This content is from: Portfolio

The Morning Brief: D.E. Shaw Closes Funds to New Investment

D.E. Shaw has closed its three main hedge funds to new investors, the Financial Times reports. The New York City-based firm recently closed Composite, its flagship multistrategy fund, after barring new investors from Oculus and Heliant earlier this year. The firm was founded in 1998 by David Shaw, who was recently inducted into the Alpha Hedge Fund Hall of Fame. It uses mostly computer-driven methods to make its investments.

The total amount of capital in hedge funds increased by a net $40 billion in the second quarter, to a record $2.41 trillion, according to a new report from Chicago-based industry tracker Hedge Fund Research. Altogether, hedge funds saw $55.9 billion in new capital flow into their firms at the same time that $41.4 billion was redeemed, resulting in a net inflow of $14.5 billion. This was just slightly less than the first-quarter net inflow of $15.2 billion, according to HFR. The firm says 60 percent of all hedge funds took in net new money in the second quarter, while 40 percent experienced outflows.

Meanwhile, the firm’s HFRI Fund Weighted Composite Index rose 1.6 percent in September, the strongest monthly performance since January 2013 and the second best gain in the last 19 months. This brings the performance for the first three quarters to 5.58 percent. Among broad strategy groups, equity hedge strategies led the way, gaining 2.6 percent in September and 9.2 percent year-to-date.

John Paulson’s Paulson& Co. is bullish on Greece’s recapitalized banking sector, Reuters reports. The New York City hedge fund firm is excited that Greece’s exports are rising and tourism is coming back. He reportedly said in a statement: “We think Piraeus and Alpha, two banks we have a position in, are now very well capitalized and poised to recover. They have good management and we think the Greek economy is improving, which should benefit the banking sector.”

Lawrence Seidman, an activist investor who focuses on banks, boosted his stake in OBA Financial Services to 317 million shares, or 8.10 percent of the total outstanding. We reported last month that Seidman, the head of Parsippany, New Jersey-based hedge fund firm Seidman and Associates, fired off a letter to the board of directors calling for the sale of the Germantown, Maryland-based institution.

J.C. Penney’s stock was heavily marked down again on Monday. The shares fell another 1.9 percent, to close at $7.71.


FX Concepts, the once high-flying currency hedge fund founded by John Taylor, is shutting down several funds, Bloomberg reports. The New York-based firm made the decision after its flagship $619 million Global Currency Program lost 13.9 percent in the first eight months of the year, through the end of August. Its small FX Concepts Multi-Strategy Program dropped 10.96 percent through August. Taylor founded the firm in 1981 as an advisory firm specializing in quantitative currency forecasting and providing research to major corporate and bank treasuries actively managing currency risk. Since 1988, it has been managing currencies for institutional investors. Taylor made his only appearance on Alpha's Rich List when he made $250 million in 2008 after heavily betting that interest rates would go down, riding down the yield curve. At the time he managed $14.6 billion.

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