Sender Hedge Fund Gains 30% Following the Crowd on RobinHood

Adam Sender seems to have hit on a great way to bet on winners in the stock market. Just watch what the numbers tell you on the popular stock-trading app called RobinHood. He says he gained 30% for his fund Sender Company and Partners so far this year following the most picked stocks on the trading platform.

RobinHood, the retail trading platform that has become even more popular during the coronavirus pandemic, probably because people staying home are looking for fun things to do that do not require a trip out of the house.

Some of Sender’s picks, which were based on the picks of the RobinHood crowd included Hertz, which found a fan club even as it was mired in bankruptcy during the year; Tesla, whose stock price has been skyrocketing faster than SpaceX rockets; and Nio, the fast-expanding Chinese electric car company.

Sender explained that the increase in day trading has contributed to “the late 90s type of environment I thrive on,” referring to the hi-tech stock price bubble that came at the end of that decade.

Sender was also invested in S&P 500 futures, NASDAQ futures, and some omnipresent tech giants such as Apple, Microsoft, Paypal, and Amazon.
The growth in tech stocks has helped fuel the overall climb in the stock market, with the NASDAQ closing at another record high in early August.

Hedge Funds on Rebound

Institutional investors began funneling money back into hedge funds during the beginning of the second half of 2020. After two years of the industry contracting, hedge funds are beginning to grow again.

According to a Bloomberg Mandates survey, half of the 50 respondents either increased their investments in hedge funds at the beginning of the summer or said they are planning to during the rest of the year. Hedge funds were the most popular alternative investment for those answering the survey, while Private debt had the second largest proportion of increased bets among a total of six distinct types of investment vehicles.

The survey is a relief from the news that hedge funds posted their ninth in a row quarter of net investments flowing out of the industry, in addition to mostly underperforming the rest of the market. During February and March many funds were able to come out relatively unscathed by the market downturn, but on average hedge funds fell more than the S&P 500 during the first six months of 2020.

Bloomberg Mandates conducted the survey from May 14 to June 10. Family offices and pension funds with over $500 billion in assets under management were included. The survey also found that new hedge funds were popping up all over the financial sector after many funds closed. The most popular ideas among survey respondents were to pitch a new fund and to reopen old, closed funds.

AI Quant Fund Realizes Growth Even as Market Slows

Quantumrock, the Berlin-headquartered quantitative hedge fund manager, has seen excellent returns while others are stymied in a difficult market. The company’s volatility-focused fund, Volatility Special Opportunities Program, (VSOP), grew by a juicy 9.87% in June, with a YTD of 36.16% growth. VSOP uses an equity futures-and-treasuries model designed around Artificial Intelligence trading throughout the market cycle.

“Although June experienced one of the worst days for stock markets on record, these incredible results clearly demonstrate the robustness of our AI systems and the extent to which they can inform our decision-making processes,” said Quantumrock CEO Stefan Tittel.

The firm was launched in 2012 as an AI investment technology manager previously known as RISE Wealth Technologies. It recently re-branded as Quantumrock in June 2020.

Fund Manager Druckenmiller Praises Fed’s Response to Covid

Stanley Druckenmiller, a veteran hedge fund manager, explained on CNBC that he was “humbled” by the strong performance of the stock market in late May, and admitted that he had underestimated the positive force the Federal Reserve was capable of exerting.

“I had long-term concerns for the last few years that because of easy money, too much debt was being built up in the corporate sector,” Druckenmiller said on “Squawk Box.” “When COVID hit, I was pretty much of the view that there was a good chance that the credit bubble had finally burst, and the unwinding of that leverage would take years.”

As a result of his worry, Druckenmiller missed the unique opportunity to realize substantial profits from an impressive rally in the market. From the moment the market reached its low point on March 23, the S&P 500 gained 40%. Compare that with Druckenmiller’s return during the same period of only 3%.

