Corporate upheaval and market uncertainty are potent propellants for hedge fund strategies, and 2021 is continuing to serve up a steady supply of both for managers across the board.
CIAM – the well-known London- and Paris-based activist manager founded by Catherine Berjal and Anne-Sophie d’Andlau – continues to circle French reinsurance firm SCOR. In the latest step in a long-running campaign addressing what it sees as “dysfunctional governance” at the reinsurer, CIAM is calling on SCOR shareholders to oust chairman Denis Kessler and associated board directors at this month’s AGM, and instead push for an overhaul in the way the company is led.
After hedge fund upstart Engine No. 1 recently shook oil behemoth ExxonMobil to its foundations, the continued advance by sustainability-focused shareholders pushing for greater ESG awareness within the energy sector is reverberating not only around boardrooms but across broader financial markets.
Westbeck Capital Management, the commodities and oil equities hedge fund which has taken double-digit gains from oil price shocks this year, believes the oncoming supply squeeze resulting from emissions cuts could send oil prices towards record levels – and is steadily building bets to capitalise on the potential spike.
Meanwhile, with price volatility still pulsating through cryptocurrencies, Russell Clark, the high-profile global equities contrarian, is raising questions over how bitcoin’s value is determined. Clark noted that the stock-to-flow model – a framework traditionally used for precious metals such as gold and platinum – can often come unstuck, and said that recent shifts in market behaviour may suggest liquidity is a bigger driver of bitcoin’s price movements.
Elsewhere, with markets galvanised on the back of reopening economies and higher inflation, Pierre de Saab, partner and head of asset management at Dominicé & Co Asset Management, believes that volatility is set to remain at elevated levels, with investors wary of a fresh market downturn following the sustained equities rally. As the economic recovery remains on a knife-edge, de Saab sees growing investment opportunities for Dominicé’s equity volatility and derivatives-focused flagship, Cassiopeia.
The longer-term post-pandemic recovery is also the focus of a new policy paper published this week by the Alternative Investment Management Association and the Alternative Credit Council. The industry trade bodies have set out a series of policy objectives – spanning regulation, tax, pensions and real economy financing – which put the alternative investment sector front and centre of the UK’s drive to boost growth and innovation as the country addresses the twin challenges of Covid and Brexit.