Tuesday June 28, 2016 www.bloombergbriefs.com Following Brexit, Clearbrook Plans to Add Funds INSIDE Alaska’s $53 billion wealth fund plans BY HEMA PARMAR Clearbrook Global Advisors is seeking to take advantage of market turmoil to exit all of its funds of hedge funds and following last week’s Brexit vote by boosting allocations to hedge funds. will instead make investment decisions in- The New York-based firm, which has $2 billion of its $28 billion invested in hedge house: From the Minutes funds, is looking to bring on at least two new managers in the next few weeks whose strategies could benefit from the fallout of Britain’s unexpected decision to quit the Computer-driven funds led the winners European Union, according to Tim Ng, its chief investment officer. Clearbrook currently following Britain's decision to leave the EU: Returns in Brief has 30 managers on its platform of direct hedge fund investments. Equity markets plunged and the pound fell to a three-decade low on Friday in the aftermath of the 52 percent to 48 percent vote to leave. Many hedge funds avoided Citadel hires Morgan Stanley's betting around the vote altogether, but several computer-driven funds that did profited Lieblich as chief technology officer. from the market turmoil. Mariner Investment's Co-CIO Williams Clearbrook is planning to add two distressed funds to its platform to take advantage of is leaving the firm: On the Move stocks hit in the market rout, Ng said in an interview on Friday. The firm will also raise its existing long-short equity fund allocation to 6 percent from 4 percent to benefit from New York Life Insurance's Private equity valuation spreads, which "have blown out quite dramatically," said Ng. Advisors is closing its low-volatility It also plans to reduce exposure to Europe-focused managers to 10 percent from 14 hedge-fund strategy: Closure percent, and to start allocating about 4 percent to emerging markets, which have become "increasingly attractive" following the U.K. vote, Ng said. Brexit will make Bill Ackman plans to move his firm to central banks even more dovish, causing inflation and interest rates to remain low, he Hell's Kitchen next year. Steven said. "That means the U.S. dollar shouldn’t really appreciate that greatly long term. It will Cohen's Point72 will move to New stabilize at some point," Ng said. "And all of those conditions tend to favor emerging York's Hudson Yards: Over the Hedge markets." Clearbook's allocation increase comes as hedge funds have drawn criticism this year Platinum Partners is said to be raided from investors for weak returns and hefty fees. Investors pulled a net $15 billion from by the FBI: Regulatory/Compliance hedge funds in the first quarter, the most since the financial crisis, according to Hedge Fund Research Inc. BREXIT QUOTES Managing the Brexit Turmoil “Years of aggressive Central Bank policies suppressed volatility across markets and this is now changing as macro and political risk begin to rise.” — Nigol Koulajian, founder and chief investment officer of Quest Partners "Biggest risk from this outcome: The Pandora's Box it opens for the European project." — Troy Gayeski, partner at SkyBridge Capital "I do think that there are the very strong societal and political and geographic ramifications, but I have trouble viewing it as a financial catastrophe." — Howard Marks, co-founder of Oaktree Capital Computer-driven hedge funds made money on Friday amid a global market chaos. For more on how hedge funds fared after Britain's unexpected vote, click here. RETURNS IN BRIEF: BREXIT June 28, 2016 Bloomberg Brief Hedge Funds 2 RETURNS IN BRIEF: BREXIT As more details emerged on how hedge funds fared following Britain’s surprise decision to leave the European Union, computer- driven funds led the winners. Human traders appeared to have limited losses by reducing risk. Below is a look at some of those returns. Officials for the hedge funds declined to comment on performance. BY NISHANT KUMAR AND SAIJEL KISHAN George Soros said he was betting on Evening Standard newspaper on Lynx Asset Management, which uses a rising pound leading up to the vote. In Wednesday. A spokesman declined to mathematical models to decide which the days before, Soros had warned that disclose the results of the poll. Another of securities to buy and sell, posted a 5.1 the pound could slump more than 20 the $10.2 billion firm’s funds, Absolute percent gain on Friday in one of its funds, percent against the dollar as voters were Return Focus, was up about 6 percent according to its website. Capital Fund grossly underestimating the true cost of Friday, due to short positions in equities Management, a $7 billion firm in Paris, Brexit. Soros