New Tactic by Hedge Funds to Find Talent

An article in Institutional Investor highlights an online competition—called the Stocks Debate Challenge–that is being used by hedge funds to find new talent “outside the well-trodden channels of elite schools and rival financial firms.” Through the new online platform, “anybody—regardless of credentials—is allowed to pitch investment ideas in a short video. The creators of the best submissions go on to the next round: debating fellow candidates in front of a board of hedge fund managers… Read More

Will Factor Investing Kill Hedge Funds?

Last month, the Financial Times ran a lengthy piece on factor investing that discusses to what degree it poses a threat to the hedge fund industry. The article recalls a controversial 2001 paper in which AQR’s Cliff Asness argued that the hedge fund industry’s skills were “overstated.” Today, the article reports, AQR is a “major player in the hedge fund industry. It’s $226 billion of assets under management outstrip even Ray Dalio’s Bridgewater Associates. But rather… Read More

Bill Ackman’s Possible Comeback and How Investors Could Benefit

The hedge fund titan that in recent years has endeared significant losses, and investor exodus and a failed activist campaign could be making a comeback, according to a recent article in Barron’s. Ackman’s publicly traded investment vehicle Pershing Square Holdings, the article reports, has gained more than 20% in asset value since March and, through July 10th, and was up over 10% on the year, “about double the return on the S&P 500 index.” The… Read More

Investors Flee from a Hedge Fund Star

After more than ten years of impressive returns, David Einhorn’s Greenlight Capital Inc. has seen assets under management drop from a reported $12 billion in 2014 to about $5.5 billion, and investors are losing patience with poor performance. This according to an article in The Wall Street Journal. After discussions with more than a dozen current and former investors and employees of Greenlight, WSJ reports that “some frustrated clients have pulled out of Greenlight over… Read More

Oil Hedge Funds Struggling

Some of the biggest commodity hedge funds are shutting down despite a rally in raw materials during the past year, according to a recent article in The Wall Street Journal.   In 2017, the article reports, “closures of commodities hedge funds outnumbered launches for the first time in data going back to 2000 ” (data from Eurekahedge) and the trend has continued this year. Fund managers and traders say it’s happening because “investors who were… Read More

Hedge Fund Managers See Crisis Brewing

A recent Bloomberg article reports that there is a growing contingent of hedge fund managers who see market chaos on the horizon. The article reports that in May, billionaire George Soros “warned of a looming financial crisis and an existential threat to the European Union.”   But betting on a crash has been a “painful strategy for years as central banks across the globe bought assets to prop up markets,” the article says, offering a… Read More

Trouble for Quant Hedge Funds

The rise in market volatility has resulted in poor results for many quant funds, according to a recent Bloomberg article that says, “They were caught flat-footed in February when markets turned turbulent on concern over rising interest rates, followed by trade wars with China and the election in Italy.” The article reports that Renaissance Technologies, the world’s most profitable hedge fund, is trailing its benchmark in one fund this year (through mid-June) and that Jaffray Woodriff,… Read More

Hedge Funds Share Best Ideas Before Dumping Stocks

A recent article in Bloomberg discusses the tendency for hedge funds to pitch their best investment ideas at investor conferences, only to then “sell pitched stocks after the conferences to take profit and create room for better investment opportunities.” The article reports that a new study by Harvard doctoral student Patrick Luo (in which he reviewed nearly 30 investment conferences that took place between 2008 to 2013) shows that “on average, a hedge fund manager… Read More

The Tarnishing of David Einhorn

A recent article in Institutional Investor chronicles the fall-from-grace of hedge fund legend David Einhorn, billionaire founder of Greenlight Capital. “It takes a certain amount of self-confidence to think you’re smarter than everyone else,” the article says. “That’s especially the case when the markets are telling you something else—as has been the case for a decade with [David] Einhorn.” It describes Greenlight’s 14.9% loss through April– compared to a 0.4% loss for the S&P 500—as… Read More

Institutional Investor’s Rich List

In May, Institutional Investor published its “Rich List” of the world’s 25 highest-earning hedge funds– which, it reports, earned a total of $15.38 billion (approximately $615 million each). In order to make the list, a firm had to earn at least $225 million (compared to $130 million in 2016). “This is an increase of nearly 40 percent from 2016,” the article says, “a year when the top 25 collectively earned the lowest amount since 2008.”… Read More