|Bid||168.85 x 0|
|Ask||168.95 x 0|
|Day's Range||167.80 - 172.40|
|52 Week Range||124.15 - 183.55|
|Beta (3Y Monthly)||1.48|
|PE Ratio (TTM)||9.14|
|Forward Dividend & Yield||0.08 (4.57%)|
|1y Target Est||N/A|
(Bloomberg) -- The passive investing wave is coming to hedge funds.Aberdeen Standard Investments and Hedge Fund Research Inc. are charting new territory by creating a fund that tracks HFR’s broad index of 500 hedge funds.The product will allow wealthy investors and institutions to play in the rarefied world of hedge funds without having to kick their tires or deal with the egos.“For the first time you can have access to the space without having the internal costs of selecting managers or paying a premium for someone to externally handle that manager-selection alpha for you,” said Russell Barlow, global head of alternative strategies at ASI, which oversees about $670 billion. “You can just buy the passive version.”The development is a testament to just how far-reaching index funds have become, touching almost every asset class. And it comes as stock pickers were dealt a big blow Wednesday as assets in U.S. index-based equity mutual funds and exchange-traded funds topped those in active stock funds for the first time in August.$5 Million Buy-InThe new ASI-HFR product will allow clients to passively invest in hundreds of actual flagship hedge funds, as opposed to separately managed or liquid alternative versions of them, said HFR founder Joe Nicholas. The fund is expected to start trading in January, along with 30 strategy and sub-strategy index funds.The hedge funds in the new, underlying index are being selected for their liquidity -- quarterly or better -- and size. They are required to report their performance and assets under management monthly to HFR. Investors will be able to subscribe or redeem from the index fund quarterly.Chilton Investment Co., Mariner Investment Group, and Man Group Plc are among the hedge funds in HFR’s 500 index, according to Nicholas.Investors will need to put up a minimum of $5 million to get into the fund. They’ll also pay a fee for the product as well as blended management and performance fees for the underlying hedge funds. Some of these charges are being determined. The index’s performance will be net of the hedge fund managers’ fees.Fee StructureThe management fee is likely to be a fraction of what fund-of-funds charge, according to Barlow. That averages 1.17%, Preqin data show. The HFR’s benchmark 500 index fund has an average management fee of 1.4% and the average incentive fee of 17%.If successful, the index fund could prove another challenge for the beleaguered fund-of-hedge funds industry, which has suffered 11 straight years of net withdrawals. Investors have abandoned these middlemen due to paltry performance and the extra layer of fees they charge. Industry assets totaled $643 billion in June, down from a peak of almost $800 billion in 2007, according to HFR.The risk for ASI is that the new fund could cannibalize its own fund-of-hedge funds business, but Barlow thinks it will instead tap into client money sitting on the sidelines.Investors such as state pensions funds are under-allocated to the hedge fund industry by $200 billion in the U.S. and 24 billion pounds ($30 billion) in the U.K., versus their target allocations, according to ASI’s estimates. The index fund is expected to capture some of those players who, due to the constraints associated with hedge fund investing, prefer to invest passively.Bleeding Assets“There’s an enormous component of allocators to alternatives that are underweight the investment class,” Barlow said. “It boils down to a combination of a lack of liquidity, high fees, transparency and performance.”Active money managers have been bleeding assets in recent years as clients rebelled against high fees and disappointing returns, a trend that prompted Moody’s Investors Service to predict that index funds will overtake active management in the U.S. by 2021.Michael Burry, the hero of Michael Lewis’s book “The Big Short,” warned last week that passive fund inflows are inflating a new stock and bond bubble that is bound to blow up as money linked to fund indexes exceeds amounts traded in individual stocks.Liquidity IssueASI said its liquidity requirements will help it avoid a mismatch in flows between the new fund and its underlying managers. If an underlying fund ends up shuttering or gating investors, the index will mark the position to the secondary market -- in some cases, zero -- and remove the fund from the index. Meanwhile, investors will have the option to keep their exposure to the offending fund -- even if they redeem from the index product -- to not miss out on any future recovery.In February, ASI started a liquid alternatives index fund that offers daily liquidity and tracks a separate HFR index of about 180 UCITS funds. The European Union’s UCITS directive allows such funds to employ some hedge-fund techniques, such as using leverage or shorting. They’re also more affordable to retail investors than a typical hedge fund.A handful of other UCITS index funds tracking watered-down versions of hedge fund manager strategies, or with a smaller constituent of funds, have existed at one time or another.