Carnage in Hedge Fund Land Gets Worse

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We wrote earlier about the carnage in Hedge Fund space with notable hedge funds such as Millennium, Point 72, Citadel and Balyasny all having a difficult year with poor returns. Today another famous hedge fund Swiss based Jabre Capital disclosed that it is returning all investors capital. Bloomberg writes;

Philippe Jabre is returning money to investors after an “especially challenging” year, adding to the swelling list of hedge-fund veterans giving up on an industry where money-making opportunities have dwindled. Geneva-based Jabre Capital Partners SA is selling positions in a “disciplined manner” and intends to return most of the proceeds by February, founder and chief investment officer Jabre wrote in an investor newsletter dated Dec. 12 and obtained by
Bloomberg News.

Jabre wrote to his investors that the evolvement of financial markets over the last decade due to new technologies it has become more difficult for traditional managers like himself. That they are being replaced by funds run by computer models (quant funds).  Jabre’s returns over the last year reflect the  difficulties with their Global Balanced Fund down over 40%.

 Source: Bloomberg

Jabre and other funds such as Tourbillion, Highfields and Criterion Capital that have all closed this year could be the precursor of what can happen come early 2019 as hedge fund investors see total returns on various funds and redeem their funds. 

It might be the time to look at what are the most popular names amongst hedge funds, also known as “Hedge Fund Hotels”. These companies would probably take hits if there is further pain for the funds and they have to continue reduce their exposure. According to WalletHub the top 25 names are;

 Source: WalletHub