Hedge Fund Millennium Will Charge Fees Even When It Loses Money (Bloomberg)
Izzy Englander’s Millennium Management has changed its terms to ensure that clients always pay a minimum fee, even if the hedge fund loses money. They will now pay annual fees of about 1% of assets or 20% of investment gains — whichever is greater, according to a client letter seen by Bloomberg. It’s part of an effort to “reflect current industry-standard approaches” adopted by other multi-strategy peers, Millennium said in the Feb. 21 letter. Citadel, for example, has a similar fee structure.
Taiga’s Opportunity-Driven Net Exposure (Hedge Nordic)
Stockholm (HedgeNordic) – Long-biased long/short equity vehicle Taiga Fund edged down 6.8 percent in 2022, as it “proved difficult to insulate the fund from a dismal year for small-caps in our region,” according to founder and co-portfolio manager Ola Wessel-Aas. Up 9.6 percent in the first two months of 2023, Taiga Fund has already recovered the losses incurred in last year’s challenging market environment. “Positive exposure to select energy-related stocks has been a particularly solid foundation coming into this year,” Wessel-Aas explains the fund’s rapid recovery.
Three Arrows Founders’ Bankruptcy Exchange to Offer Claims as Portfolio Margin (Coin Desk)
Zhu Su and Kyle Davies, the founders of bankrupt hedge fund Three Arrows Capital, last month teamed with the co-founders of troubled crypto exchange CoinFLEX to create Open Exchange, calling it the “world’s first public market place for crypto claims trading and derivatives.” The exchange, abbreviated to OPNX, will feature zero-proof audits for user balances and a portfolio margin feature that was pioneered by FTX, OPNX CEO Leslie Lamb said Thursday morning on a Twitter Spaces discussion. Users will also be able to use bankruptcy claims as margin as well as selling them on a public order book, Lamb added.
Pixabay/Public Domain
Hedge Funds Up Leverage, but Fear Directional Bets with Blurred Macro Picture (Reuters)
Hedge funds are increasingly using more leverage to make wagers on the stock market this year, but they remain less inclined to bet on the market direction due to heightened macroeconomic uncertainties. Investors are focused on the economic picture as they try and assess the risk of upcoming recession as the U.S. Federal Reserve tries to bring inflation under control by hiking rates aggressively. On Wednesday, Federal Reserve’s chair Jerome Powell said future interest rates hikes could go higher than market participants anticipated to fight inflation.
Silvergate Contrarian Bet Soured for Peter Thiel-Backed Block.one, Bill Miller (Bloomberg)
Miller Value Partners, Block.one built late stakes in bank. Silvergate’s crypto ties force wind-down, liquidation plans. Just months before Silvergate Capital Corp. announced that it was winding down, banking’s first casualty from the crypto industry’s implosion, a company called Block.one was boosting its investment. Silvergate’s stock was plummeting, depositors were fleeing and the short-sellers were circling — but Block.one and its chief executive officer, Brendan Blumer, were big buyers. In November, they purchased stock amounting to a 9.27% stake in the lender, according to a statement late that month. By the end of December, the firm, whose long-time backers include Peter Thiel and Alan Howard, had boosted that position so that Block.one, together with Blumer, became Silvergate’s biggest holder with a combined 9.9% holding.
Greenlight Re Profits Lifted 43% by Investments and Underwriting (InsuranceDay)
Cayman Islands-based reinsurer sees fourth-quarter underwriting income increase 36% to $6.5m, while the combined ratio improves 2.2 points to 94.2% and total investment income rises 28% to $32.5m. Hedge fund reinsurer cuts fourth-quarter combined ratio to 94.% as underwriting income rises 36% to $6.5m.
Hedge Fund Gross Exposure Hits One-Year Peak (Hedge Week)
Goldman Sachs’ latest prime services weekly report shows that the gross exposure of hedge funds – the combined sum of their long and short positions – hit its highest level in a year last week, indicating that they are increasingly using leverage in their stock market wagers, according to a report by Reuters. Gross exposure reached 241% of assets for the week ending 2 March, an increase of 2.5 percentage points. Net exposure though, the value of long bets minus short bets, is currently close to a year-long low of 66%, according to the report, showing that managers have little bias over market direction.
A Hedge Fund Trader Gained 119% Betting Against Malls. Now He’s Targeting Offices (FA-Mag.com)
A hedge fund manager who made a 119% return shorting debt linked to shopping malls is betting on fresh pain in the US commercial property market. A large number of older offices will fail to lure back workers in the post-Covid era, making them less attractive to occupiers and spurring a wave of defaults, according to Daniel McNamara, founder of Polpo Capital Management. “No one is going to want to be in the worst-looking office in suburban New Jersey or downtown Manhattan,” said McNamara in an interview. “We think there’s a lot of room for this thing to fall in the short term. And in the longer term, at maturity, they’re going to be worth a lot less.”
Thursday 3/9 Insider Buying Report: DISH, SAVA (Nasdaq.com)
On Wednesday, DISH Network’s , James Defranco, made a $8.84M buy of DISH, purchasing 800,000 shares at a cost of $11.05 each. So far Defranco is in the green, up about 5.1% on their purchase based on today’s trading high of $11.62. DISH Network is trading up about 3.1% on the day Thursday. Before this latest buy, Defranco purchased DISH at 8 other times during the past twelve months, for a total cost of $38.85M at an average of $18.86 per share. And on Tuesday, Director Richard Barry bought $2.29M worth of Cassava Sciences, buying 88,841 shares at a cost of $25.81 a piece. Before this latest buy, Barry made one other buy in the past twelve months, purchasing $860,223 shares at a cost of $23.79 each. Cassava Sciences is trading up about 0.4% on the day Thursday.
Insiders Selling Moderna, Hayward Holdings And 2 Other Stocks (Benzinga)
Moderna: The Trade: Moderna Inc (MRNA) Director Noubar B. Afeyan sold a total of 10,000 shares at an average price of $139.00. The insider received around $1.39 million from selling those shares. Skywater Technology: The Trade: Skywater Technology Inc (SKYT) 10% owner Oxbow Industries Llc sold a total of 431,950 shares at an average price of $12.64. The insider received around $5.46 million from selling those shares.