(Updates with hedge funds in the 500 index in the eighth paragraph.)To contact the reporter on this story: Katia Porzecanski in New York at email@example.comTo contact the editors responsible for this story: Alan Mirabella at firstname.lastname@example.org, Josh FriedmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Amundi SA, Europe’s biggest independent fund manager, saw customers withdraw money for a third consecutive quarter in the three months through June. It’s far from the only asset manager suffering outflows. And as the drumbeat of reports and research questioning portfolio managers’ claims to beat the market grows ever louder, the reluctance of clients to commit funds is completely rational.Halfway through the 36 pages of slides Amundi published along with its results on Wednesday is a data set entitled “Solid Performances.” There is another – less Panglossian – way of reading the numbers. One of the slides purports to argue that 64% of the firm’s fixed income assets and 59% of its equity holdings outperformed their relevant benchmarks in the first half of this year. I’d argue that customers should read those figures the other way around; that more than a third of Amundi’s bond bets and almost half of its stock picks fared no better than their respective indexes.Similar skepticism is justified with respect to how Amundi’s performance ranks against that of its peers. On a five-year basis, for example, the firm highlights that 75% of its funds ranked in the top two quartiles for performance as measured by research firm Morningstar. Or, alternatively, the figures show that a quarter of its funds languished in the bottom half – hardly a terrible performance, but still suggesting a one-in-four chance that you’d have been better off buying an index tracker.On a shorter timescale, its performance has become even less impressive, depending how you look at it. On a one-year horizon, almost a third of Amundi’s funds were in the bottom two quartiles.And all of these figures are calculated before fees. Having a 69% chance of beating the benchmark over the course of a year, depending which Amundi fund you chose, doesn’t seem like disastrous odds – until you include those fees, which erode your returns.None of this is to single out Amundi for criticism. The entire fund management industry uses similar marketing methods, and arguably the French firm’s five-year performance is still impressive. But it is far from the only asset manager to suffer outflows. Janus Henderson Group Plc said on Wednesday that it suffered a seventh consecutive quarter of withdrawals in the second quarter, while Man Group Plc, the world’s biggest publicly traded hedge fund, saw net outflows of $1.1 billion in the first half of this year.The European asset management industry in general has seen “virtually zero net inflows” so far this year “given the persistent wait-and-see approach from savers and investors resulting from strong risk aversion,” Amundi says.I’d add a caveat to that. As more customers question the value that active managers claim to be able to add to investment strategies, the industry faces an existential crisis. Even if surging markets restore investor faith in the outlook, low-cost index-tracking funds will capture more of their money.At least Amundi has a hedge against that trend; its passive business attracted almost 7 billion euros ($7.8 billion) of assets in the first half of the year, growing assets under management in exchange-traded and smart beta funds to 114 billion euros. For fund managers that don’t offer those products, the future looks increasingly bleak.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Beleaguered Swiss fund manager GAM Holding AG finally has some good news to report that should allow it to draw a line under a terrible year. That could be the catalyst for a buyer deciding the brand is salvageable – while there’s still enough of the business left to buy.On Tuesday, GAM said it had reached a truce with Tim Haywood, the star fund manager it suspended a year ago and subsequently accused of gross misconduct. Each has agreed that “neither party will pursue the other,” with the caveat that the truce is “based on current facts.” Even though Haywood countered by saying he dropped his suit for unfair dismissal because the cost of pursuing it would outstrip any damages, the accord should remove the threat of future litigation and any dirty linen being aired in a courtroom.Customers who were trapped in Haywood’s Absolute Return Bond Funds when GAM froze them a year ago are receiving the last of their money back. On average, they will get 100.5% of the net asset value of their holdings compared with their valuation when GAM halted withdrawals and began liquidating the fund. That should deter the regulators, who have been silent on the matter, from punishing