This content is from: Portfolio
The Morning Brief: Confirming that the Rich Get Richer
A new study from London-based Preqin confirms what we have been reporting in the Hedge Fund 100 for many years. The largest hedge funds account for the bulk of the industry’s assets. According to Preqin, the 570 managers with at least $1 billion under management account for just 11 percent of the total 5,122 single-manager hedge fund managers. However, these large managers account for 92 percent of the total $3.16 trillion in industry-wide assets as of the end of the first quarter. Managers with between $1 billion and $4.9 billion control a total of $892 billion in assets, or 28 percent of the entire industry total. This is not too surprising. In the just published 2015 Hedge Fund 100, Alpha reports that over the past two years the top 100 firms have grown assets by nearly 23 percent, more than half the industry-wide total. The 10 largest firms surged by 9 percent, to $414 billion, and account for more than 14 percent of industry-wide assets.
It was a bad day for Stephen Mandel, Jr.’s Lone Pine Capital. On Wednesday, shares of Michael Kors Holdings plunged more than 24 percent after the retailer and fashion company reported fourth-quarter earnings that came in below consensus forecasts and issued disappointing sales guidance for 2015. The Greenwich, Connecticut hedge fund manager was the largest shareholder of Michael Kors at the end of the first quarter, with 5.6 percent of the shares. It is also the firm’s 11th-largest holding. Another major holder is another Tiger Cub’s firm — Robert Citrone’s Discovery Capital Management.
Kenneth Griffin’s Citadel disclosed it owns nearly 2 million shares of Relypsa, or 4.7 percent of the total outstanding of the biopharmaceutical company. Since its position fell below 5 percent, the Chicago hedge fund firm no longer needs to report updates unless it moves to 5 percent again.