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CRYPTOCURRENCY
When bitcoin hit an all-time high of some USD20,000 earlier this month, it rounded off a remarkable year for the world’s leading cryptocurrency – and fully underlined the arrival of the once-niche asset class on a rapidly-growing number of hedge fund firms’ radars.
ALTERNATIVE INVESTMENTS
As global investment markets became more efficient and persistent low interest rates saw returns dry up, institutional investors have been turning to alternative assets in their efforts to generate performance. Since traditional hedge fund investments have often not fully lived up to their promises in the past decade, managers in the space are looking to offer access to other alternative assets, such as private capital, in their attempts to fulfil investors’ needs.
PRIVATE CREDIT
Private credit managers are on track to provide some USD100 billion of real economy financing this year, as investors increasingly turned to the sector as a resilient portfolio hedge and diversifier amid equity market ruptures during 2020’s coronavirus pandemic.
New research published by the Alternative Credit Council suggests the private credit market has weathered the economic shock brought about by Covid-19, with fund managers now increasingly bullish about the sector’s prospects next year.
The sixth annual ‘Financing the Economy’ report – published jointly by the ACC, the private credit affiliate of the Alternative Investment Management Association, and Allen & Overy
Coronavirus
The largest capital introduction event in history has gone live today (15 June) with the launch of Funds4Food, a two-week network of virtual one-on-one meetings between alternative asset managers and leading allocators that is raising funds to aid relief efforts for victims of Covid-19.
Orchestrated by iConnections, the new Pennsylvania-based networking and software solutions business launched in April by ex-Context Summits founder Ron Biscardi, the online fundraiser is facilitating a round-the-clock series of private cap intro video-conference meetings until 2 July – with all proceeds from event registrations going to charities focused on Covid-19 hunger relief.
Over USD1.6 million has
SURVEY
Most hedge fund industry employees have been working remotely during the coronavirus pandemic, but now firms are split over when staff should return to work and when businesses can resume face-to-face contact with investors and other clients, a new study by the Alternative Investment Management Association has found.
The survey data suggests firms with smaller headcounts are more confident on resuming client contact and overseas travel later this year.
But firms with larger staff numbers do not expect to return to normal until 2021, suggesting they face bigger practical challenges in ensuring social distancing among employees.
AIMA, the trade body
MANAGER INSIGHTS
Alpha Blue Ocean, the London-based alternative credit investor, is eyeing growing funding opportunities arising out of the sharp economic downturn following the coronavirus outbreak.
The firm focuses mainly on the healthcare, energy and technology sectors, targeting typically smaller and medium firms forced to innovate to create growth to sustain themselves, rather than major well-established companies at the top of their curve, said CEO and co-founder Pierre Vannineuse.
The EUR300 million manager’s novel convertible bond-focused investment model provides financing for small and dynamic start-up companies unable to access traditional bank lending, or preferring a less dilutive alternative to straight equity when
MANAGER INSIGHTS
Cocktail parties, oil markets, and why China resembles Bismarck’s Germany as it continues to exert its economic influence – in conversation with Massar Capital’s Marwan Younes…
PERFORMANCE
Managed futures strategies experienced an entire year’s worth of performance dispersion during a dramatic first three months of 2020, with trend-following hedge funds’ returns hinging as much on luck as skill, a new deep-dive analysis by multi-manager CTA portfolio investment firm Efficient Capital Management shows.
CTAs, particularly those trading short-term trends, were widely hailed for their strong returns during the coronavirus-driven sell-off earlier in the year, when other hedge fund strategy types suffered agonising losses.
But the sector was marked by a wide dispersion in returns, Efficient Capital Management, the Chicago-based managed futures specialist, noted in a webinar on Wednesday.
COMMENT
This year’s Covid-19 stock market upheaval has revealed an “Achilles’ heel” in quantitative hedge fund models that use traditional factors such as momentum and value, as machine-based strategies have struggled against “unique new drivers of stock returns that don’t fit the academic models”, says Man FRM.
2020 proved to be a “blow to the head” for factor-based quantitative equity analysis, Man FRM observed in its ‘Early View’ commentary on Wednesday.
Quant equity hedge funds which trade traditional factors have struggled amid the dominance of a new “Covid factor” this year, with “near-consistent disappointment” in the form of “losses at the
HEDGEWEEK LIVE EUROPE
In an in-depth conversation with Hedgeweek’s editor-in-chief James Williams during last week’s Hedgeweek LIVE Europe summit, Charlotte Thorne, founding partner and co-chair of Capital Generation Partners, discussed how diversity and inclusion are reshaping the hedge fund industry, and explored some of the challenges and opportunities for firms arising from this growing trend.
