Man Group, the world’s largest publicly-traded hedge fund firm, is in “excellent shape” at 2021’s midway point, CEO Luke Ellis said this week, after strong investment performances and renewed investor inflows sent pre-tax profits soaring and drove firm-wide assets to record levels.
Often considered a bellwether for the broader UK hedge fund industry, the London-based global asset management giant – which manages a range of quant and discretionary strategies – saw funds under management reach USD135 billion. This week’s H1 results statements also showed pre-tax profits reached USD280 million, comfortably vaulting last year’s annual total of USD179 million.
With Man’s coffers continuing to swell, and the industry drawing more investor capital on the back of its 10 per cent first half return, hedge funds are also attracting increasing numbers of ‘first-time’ allocators, according to bfinance.
The London-based investment consultant, which advises global institutional clients with a combined AUM of USD215 billion, believes allocators want to control or curb their equity exposures, but are shunning bonds due to inflationary fears and are instead opting for alternatives such as hedge funds.
Multi-strategy funds and all-weather products are piquing new entrants’ interest, since they offer diversified sources of returns compared with single strategy offerings such as event driven, long/short, or CTAs, said Toby Goodworth, Head of Risk & Diversifying Strategies at bfinance.
Cryptocurrencies meanwhile remain on a rollercoaster. Bitcoin spiked on Monday following reports that Amazon would begin accepting the coin as a payment method, later beating a retreat before rebounding again towards USD40,000 on Thursday.
Digital assets-focused manager Wave Financial – which runs a range of wealth and fund management functions – believes the prospects for the world’s foremost cryptocurrency remain bright, after the asset successfully weathered an “onslaught” of negative developments in recent months.
Elsewhere, as stock markets continued to trend upwards this week, the year-long reflation trade has left equities looking “extremely expensive” compared to bonds, according to Man Group, who noted the volume of short positions is now at its lowest level in around 15 years.
Finally, this week’s feature story explores how Altana Wealth, the multi-strategy hedge fund led by former Trafalgar Asset Managers co-founder Lee Robinson, is looking to capitalise on the rising costs of carbon credits within the EU.
Portfolio manager Callum Lee, who is running the newly-launched Altana Carbon Futures Opportunity (ACFO) strategy at the London- and Monaco-based firm, explains how the strategy, which utilises dynamic knockout options, can generate returns as the EU Carbon Emissions market seeks to effect “behavioural change” among participating member states and companies by pushing costs higher.
Hugh Leask
Editor, Hedgeweek