Highflying Tiger Global Humbled by Unraveling of Giant Tech Bet (The Wall Street Journal)
Tiger Global Management rode the tech boom like no other investment firm. It was funding more startups than any other U.S. investor when the market peaked last year, and had tens of billions of dollars from pensions, endowments and rich clients riding on some of Silicon Valley’s hottest stocks. With tech values plunging, the New York firm is humbled. The market rout has vaporized years of gains in a matter of months, calling into question Tiger’s big bets.
Citadel’s Flagship Portfolio Up 13%, Far Outpacing Broader Stock Market (Reuters)
NEW YORK, June 6 (Reuters) – Hedge fund Citadel posted a modest rise in its flagship portfolio last month and now boasts gains of 13% for the year, far outpacing the broader stock market’s double digit losses. Ken Griffin‘s Citadel told investors that its multi-strategy Wellington fund inched up 0.23% in May when the S&P 500 index (.SPX) ended flat. May’s small increase follows a more robust 7.45% gain in April when the S&P tumbled nearly 9%.
Cathie Wood’s Flagship Fund Up 17% Since May Bottom: What’s Behind The Rise? (Benzinga)
Cathie Wood-led Ark Investment Management’s flagship innovation fund, which counts Tesla Inc (TSLA), Zoom Video Communications Inc (ZM) and Coinbase Global Inc (COIN) as top constituents, has rallied 18% higher since bottoming out in May. What Happened: Ark Innovation ETF (ARKK) declined over 10% on May 11 after shares of Coinbase plummeted 26.4% after the cryptocurrency trading platform swung to a $430 million net loss in the first quarter and reported massive declines in active users.
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Graham Capital Founder Says Market Conditions are Good for Macro Traders (Hedge Week)
Graham Capital founder Kenneth Tropin believes hedge funds are currently experiencing the best conditions for trading bonds and currency markets since the global financial crisis of 2008, according to a report by The Financial Times. Graham cites high levels of inflation and supply chain bottlenecks for the creation of favourable conditions that are allowing macro managers to benefit as central banks rapidly raise interest rates to combat surging inflation.
‘Big Short’ Investor Michael Burry Warns the US Economy is on Borrowed Time — and Consumers will Blow Through Their Savings in a Matter of Months (Business Insider)
The US economy is being propped up by consumers cracking open their piggy banks, and could capitulate once their savings dry up later this year, Michael Burry warned in a recent, now-deleted tweet. “Charting Total US Personal Savings/GDP,” he wrote. “Red line is the all-time low at 1.5%, set in July 2005. At the last 12mos’ rate of depletion of savings, could hit that level between September and December this year. Borrowing time.”
Tainted by Crises and Scandals, Toshiba’s Best Option is a Leveraged Buyout (Business Standard)
Having major shareholders Elliott and Farallon on the board makes this reform far more possible than any other option. Foreign investors have previously won big after helping Toshiba out. One of the most storied global companies, Toshiba Corp., is set to get a serious makeover. Global hedge funds and private equity firms including the likes of Paul Singer’s Elliott Management Corp. and Farallon Capital Management LLC are circling to, as activists like to call it, unlock value. Change is looking like a real possibility after months of chaos and uncertainty.
Private Equity: a Bridge Over Troubled Waters? (Preqin)
Private equity managers have produced strong returns through cycles and the outlook continues to look bright. Growth across alternative assets has been phenomenal over the past 10 years, driven by the success of private equity funds in generating returns and raising capital. Assets under management (AUM) grew from $1.72tn at the end of 2010 to $4.56tn in 2020, with the compound annual growth rate (CAGR) accelerating from 6.0% over 2010-2015 to 14.9% over 2015-2020.
Hedge Fund Elliott Sues LME for $456 Million Over Nickel Trading Halt (Reuters)
HONG KONG/LONDON, June 6 (Reuters) – U.S. hedge fund Elliott Associates is suing the London Metal Exchange (LME) for $456 million for cancelling nickel trades after chaotic trading in March that forced the exchange to suspend its nickel market, the LME said on Monday. The legal action piles more pressure on the exchange, which is being probed by regulators and is struggling to restore trust and volumes in its nickel market.
Coatue Hedge Fund Down 17%, Boosts Cash to 80% (Seeking Alpha)
Coatue Management liquidated positions recently as its tech-focused flagship hedge fund fell 17% year to date. According to an investor presentation the asset manager is raising cash exposure to more than 80% for these times of “high uncertainty.” That’s higher than during any recent selloffs like COVID and the taper tantrum, at levels not seen since the dot-com crash. The normal average cash level is 10%.
Familiar Flow Trends Continued for Hedge Funds in April (Opalesque)
Opalesque Industry Update – Investors removed an estimated net $5.20 billion from hedge funds in April. Performance accounted for an increase in assets. The result of both factors was a slight increase in estimated industry AUM to $3.624 trillion, according to eVestment. From a strategy perspective, capital raising themes have mostly stayed the same for several months. Multi-strategy managers along with managed futures have continued to raise new assets while credit and long/short equity funds have generally had a difficult time. While those basic themes continue, there are more subtle changes happening which point to a weakening of the success the industry has had, overall, since the onset of the COVID-19 pandemic.
Monday 6/6 Insider Buying Report: CABO, NEE (Nasdaq.com)
On Wednesday, Cable One’s Director, Thomas Sinnickson Gayner, made a $6.46M purchase of CABO, buying 5,000 shares at a cost of $1291.17 each. Gayner was up about 1.1% on the purchase at the high point of today’s trading session, with CABO trading as high as $1305.60 at last check today. Cable One is trading up about 1.3% on the day Monday. Before this latest buy, Gayner made one other buy in the past twelve months, purchasing $62,898 shares at a cost of $1257.97 each. And at NextEra Energy, there was insider buying on Thursday, by Eric E. Silagy who purchased 13,128 shares for a cost of $76.45 each, for a total investment of $1.00M. NextEra Energy is trading up about 2.7% on the day Monday. So far Silagy is in the green, up about 6.6% on their purchase based on today’s trading high of $81.49.
Thomas Gayner Purchases 5,000 Shares of Cable One (CABO) For Markel (Benzinga)
Notable Insider Buys: 1. Iovance Biotherapeutics, Inc. (IOVA): $7.85: Shares of this biotech company were acquired by 5 insiders: Director Wayne P. Rothbaum acquired 1,000,000 shares, paying $6.60 per share for a total amount of $6.6 million. These shares were purchased indirectly by Quogue Capital LLC.