made money on other and long positions in the U.S. dollar and gained 4.2 percent that day in its Discus investments that were designed to profit gold, according to e-mailed comments fund, while Systematica Investments, from falling markets, a spokesman said seen by Bloomberg. Odey had spoken in the $10.2 billion fund run by Leda Braga, Monday. favor of Brexit before the vote. His flagship fund Odey European was down gained 1.35 percent in its main Stone Milliner Asset Management, 24.8 percent this year through June 15. BlueTrend fund, people with knowledge the macro fund run by Jens-Peter Stein — Will Wainewright and William Canny of the matter said. and Kornelius Klobucar, lost 0.2 New York-based Quest Partners, a percent in the Class A shares, Series I Aspect Capital’s flagship $797 million quantitative hedge fund firm that version of its fund this month through Diversified Fund was up almost 4 percent managers $650 million, gained 1.6 Friday, according to an investor update. on Friday as of mid-afternoon, the $2.5 percent on Friday and 3.6 percent on It has lost 1.2 percent this year. billion Cantab Capital Partners Quantitative Fund rose more than 3 Monday in its flagship fund, AlphaQuest Discovery Capital Management LLC, Original Fund, according to a person percent, and the $12.8 billion Winton the macro fund run by Robert Citrone, Futures Fund gained about 2 percent, familiar with the matter. “We are entering posted a 0.5 percent gain for the month a new regime of higher volatility where according to people with access to initial in its Global Opportunity Fund through return estimates for the funds. prices are vulnerable to sharp reversals Friday and a loss of 2.5 percent for the and breakout of new trends,” said Nigol Spokesmen for Cantab, Winton and year, according to an investor update. Aspect declined to comment. Koulajian, founder and chief investment The fund said the highest conviction officer of Quest Partners. “Years of short wagers in its portfolio are in the UK — Will Wainewright, Nishant Kumar and Saijel aggressive Central Bank policies and European equity markets. “With a Kishan suppressed volatility across markets and Remain vote, we had believed risk Welton Investment Partners' Global this is now changing as macro and assets in general would have had a Directional Portfolio Fund rose 2.1 political risk begin to rise.” sharp rally over the next 3-4 weeks, from percent on Friday, according to a Quantitative Investment which a meaningful correction would company statement. The gain boosted Management, the computer-driven firm have unfolded,” the Connecticut-based the fund's return for the month to 6.6 based in Charlottesville, Virginia, gained firm said. “This surprising turn of events percent and 9.6 percent for the year 3.6 percent on Friday and 12 percent this has accelerated our roadmap that we through June 24, the $599 million month before fees in an equity strategy had for the August-October timeframe.” company said in the statement. that manages about $500 million, — With assistance from Sabrina Willmer, Will A global macro hedge fund overseen according to a person with knowledge of Wainewright, Hema Parmar, Simone Foxman by H2O Asset Management lost 14.4 its returns. The performance adds to a Crispin Odey, who had conducted a percent on Friday, according to data gain of almost 30 percent net of fees private poll ahead of the U.K.’s compiled by Bloomberg. The H2O Vivace during the first five months of this year. referendum, gained about 21 percent in fund, which bets across stocks, bonds, The firm’s main futures strategy, which his flagship hedge fund in the two days interest rates and currency markets, manages about $2.5 billion, also made after the vote, according to an e-mail to managed about 209 million euros ($232 money on Friday, bringing gross returns investors seen by Bloomberg News. million) at the end of May, according to a for June to 4.2 percent. Before this Odey European Inc. rose 15.7 percent document on its website. A month, it had gained 7.7 percent, net of Friday and 5.3 percent on Monday, the e- spokeswoman for the London-based fees, in 2016. mail said. The fund rose on Friday firm, an affiliate of Natixis Global Asset Man Group Plc, the world’s largest because of short positions that have Management, declined to comment. H2O publicly traded hedge-fund firm, reported been in place since last year, said a Vivace’s loss leaves the fund down 24.5 a 1.3 percent gain in AHL Diversified person familiar with the situation. Odey, percent for the year, after gaining 30.7 Programme and 0.9 percent rise in AHL 57, did not answer an e-mail seeking percent in 2015, according to data Alpha Programme.