Bloomberg Briefs

Friday March 10, 2017 March 10, 2017 The Long and the Short: How Managers Are Playing Upcoming Elections Elections in the Netherlands next week will set the tone for upcoming ballots in France and in Germany that will determine whether the voter anger that prompted the U.K.’s Brexit decision and brought Donald Trump to the White House is reverberating across mainland Europe. Here we take a look out how hedge fund managers are betting around this year's elections. Tepper Is Long Europe Stocks, Short Bonds Europe Good Investment After 'Dust Settles' David Tepper, the founder of Appaloosa There's value to be found in European risk assets Management, is betting long on European stocks in the infrastructure, energy, defense and despite the political risks with the upcoming financial sectors, according to Algebris French election. Investments. "It’s a probability game in Europe," Tepper said "Strong macro data and a recovery in corporate March 8 in an interview on CNBC. Valuations fundamentals make Europe a good investment there are "much much lower" compared with the Source: Algebris after the political dust settles," Alberto Gallo, Source: U.S. He doesn’t expect French presidential partner and portfolio manager, wrote in his latest Bloomberg/ Andrew Harrer candidate Marine Le Pen, a staunch nationalist report, released March 8. who advocates that France leave the euro, to win He pointed to three catalysts that can reprice European the election, though its outcome remains a concern, he said. assets: Marine Le Pen losing in France, a normalization in — Simone Foxman and Vincent Bielski monetary policy and a post-election opening of Germany to fiscal stimulus. Northlight Sees Rally in Europe HY Debt "While the reflation scenario is very well priced in U.S. assets, we think Europe's positive case is still contrarian and Improving GDP growth in Europe and diminishing undervalued," he said via e-mail on March 8. "We express that political risk will lead to a rally in European high- through upside exposure to inflation and assets linked to fiscal yield debt and triple C-rated bonds, according to stimulus (infrastructure, defense) and higher interest rates Charles-Henri Lorthioir, partner and portfolio (financials), while we are hedged against a rise in interest rates." manager at Northlight Group. — Melissa Karsh "The beginning of Trump's presidency has been Source: a bit chaotic to say the least," Lorthioir said on a Northlight telephone call on Feb. 28. "Europeans have been Amplitude Sees More Countries Leaving EU following the U.S. very closely, and may be a bit Karsten Schroeder, CEO of $1.7 billion more cautious to empower some of these more populist figures. Amplitude Capital, said the euro zone was They're starting to realize that running a country is a bit more "flawed" from the beginning and has caused a lot complex if you're a populist." of challenges for the individual member states. Geert Wilders, the leader of the Party of Freedom in the "When you run one single currency, you have Netherlands, is "no longer highlighting Trump in his campaign," to have a strong European Parliament, you have Lorthioir said. If this sentiment continues, "political risk will Source: to have common policies, [and] common Bloomberg TV diminish significantly, leading to a broader rally for European risk understandings when it comes to fiscal policy, assets," he said. when it comes to employment markets, when it The bonds should also benefit from improving GDP growth in comes to the overall economic stimulation," Schroeder told Europe, which Lorthioir forecasts will reach 1.8 percent this year Bloomberg TV March 9. "I don't think we have that agreement in from 1.7 percent in 2016. Europe. ... It's a matter of time when the euro as a currency is The Northlight European Fundamental Credit Fund, a long- getting weaker and weaker and more countries are going to short fund focused on high-yield credit and leveraged loans, is leave the euro zone." up 1.4 percent in the first two months of the year after a 0.5 There's a decoupling between Europe and the U.S., according percent gain in February, according to an investor letter seen by to Schroeder. The divergence in interest-rates policy and price Bloomberg Briefs. movements in the equity markets provides a "more attractive — Suzy Waite environment," he said. — Melissa Karsh Inside Lansdowne and Marshall Investor appetite for Western Numen starts a UCITS fund; RAM AI is long materials, Wace gained in Feb.: Returns Europe has fallen: Survey Millennium hires from Moore short consumer staples: Q&A Returns in Brief Hedge Funds Europe March 10, 2017 2 Returns in Brief Lansdowne Partners LP’s main February Returns hedge fund gained 4.6 percent in February, according to a performance