s estimate based on data from 3,600 funds.
Shares of Herbalife jumped 1.32 percent to close at $43.91. This is its highest closing price of the year and the highest since November 4. There was no significant news on Tuesday except that the multi-level marketer of nutrition products announced a one-year partnership with the Global Health Strategies Institute (GHSI) to help improve the nutrition of children in India. The stock is up 16 percent in the calendar year, which is adversely affecting the performance of William Ackman’s Pershing Square Capital Management, which has a high-profile short on the stock. The fund was up 3.5 percent in the first quarter, but only had one good month during that period.
Martin Hughes’ Tosca Opportunity fund rose 6.3 percent in the first quarter. It was boosted by increases in the consensus earnings forecast for Redrow, the U.K. homebuilder and Avanta Serviced Office Group, the London-based office and meeeting-room provider. Hughes once served as chairman of Tiger Management Europe. He deploys a private equity-style investment horizon and targets returns in public companies.
Man GLG has launched Man GLG European Mid-Cap Equity Alternative fund, a new UCITS compliant fund. The long-short fund will invest primarily in European securities with a market capitalization of roughly $740 million to nearly $15 billion. The fund will be managed by Moni Sternbach, who joined Man GLG from Cheyne Capital in January.