Thursday, May 26, 2011

Steven Cohen’s SAC Capital Management to start Quantitative Trading hedge fund

SAC Capital Advisors, the Stamford-based hedge fund founded by Chief Executive Officer Steven A. Cohen, has announced that it will be launching a quantitative trading based hedge fund due to requests from current investors. According to an article from Bloomberg, quantitative trading already makes up 15% of SAC Capital’s $35 billion in assets under management. It is thought that the new quantitative fund will be run by roughly 20 different teams of quantitative traders.

This news comes a week after an announcement that SAC Capital Advisors is considering closing off its flagship fund to new investors, despite attracting $1.5 billion in new investment since last year. Steven Cohen kept the flagship fund closed for 13 years in order to ensure returns remained high, and it could be the same story this time around. Also, SAC has decided to wind down its multi-strategy hedge fund, which it opened in 2005, due to heavy losses incurred during the 2008 financial crisis.

Monday, May 9, 2011

Top Hedge Fund List sees Assets jump by 24% in 2010

The Top Hedge Funds in the United States saw their US Equity assets jump by over $35.3 billion during 2010, representing a 24% increase in assets. Collectively, the top 10 hedge funds on the list managed $182.1 billion at the end of 2010, according to SEC filings. The top hedge fund on the list is John Paulson’s Paulson & Co with $29.2 billion in equity assets. Mr. Paulson’s hedge fund firm saw its assets increase by nearly $10 billion over the course of 2010. Last year, Paulson & Co. was ranked #4 with $19.4 billion in assets under management.

Last year’s largest hedge fund, D.E. Shaw & Co, only fell one notch down the list to number two. David Shaw’s New York-based hedge fund recorded assets of $25.8 billion, slightly down from the $26.7 billion the multi-strategy hedge fund shop managed at the end of 2009.

Robert Atchinson and Phil Gross’ Adage Capital Partners retained its number three spot on the list. Adage reportedly managed $25.5 billion, noticeably up from the firm’s previous mark of $19.9 billion. Last year’s number two, Jim Simons’ Renaissance Technologies, fell a couple of notches down to number four with $24.6 billion.

Last year, only 5 of the top 10 hedge funds on the list managed more than $10 billion in equity assets. Notably, all 10 of the hedge funds on this year’s list managed more than $11.5 billion. Newcomers to the top 10 hedge fund list include: #5 Ken Griffin’s Citadel Investment Group, #6 Steven A. Cohen’s SAC Capital Advisors, #9 Clifford Asness’ AQR Capital Management LLC and #10 Carl Icahn’s Icahn Associates .

RankInstitutionAssets ($MM)
1Paulson & Co.$29,271
2D.E. Shaw & Co$25,846
3Adage Capital Partners $25,559
4Renaissance Technologies$24,617
5Citadel Investment Group$18,287
6SAC Capital Advisors$12,286
7Viking Global Investors$12,057
8Lone Pine Capital$11,463
9AQR Capital Management LLC$11,275
10Icahn Associates $11,514

See rest of article.

Sunday, May 1, 2011

London remains center of European Hedge Fund universe despite higher taxes

London is the second largest hedge fund money center in the world, behind only New York. According to an article by Reuters, this position of power will not change in the face of rising taxes. Despite its 50% tax rate on high earners, 63 hedge funds with over $1billion in assets under management are headquartered in London, compared to just 3 such hedge funds in Paris and Stockholm, the next largest European money centers.

Large firms such as Brevan Howard Asset Management and Bluecrest Capital Management retain offices in Switzerland; Brevan Howard even has senior executives Alan Howard and Nagi Kawkabani situated there. However, smaller hedge fund managers seem drawn to London – former Brevan Howard trader Frederic Denjoy, of the Geneva office, left to set up his own hedge fund Denjoy Capital Partners in London.

It seems that smaller hedge fund managers may be drawn by the lifestyle and comfort of London, and to them higher taxes are a mere inconvenience. Larger hedge funds, on the other hand, are forced to retain their London presence to compete for talent with emerging boutique and recently launched hedge funds.