EcoR1 Goes Bottom-Fishing (Institutional Investor)
The biopharma and life sciences hedge fund firm is betting big on companies whose stocks have plummeted after reporting bad news. In recent weeks, EcoR1 Capital has sharply boosted its stake in at least four of its major holdings and established a sizable new position in another company, according to recent 13G filings. Since the trades were made in July, some of them won’t show up in the firm’s second-quarter 13F filing when it’s made public around mid-August.
Walmart Buys Out $1.4 Billion Tiger Global Stake in India’s Flipkart, Wall Street Journal Reports (Reuters)
Walmart (WMT.N) has taken further control of the Indian e-commerce firm Flipkart by buying out hedge fund Tiger Global and venture capital firm Accel’s remaining stakes, according to media reports on Monday. Walmart paid $1.4 billion to buy the remaining Flipkart shares owned by Tiger Global in recent days, valuing the Indian company at about $35 billion, the Wall Street Journal reported, citing a letter the fund sent to investors. This is down from the near-$38 billion valuation that Flipkart attained in 2021.
Redemptions at Odey AM Persist Two Months After Sexual Assault Claims (Financial News)
Funds with ties to Crispin Odey have continued to be battered by redemptions nearly two months after the hedge fund founder was hit by a string of sexual misconduct allegations. Investors have continued to pull cash from portfolios at Odey Asset Management and its subsidiary Brook Asset Management, according to data from Morningstar Direct. Odey’s Mayfair empire has been fighting for survival since a Financial Times investigation on 8 June unearthed claims of sexual harassment and sexual assault against the City titan stretching back decades. Odey strenuously denies the claims.
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The Stock Market’s Fear Gauge Just Hit a 42-Month Low. Investors are Ignoring a Load of Risks, Hedge Fund Manager Says (Business Insider)
Investors are facing a bunch of risks and challenges but by one measure, they appear more confident today than before the pandemic struck. Boaz Weinstein underlined how absurd that is in a Saturday post. “Yup, totally makes sense that financial market uncertainty is now less than pre Covid, Inflation, Ukraine, inverted yield curve, high European recession risk, moderate US recession risk, etc.,” Weinstein wrote sarcastically on X, formerly known as Twitter. The Saba Capital Management chief was referring to the CBOE Volatility Index, which on Friday notched its lowest weekly close since January 2020. The VIX is known as Wall Street’s “fear gauge” because it tracks the market’s expectations of stock-market volatility over the next month, based on the prices of put and call options.
Hedge Funds Target Closed-End Funds With Arbitrage Plays (The Wall Street Journal)
Hedge funds say it’s an ideal time for a long-running activist investor strategy: closed-end fund arbitrage. Closed-end funds are mutual funds that issue a limited number of shares when they go to market. Unlike open-end funds, which are far more common, closed-end funds don’t issue or redeem new shares based on demand. Closed-end fund shares are traded on exchanges, often for more or less than the value of their underlying assets.
US Hedge Funds Sell $700m of China ADRs in July, Says Morgan Stanley (Hedge Week)
US-based hedge funds sold around $700m in New York-listed shares of Chinese companies during July amid a rally in the country’s stocks, according to a report by Bloomberg citing data from Morgan Stanley’s prime brokerage division. PDD Holdings, Yum China Holdings, and Vipshop Holdings were among the companies most sold down by long-only managers over the month, as the The Nasdaq Golden Dragon index of Chinese company American depositary receipts (ADRs) surged 11% during July on the back of potential further government support for the China’s struggling economy.
How Hedge Fund Managers Are Using ChatGPT (Bloomberg)
Hedge funds and other money managers are increasingly leaning on ChatGPT for marketing, and to summarize vast reports, according to a new survey. Forty-four percent of money managers use the artificial intelligence tool in a professional capacity, according to the report from BNP Paribas SA. Most utilize ChatGPT to generate marketing text, or to recap large documents such as regulatory filings or broker research reports.
Citadel Securities Hires Former BlackRock China Head, Ex-CSRC Regulator to Lead Expansion in US$10 Trillion Market (SCMP.com)
Citadel Securities, Ken Griffin’s market-making business, hired BlackRock Inc’s former China head to spearhead its business just as the US$10.3 trillion Chinese stock market is regaining its composure and favour among foreign investors after years of market crackdown. Tang Xiaodong will join the company in September, and lead its China team to work closely with local clients, business partners and regulators, the company said. He quit BlackRock, the world’s biggest money manager, in early June, accrding to local media reports citing personal reasons.
Insiders Buying Allegion, Asana And This Financial Services Stock (Benzinga)
Asana: The Trade: Asana Inc. (ASAN) President, CEO and Chair Dustin Moskovitz acquired a total of 160,000 shares at an average price of $22.48. To acquire these shares, it cost around $3.6 million. Allegion: The Trade: Allegion plc (ALLE) President and CEO John Stone acquired a total of 17,500 shares an average price of 116.62. To acquire these shares, it cost around $2.04 million.
Central Banks Issues Insider Trading Warning (The Times)
Irish trading venues for securities – including the Irish Stock Exchange – are failing to properly police insider dealing and market manipulation, a Central Bank of Ireland review has found. The inspection by regulators, done last year to examine how effective trading venue operators were at market surveillance, uncovered widespread failures to monitor and detect abusive behaviours.
