Hedge Crunch Financial

Larry Robbins, billionaire CEO of Glenview Capital Management, has decided to move to Florida while keeping his firm’s base in New York. Unlike many financial leaders who relocate entirely, Robbins is balancing his family’s needs with his commitment to New York’s financial sector. During a Bloomberg interview, he expressed concern about New York’s future, criticizing policies that drive high earners away and pose long-term challenges for the city.

Robbins emphasized that Glenview Capital, which manages $2.3 billion and recently reported a 16.6% gain, will maintain its operations and its 53 employees in New York, while he and his family look for a better family lifestyle in Florida.

Robbins is also contributing to community development in his new state through a $40 million ice hockey facility project with the Palm Beach North Athletic Foundation. This initiative aims to boost local sports education and interest in ice hockey.

This relocation is part of a larger trend of financial executives moving to Florida, a state seeing a significant increase in corporate relocations. Florida’s rise, along with Texas and Arizona, contrasts with New York, Washington, and California, where companies are increasingly moving out, reflecting a shift towards states viewed as more business-friendly.

According to hedge fund research firm Pivotal Path, 2024 is poised to witness the launch of 40 high-profile hedge funds by former portfolio managers from major investment firms. Veterans from several notable firms are initiating their ventures, aiming to leverage their past successes in the investment arena.

Industry insiders have said that this year’s figure will surpass the 26 launches from last year, suggesting a growing trend of seasoned executives seeking independence. The new funds will focus on a range of areas, including technology media, healthcare, and industrials.

The industry’s consolidation and the need for a strong pedigree are making it increasingly challenging for new entrants to attract investor interest. Despite a slight dip in investor appetite for early-stage launches, the demand for credit funds is rising, due to the high interest rates affecting the bond market. New funds like Parliament Holdings and Confido Capital are set to focus on credit investments, with aims to capitalize on distressed opportunities and multi-sector fixed income strategies, respectively.

Freddie Sizer, the former head of European physical gas trading at Freepoint Commodities LLC, has left the firm to launch a gas and power hedge fund. Sizer aims to begin fundraising later this year, with plans to debut the fund in 2025.

Sizer’s career in natural gas trading included stints at BKW AG and Vattenfall before his three-year tenure at Freepoint’s Zug office. His decision to resign aligns with a broader trend among commodities traders, who are moving towards establishing independent hedge funds amidst market volatility fueled by the transition from fossil fuels, weather-induced supply constraints, and geopolitical events.

Europe’s gas market has seen significant price fluctuations following Russia’s invasion of Ukraine, prompting increased activity from hedge funds. Despite a recent easing in price volatility, the market is expected to remain unstable until alternative supply sources fully compensate for the loss of Russian gas in 2026. Many hedge funds have responded by expanding their focus on European gas trading.

After nearly five decades of operation, Weiss Multi-Strategy Advisers LLC has announced its closure. This New York-based hedge fund was established in 1978 by George Weiss. The decision to shut its doors was articulated by Weiss in a heartfelt letter to clients and partners. It marks the end of a significant chapter in investment management. “Every journey has twists and turns, and after careful consideration of various factors and circumstances, I have arrived at the difficult decision to conclude this journey.”

At 81, George Weiss has overseen the careful winding down of the majority of client portfolios. The firm has been known for deploying diverse investment strategies through multiple teams. In leaner years it has displayed remarkable resilience and the ability to navigate market fluctuations. As of 2023, Weiss Multi-Strategy Advisers managed $3.1 billion and reported a 6% gain.

Weiss has long been a notable player in the hedge fund industry. The fund’s closure is reflective of a broader trend in the hedge fund sector, where investor interest has been generally receding, particularly for multi-strategy funds.

Investors in London are more pessimistic about U.S. natural gas prices than they’ve been since the early days of the COVID-19 pandemic. Although prices are at the lowest they’ve been since natural gas futures began trading in 1990, the experts have been betting that prices will drop even further. Recently, hedge funds and other financial players sold off a huge amount of natural gas in anticipation of falling prices.