update seen by Bloomberg Briefs. The $9 billion Lansdowne Developed Markets Fund has returned 1.6 percent so far this year, after losing almost 15 percent in 2016. A spokesman for the London- based firm declined to comment. — Nishant Kumar and Melissa Karsh, with assistance from Saijel Kishan Marshall Wace LLP's MW Europa Fund is up 1.7 percent in its U.S. dollar share class in February, bringing year-to- date returns to 1 percent, according to a performance report seen by Bloomberg Briefs. The MW Global Opportunities Fund rose 1.8 percent in its U.S. dollar Year-to-Date Returns Through February share class last month and is up 5 percent this year, the report said. The firm didn't respond to an e-mail seeking comment. — Darshini Shah and Nishant Kumar Castellain Capital's Castellain Value Fund rose 1.4 percent in February to bring year-to-date returns to 3.6 percent, according to a performance report seen by Bloomberg Briefs. The 34 million- pound ($42 million) fund, which is managed by Castellain founder Robert Goldsmith, returned 17 percent last year. A fund spokesman declined to comment. — Darshini Shah Funds in the charts not mentioned in the accompanying text on this page were reported in other Brevan Howard Asset Management’s issues of the Brief or in Bloomberg News stories. For questions, e-mail [email protected]. main hedge fund gained 2 percent last month to bring year-to-date returns to 0.5 after being notified of a phase 2 antitrust Och-Ziff Capital Management Group, percent, according to an investor letter review, detracted from performance. the $33.7 billion publicly traded hedge seen by Bloomberg News. The Brevan "After a relatively strong start to the year fund led by Dan Och, lost 0.2 percent Howard Master Fund managed $11 deal flow wise, this month was a bit of a last month in its OZ Europe Master Fund, billion in January. A spokesman for the disappointment as January’s deal flow according to public filings, dated March firm declined to comment. strength did not carry over into February," 2. The fund was up 1.8 percent in the according to commentary in the investor — Nishant Kumar first two months of the year, after gaining document. "While the spreads in many of 3.7 percent last year, the filing said. Oddo Meriten Asset Management's the newer deals remained too tight for — Melissa Karsh Orsay Merger Arbitrage Fund gained us, we found many investment about 1 percent in February, according to opportunities in some of the older RBR Capital Advisors AG's money an investor report seen by Bloomberg situations, which were volatile. This pool gained 4.6 percent in February, Briefs. The Paris-based fund was down allowed us to continue to manage the according to an investor letter seen by about 2 percent in the first two months of fund with a high leverage. We therefore Bloomberg News. An investment in GAM the year, after gaining 15 percent in continue to be optimistic on our ability to Holding AG contributed 1.85 percent to 2016, the report showed. Rite Aid Corp., deliver good performance for 2017." The the gains of RBR European Long Short Manitoba Telecom Services Inc. and fund has 274 million euros ($289 million) fund, the letter shows. The fund is down Actelion Ltd. had "notable" gains in the in assets. A spokesman for the firm 2 percent this year. A representative for month that benefited performance, the declined to comment. RBR confirmed the newsletter's contents. report said, while positions in Cabela's — Melissa Karsh and Nishant Kumar — Nishant Kumar Inc. and a small-cap stock, which sold off Survey Says... Hedge Funds Europe March 10, 2017 3 Survey Says... Investor Appetite for Western Europe Diminishes in 2017: Deustche Bank By Melissa Karsh North America Most Sought-After Investment Region Investor appetite for Western Europe has declined slightly this year, given uncertainties surrounding the U.K.'s Brexit plan, the forthcoming elections and an expected economic growth slowdown, according to a survey by Deutsche Bank. A net 17 percent of respondents said they would increase their exposure to the region, compared with 35 percent last year, when it was the most sought-after region, the survey released March 8 showed. North America was the most sought-after investment region this year. Deutsche Bank surveyed 460 investors with about $1.9 trillion under management or advisement. Other highlights of the survey were: Hedge fund clients predict withdrawals to the strategy. After the surprise report examining the survey results. from the industry will slow this year. outcomes of the U.S. election and the Fees are very much on investors’ Respondents forecast a net $1 billion Brexit vote in 2016, “the political road minds. Seventy-seven percent said they leaving the private partnerships in 2017.

Load more