In mid-May, worried over the corporate debt bubble, Druckenmiller told the Economic Club of New York that the stock market was overvalued.

“The risk-reward for equity is maybe as bad as I’ve seen it in my career,” Druckemiller said on May 12. “The wild card here is the Fed can always step up their (asset) purchases.

Since he spoke in May the S&P 500 has risen over 11%. The Nasdaq Composite also performed well, becoming the first of the three major indexes to reach a historic high in early June.

Now Druckenmiller says he feels completely differently about the market today.

“I would say since that time, a couple of things have happened technically. I would also say I underestimated how many red lines, and how far, the Fed would go,” he said.

Hedge Fund Managers Hesitate to Return to the Office After Lockdown

According to a survey conducted by the Alternative Investment Management Association, about 67% of hedge fund managers are working exclusively from their homes, while about 25% are working mostly from home, as of June 1, 2020. The rest, which is about 8% of the 67,000 employees around the world at the firms which responded to the survey, are working from disaster-recovery centers.


Almost half of those asked said that the expect about 50% or more of employees to go back to their offices by November. About 20% think workers wont be back in their offices until January 1, 2021, at the earliest.


There is more optimism about hosting guests at their office buildings. About 75% of respondents said they expect to have guests at work beginning the fourth quarter of 2020. The same percentage said they do not expect to travel outside their countries for work before the end of the year, while about 67% think their companies will be taking a more flexible attitude to work from home as a regular option.


Respondents to the survey said that the major fears they have about returning to work are commuting to work via public transportation; the second wave of COVID-19; extreme restrictions required by federal and local governments; safety of important staff; and other risks connected to sick employees.

Pershing Square Gaining While Economy Stuggling

Bill Ackman’s Pershing Square Capital Management has been enjoying enviable growth just when the economy has been struggling with historically high unemployment and an unprecedented lockdown of people and commerce during the devastating coronavirus pandemic.

Public and private funds have seen double-digit growth between 22 and 27 percent so far this year, easily surpassing the Standard & Poor’s 500 index as well as the average hedge fund.

Ackman explained to investors on a conference call that his portfolio includes companies that can better withstand unpredictable events with serious consequences. He sold off his stake in Blackstone Group, Berkshire Hathaway, and Park Hotels & Resorts so to use the cash in better places.

In place of those shares, Ackman took stakes in Starbucks, Restaurant Brands International, Agilent Technologies, Lowes Cos Inc, and Hilton Worldwide Holdings. He said these large companies have the best technologies in place to make it through the crisis relatively unscathed.
The successful 2020 comes after a record 2019 where Pershing realized a 58.1 percent return, its best year since its founding in 2004.

Pershing Square was one of the first to close down its Manhattan office and have its traders and other staff work from home. When everyone else began to work from home, Ackman saw that as a signal that long-delayed home improvement projects were about to get started and ran to buy shares in Lowe’s.

“We bought Lowe’s at $84 a share and it was the bargain of a lifetime,” he said with the stock now at $127.62.

Tyr Capital Holding Its Own in Volatile Market

Newly launched crypto hedge fund, Tyr Capital Arbitrage SP, reported excellent, double-digit gains after just one year of investing.

Nick Norris, Ed Hindi, and Nick Metzidakis created Tyr Capital in January 2019 in London. The fund focuses on soft commodity and energy markets. Two of the three men, Norris and Hindi, worked together at Geneva Trading LLC and Hartree Partners LP. The partners divided the roles between them:

Norris is COO, Hindi is CIO and partner, and Metzidakis is Head of Quantitative Trading.

As of April 30, 2020 Tyr posted an 11% gain.

The firm uses Caspian Crypto Trading and Portfolio Management System to manage the operations of its cryptocurrency fund.

Tyr uses a short to medium term horizon strategy which does best in volatile markets, responding neutrally to either up or down markets.