the firm for any lack of oversight. Apart from the eight-month delay between a whistle-blower informing on Haywood and his suspension, GAM appears to have done all it could to safeguard the money entrusted to it.Finally, the eight-month search for a new permanent leader is over with the appointment of BlackRock Inc. veteran Peter Sanderson as chief executive officer. He will start in September, with interim CEO David Jacob taking the role of chairman a month later.So that’s the good news. The bad news is that the business is still in intensive care after a disastrous year. Tuesday’s bump in the share price still leaves it down more than 60% in the past year.Profitability is as underwhelming, with underlying pretax income dropping to 2.1 million Swiss francs ($2.1 million) in the first half of 2019 from 91.3 million francs in the first six months of last year.Net outflows of 7.6 billion francs in the first half overshadowed 3.6 billion francs of market gains, cutting the assets overseen by the investment management division to 52.1 billion francs from 56.1 billion francs at the end of last year. That in turn trashed net fee and commission income, which dwindled to 171.1 million francs from 287.7 million francs in the year-earlier period.To be fair, GAM isn’t alone in struggling to hang on to cash. Jupiter Fund Management Plc announced its sixth consecutive quarter of net outflows on Tuesday, while Man Group Plc saw customers pulling money out in the first three months of the year.But the Swiss firm reckons it saw an “improving flow trend” in June and July with net inflows. That should give shareholders some hope that the worst is now behind it. Moreover, GAM has managed to defend its management fee margin, keeping it almost unchanged from December at just below 54 basis points.In the absence of a buyer, the new CEO is left with the same to-do list facing the head of every other medium-sized asset manager: Cutting costs where possible, trying to halt the erosion in fees, and praying that the market environment remains friendly enough to bolster performance and bring in performance fees and client cash.But as I suggested earlier this month, GAM’s best future may lie in finding a private equity buyer to take it off the market and let it rehabilitate its credibility with customers away from the glare of quarterly public reporting. Sanderson may have other plans; but unless he can do more for the stock price than Tuesday’s pop of about 4% by late morning, shareholders may be better served by him dressing up the company for a sale.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Hedge funds, though, remain the industry’s problem child – hence the relative underperformance of Man Group Plc, the world’s biggest publicly traded hedge fund. The firm’s traders took advantage of rallying markets to deliver positive investment performance worth $4.5 billion in the quarter, driving a modest 3.5 percent gain in assets under management to $112.3 billion. Last month, Man cut its goal to increase assets under management each year to between 1 percent and 6 percent from as much as 10 percent previously “to better reflect industry trends and the market environment.” So the company has conceded that it’s unlikely to revisit the 2018 inflows that were equal to 9.9 percent of assets, never mind the record 15.8 percent growth in 2017.
LONDON (Reuters) - British hedge fund firm Man Group said on Thursday that investment gains pushed its funds under management up to $112.3 billion (£85.8 billion) in the first quarter from $108.5 billion ...
The FTSE 100 added 0.5 percent, as a steep fall in information and analytics provider Relx curbed gains in the index, while the FTSE 250 bounced 1.1 percent to levels not seen since early November. "I think the market is progressively anticipating a compromise (on Brexit) ... I remain optimistic regarding the pound and more domestic UK shares," Raymond James analyst Chris Bailey said. WPP, the world's biggest advertising company, jumped 5 percent on its best day in nearly a year after results showed that although underlying net sales fell 0.4 percent in 2018, it was better than a forecast of a 0.5 percent dip.
Net inflows of $10.8 billion last year were offset by $7.7 billion of investment losses by the firm’s portfolio manager, plus a further $3.7 billion erosion from currency market moves. Perhaps more worrying is the drop in margins in the hedge fund’s most lucrative business category, its absolute return strategy. While the decline can be blamed on a shift toward institutional assets, which typically attract lower levies, it still hurts Man’s ability to generate revenue.
LONDON (Reuters) - British hedge fund manager Man Group said on Friday its assets under management slipped 0.5 percent to $108.5 billion (81.79 billion pounds) last year on market weakness and currency ...
LONDON (AP) — Britain's leading literary award, the Man Booker Prize, faces uncertainty after its main financial backer announced it is ending its sponsorship after almost two decades.