Despite these low prices, stakeholders have failed to predict when prices would start to rebound. Prices continue to fall, partly due to mild weather from El Niño reducing the need for heating gas. With gas supplies remaining high in North America and Europe, investors face the risk of losing money unless there’s a clear sign supplies are dwindling.

Despite this bad news, shareholders are feeling more optimistic about oil. In one week, they bought a significant amount of oil futures, reversing their previous sales. This buying spree happened across various oil markets, suggesting a growing confidence in the oil sector.

In 2023, hedge funds experienced never-before-seen profits in the volatile debt market, particularly through catastrophe bonds (cat bonds). Cat bonds outperformed other high-risk fixed-income securities by delivering a 20% return, which is significantly greater than the 13% of high-yield US corporate bonds and the 4% of US Treasuries. This success has not attracted hedge funds as well as mainstream investors. Some institutions are now considering small allocations to diversify their portfolios.

Cat bonds were designed to protect the insurance industry from large-scale losses by transferring the risk to investors. Their recent resurgence can be attributed to an increase in weather-related events and the impact of inflation which makes it expensive to rebuild after a natural disaster.

Significant returns and the diversification benefits of cat bonds have drawn attention from mainstream institutional investors and wealth-management platforms, leading to an expansion in the cat bond market. The market reached about $100 billion by the end of the third quarter of 2023.

Investment in cat bonds, however, remains a niche market, with high risks and potential for losses when disasters trigger payment clauses. Yet, the current market trajectory and the possibility of continued returns suggest a growing interest in this strategy.

GCW Global Customised Wealth LLP (“GCW”) and Collwick Capital, LLC (“Collwick”) have officially solidified a strategic relationship, marking a significant move in fostering closer collaboration between the two financial entities.

The agreement entails GCW’s involvement in Collwick’s hedge fund investment program, allowing access to GCW’s proprietary analytical tools that specialize in risk assessment and ongoing investment performance evaluation.

Beyond this collaboration, both firms aim to synchronize efforts on various investment initiatives and projects beneficial to their interests. Notably, the partnership will see John Wickham, co-founder of Collwick, joining GCW’s Investment Committee.

Operating across London, California, and New York, GCW provides comprehensive wealth management services globally. Collwick, headquartered in Charlotte, North Carolina, specializes in hedge fund investment programs catering to qualified individuals and institutions.

David Bizer, Managing Partner and co-founder at GCW, expressed optimism about the collaboration’s potential, emphasizing the benefits it could bring to clients by leveraging Collwick’s expertise in hedge fund research. Meanwhile, John Wickham highlighted the opportunity for Collwick to gain insights from GCW’s proprietary performance software.

Siggi Thorkelsson, Managing Partner and co-founder at GCW, emphasized the collaborative potential for evaluating global investment opportunities resulting from the alliance with Collwick.

The alliance between GCW and Collwick signifies a strategic partnership aimed at maximizing investment potential and exploring avenues for mutual growth within the global financial landscape.

As AI takes the world by storm, many in the financial industry are concerned for their jobs.

A survey of employees in the banking and insurance world revealed that nearly 75% believe that AI is a threat to their jobs. 33% anticipate AI related layoffs of 30% in the next three years. 

Gary Collier, Chief Technology Officer of Man Group, issued a reassuring message to the Financial Times, “At least in the next five-10 years I don’t expect big technology job cuts due to the AI boom… People should not be scared of AI. If anything, we are planning to expand our team and are looking for software developers and engineers in particular to build our next generation of technology products,”.

Rather than cutting jobs due to the increased capabilities of AI, Collier maintains that the finance industry will continue to hire innovative individuals who can use AI to discover the next big things.

Collier explained, “The number of ideas that the firms have and their desire to build products based on AI technology are greater than the available pool of talent…the new AI talent is adding value to the firms and helping them build innovative products.”