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MANAGER INSIGHTS
For Dixon Boardman, the CEO and founder of Optima Asset Management and renowned fund-of-hedge funds pioneer, the dramatic turbulence that shocked markets earlier this year is unlike anything ever seen during his three decades-plus of investing.
Boardman – an industry trailblazer who launched Optima back in 1988 – believes the spiralling Q1 drop was more sudden and swift than even the epochal Wall Street Crash of 1929, while the sharp rebound that sent stocks soaring despite the ongoing coronavirus crisis was almost as remarkable.
“There’s never been anything like what happened in March,” says the industry veteran, reflecting on the 2020
Regulation
Asset managers and investment funds have largely remained “operationally resilient” during the coronavirus crisis, but depressed asset volumes along with closer scrutiny of leverage and short-selling remain key issues for the sector during the ongoing pandemic, according to a new KPMG study into regulatory scrutiny of the industry.
The tenth edition of KPMG’s Evolving Asset Management Regulation series – titled ‘Supporting Growth and Ensuring Care’ – took the temperature of the global fund management regulatory agenda.
It examined an assortment of regulatory issues looming large over the asset management sector – including the ways in which liquidity and leverage are measured and
PERFORMANCE
Hedge fund assets have risen sharply in the past three months, as strategy performance recovers and investors scramble to capitalise on opportunities emerging amid the post-Covid sell-off environment.
The total amount of capital invested in hedge funds globally swelled by USD220 billion between April and June – a quarterly record – to reach some USD3.177 trillion overall, according to new data published by Hedge Fund Research.
The surge was driven both by improving strategy performance – HFRI’s Fund Weighted Composite Index gained more than 9 per cent in Q2, its best quarterly performance since the global financial crisis – and
MARKETS
BlueBay Asset Management, the London-based fixed income and emerging markets manager, is warning the recent uptick in economic activity could give way to “a more difficult backdrop” in August, as the future direction of the global economy continues to hinge heavily on developments surrounding a potential coronavirus vaccine.
BlueBay chief investment officer Mark Dowding said recent economic data showed a “more rapid bounce” during May and June than many predicted following the Covid-19 lockdown.
“We believe that in Europe this momentum may carry over into July data; conversely, in the US we believe that a dip is more likely when
SPACS
Investors like Bill Ackman are bringing Special Purpose Acquisition Companies (SPACs) back into vogue, and while the size and sophistication of these ‘blank-check’ companies is evolving, it is unlikely to signal a long-term structural shift.
GOLD
Soaring gold prices are bringing stellar returns for hedge funds this year, and now projections for the rest of 2020 are being revised upwards in light of the commodity’s runaway momentum.
COMPLIANCE
In part one of this article series, entitled Alphabet Soup, three key themes were discussed in relation to the global regulatory environment investment managers must navigate: 1) Uncertainty, 2) Accountability and 3) Increased Scrutiny.
As the complexity of meeting compliance continues to grow, investment managers are looking at how best to tackle data management, improve workflow efficiency and ensure good governance, particularly those who operate across multiple jurisdictions.
Headcount not the solution
Many firms are resigned to simply throwing money at the problem. While understandable, this is not sustainable. A more strategic approach, one that leverages technology, can not
Liquid alternatives
UCITS hedge funds delivered on their pledge of portfolio diversification during the coronavirus-fuelled market meltdown this year, and investors should now consider putting more of their money into the sector to seize on continued market dislocations, Lyxor Asset Management says.
A new Lyxor study led by Bernadette Busquere Arnal, European head of hedge fund research, and Nathanael Benzaken, chief client officer, forecasts further growth in alternative UCITS, after the sector outflanked broader market indices during the Covid-19 crash in March.
The commentary also suggested the pandemic is further driving sustainable investment trends among UCITS hedge funds.
While the HFRI Liquid
ACTIVIST FUNDS
The first half of 2020 has proved tricky for activist hedge fund managers, as performance remained in the red and the number of companies targeted by activists fell to its lowest level in five years.
Activist strategies were hit hard earlier in the year by the coronavirus pandemic, but more recently performance has recovered, according to new eVestment data, with managers soaring almost 23 per cent during the second quarter of the year.
But despite recent the recent resurgence – which included a 4.71 per cent advance in June – activist hedge funds remain down 6.44 per cent for the
GUEST ARTICLE
By Xavier Parain (pictured), CEO, FundRock Management Company – The impact of Covid-19 has altered the mechanics of almost every profession, and the fund management is no different. Here are four things that we have learnt about the way that fund managers have mitigated systemic risk during the crisis and slowed the spread of market contagion.
