Weekly round - up

Hedge funds up tech stock bets

Hedge funds such as Tiger Global Management, Pershing Square, and Third Point have expanded their investments in prominent technology stocks despite a minor setback in the sector during the third quarter, as revealed in a Reuters report. The report, indicates heightened interest from hedge funds in tech giants like Amazon, Microsoft, and Meta Platforms during Q3, contributing to the overall market gains observed throughout the year.

Tiger Global Management notably increased its holdings in Nvidia, a company known for its semiconductor support for artificial intelligence systems, by 77% in the third quarter. Additionally, the firm raised its investment in Meta Platforms by 4%, Microsoft by 8%, and Amazon by 6.5%.

Hedge funds copy Citadel fee model in fight for top Asia traders

A growing trend among several hedge funds in Asia involves adopting practices from global giants like Citadel and Millennium Management. These funds are introducing additional fees to cover a spectrum of costs, including employee compensation and life insurance, in an effort to attract top talent.

Recently, Nine Masts Capital Ltd. implemented the expense pass-through model, with Southern Ridges Capital Pte having embraced it the previous year. Pinpoint Asset Management Ltd. has reportedly established three new share classes utilising this structure, as per Bloomberg .

Despite many hedge funds in Asia experiencing modest returns, this model may result in higher fees compared to the traditional performance and management charges. According to data, regional funds have declined by 1.8% this year, following an average 8.8% drop in 2022, marking the most significant decrease since 2008. Global investors, concerned about geopolitical issues and a sluggish economy, have become less enthusiastic about hedge funds heavily exposed to China.

Schonfeld cuts 15% of staff after exiting millennium talks

Schonfeld Strategic Advisors has implemented a 15% reduction in its workforce as a cost-cutting measure following the termination of negotiations with Izzy Englander’s Millennium Management earlier this week according to a report .

One of the notable departures includes Ben Melkman, a trader who had abandoned plans to establish his own firm to join Schonfeld earlier this year. Approximately 150 employees were informed that their positions have been eliminated, primarily focusing on non-investment roles.

The decision to scale back comes after Schonfeld, a multimanager firm overseeing $11.7 billion, abruptly concluded talks with Millennium regarding a potential partnership deal on Tuesday. This move followed months of negotiations and was prompted by Schonfeld securing verbal commitments of up to $3 billion from other investors. The aim is to offset the $2.3 billion withdrawn by clients throughout the year.

Manulife Investment Management to buy London-based credit manager CQS

Reports on Wednesday state that Manulife Investment Management, the global wealth and asset management division of Canada's largest insurer, Manulife Financial announced its acquisition of CQS, a London-based alternative credit manager.

This announcement follows a decision by Manulife Investment Management to reduce its workforce by 250 positions across offices in the U.S., Canada, Britain, and Asia. The job cuts were revealed a day earlier as part of the broader efforts by Canadian financial firms to address elevated costs and cope with an economic slowdown.