As some developed economies cautiously unlock amid falling Covid cases and vaccine roll-outs, the hedge fund industry continues to keep a close eye on how the recalibrated investment kaleidoscope’s pieces are falling into place.
K2 Advisors, the hedge fund investing unit of Franklin Templeton, said this week that hedge fund strategies are set to offer allocators a crucial diversifier in investment portfolios, as the expected economic rebound potentially drives inflation and interest rates higher, upending certain fixed income assets in the process. K2 suggested the low equity sensitivity characteristics of a multi-strategy hedge fund portfolio could aid a balanced portfolio of stocks and bonds in combating inflation and preserving capital.
On a similar theme, Algebris Investments, the long-running multi-strategy and credit hedge fund founded by Davide Serra, is eyeing convertible bonds and certain cyclical credits amid concerns that broader credit assets are set for a multi-pronged clobbering from rising inflation, negative yields and increased government intervention.
At the other end of the credit spectrum, the Alternative Credit Council – the private credit affiliate of hedge fund industry trade group AIMA – this week unveiled its Investor Manager Committee, a new initiative focused on the burgeoning private credit market. The new grouping will look to strengthen private credit market data collection and analysis, and bolster understanding of the way private credit strategies are evolving, with its inaugural efforts centred around the ESG push.
The cryptocurrency juggernaut maintains its formidable momentum, with Argentium Digital Asset Management, a newly-launched crypto hedge fund co-run by ex-JP Morgan and Credit Suisse manager Paul Frost-Smith, preparing to roll out a systematic multi-strategy arbitrage fund. The Argentium Chimera Fund brings together three investment strategies borrowed from foreign exchange investing which will aim to effectively tackle cryptocurrencies’ higher volatility and lower liquidity.
With Archegos Capital Management this week filing for insolvency, Hedgeweek’s editor-in-chief James Williams sifts through the wreckage of Bill Hwang’s fallen family office in a deep-dive analysis. His in-depth examination explores how the firm’s hefty leverage and concentrated positioning wreaked havoc on prime brokers’ books, and considers what lessons hedge funds can learn from misapplied gearing.
This week’s feature story profiles Four Seasons Asia Investment, a Singapore-based, Japan-focused fund manager led by husband-and-wife team Shigeka Koda and Kahori Ando. Since 2006, the boutique stock-picking specialist has sought to capitalise on fundamental shifts across governance, technology and demographics in Japan which it sees as alpha catalysts in the country’s equities sector.