According to CEO Nick Norris:

“We took our knowledge and our expertise from many years in the commodities markets and put them to use with digital assets as we saw the market evolving and institutional interest growing. Arbitrage strategies work extremely well when it comes to volatile markets. With the volatility seen during recent times, the volumes, and opportunities in the market for those who have the skill and know-how are substantial.

“Our investors, many of whom followed us from our time in the commodities markets, have really benefitted from our consistent performance and the diversification of their portfolios through digital assets.”

London Hedge Fund Offering Discount to Bring in Clients

Selwood Asset Management, a $3.5 billion hedge fund and one of the fastest-growing funds in London, has set up a seductive fee structure not seen since the last collapse of the financial markets.

The company will not take a share of the profits some of its new clients make until the net asset value of its main fund climbs back up to its previous high value. Selwood will allow new investors to hold on to all their profits until the fund gets back up to what is sometimes called the “high-water mark.

Specifically, it means the firm will not be taking a performance fee until the fund gains 8%. That is a big saving in fees, which usually range for Selwood from 13.5% to as high as 30% for its flagship fund.

Selwood wants to entice new money, as much as $250 million, so it can take advantage of new trading opportunities caused by the coronavirus market crash. New investors will have to be willing to give Selwood control of their money for a minimum of 12 months.

Selwood opened its fund in 2015 with $85 million, and now has an AUM of about $3.5 billion.

Hedge Fund Succeeds to Make Casino Profitable

Ever since Luxor Capital Group, a New York-based hedge fund, took control of a previously unsuccessful casino in Atlantic City, the casino has been thriving. So says the New Jersey Casino Control Commission, the agency that granted Luxor the final authorization to own a casino.

“There’s no doubt this property has turned around in so many areas,” Commissioner Alisa Cooper said.

When the casino was called Revel, it never was able to make a profit. It went bankrupt twice before it closed in 2014 along with three other Atlantic City casinos.

In January 2018, a developer from Colorado, Bruce Deifik bought the property and re-opened it in the summer of the same year. But again, the business foundered, and Deifik handed the casino over to Luxor, who had been one of his backers on the project, in return for forgiving the debt. Sadly, Deifik died in a car accident in April 2019.

Luxor got to work getting the casino up to speed, with an infusion of $70 million, $50 million of which was to pay down debt. New management was established with experience with Atlantic City markets, and they also fixed up some of the complaints about the property, including a poorly laid out casino floor and frightening escalators which were said to induce vertigo in some patrons.

The most important change seems to have been branding. As Revel the casino was described as a resort with gambling among its many amenities. Luxor changed that message to emphasize the casino as its real and main feature. Now Revel is called Ocean.

One of Luxor’s partners, Michael Conboy, told regulators that the hedge fund intends to own the casino for at least the next 25 years.

“Before the coronavirus, Ocean was self-sufficient,” he said. “Our budget for 2020 showed the company covering its expenses and generating free cash flow beyond that. We can debate what will happen when the city opens up. Long-term, the trajectory is still as positive as it was in February when it was incredibly positive.”

Survey finds Hedge Funds Growing

The most recent report of the International Organization of Securities Commissions (IOSCO) found that in the past two years since the last survey done in 2018, the value of the AUM of hedge funds has increased by almost 20%.

The report is done once every two years. This year’s report included 8.5% more hedge funds than in 2018, or 2,139, the most funds ever included in this survey since they started watching hedge funds in 2010. The improvement in the comprehensiveness in the survey is due to better reporting by national regulators.

Since 2018 the AUM of hedge funds grew by 19.5% to a total of $3.85 trillion, also a result of the greater number of funds included in the survey.

This year’s survey included for the first time the location of the funds and their preferred investment strategies. Most of the funds included in the survey are headquartered in the Cayman Islands (49%) and the United States (30%). European-based hedge funds made up a tiny fraction of the total included in the survey with only Ireland and Luxembourg having enough funds to even register, with 6% of the total.

The survey also found that most fund strategies are multi-strategy and long/short equity funds. Go here for the full report.