Brief: Lansdowne Partners is shutting its main hedge fund in a shift away from short-selling after being hit by some of its worst-ever losses. The London-based investment firm is closing the $2.8 billion Lansdowne Developed Markets Fund, according to a letter to investors seen by Bloomberg. Clients can withdraw their money or move it into the Lansdowne Developed Markets Long Only Fund or a new LDM Opportunities Fund, which will invest in early-stage companies. The firm will continue to bet against companies in some of its other funds. A spokesman for Lansdowne Partners declined to comment. The move marks a dramatic retreat by one of the world’s most famous equity long/short hedge funds, and comes after poor performance in both rising and falling markets. The firm’s main hedge fund is run by Peter Davies and Jonathon Regis and tumbled 13% in March’s rout, the biggest monthly decline since it started trading almost two decades ago. It was down 23.3% in the first half of the year, according to another letter to investors. Years of poor returns have led to outflows from the firm, with its assets dropping to $9.8 billion in June from a peak of nearly $22 billion in 2015.
Brief: Sloane Robinson is closing as it struggles to raise enough capital, joining a string of high-profile hedge funds to shutter in recent years. The firm, which began investing in 1994, will shut at the end of 2020 and wind down its Global Opportunities and Global Compounder portfolios, according to a letter to investors seen by Bloomberg. David Gale, chief executive officer of the London-based investment firm, declined to comment beyond the letter. “Despite strong investment performance amidst difficult market conditions, we have not succeeded in acquiring the required assets to support this franchise and the partnership remains dependent on revenue from the legacy funds of the founding partners,” the firm told investors in the letter dated Monday. Sloane Robinson, which was founded by Hugh Sloane and George Robinson and specializes in emerging and Asian markets equities trading, managed more than $10 billion at its peak prior to the 2008 financial crisis, but assets dropped sharply in recent years. In 2012, the firm restructured its business and investment-management team. It’s the latest victim of a tough money-raising environment by hedge funds. For much of the past decade, investors have revolted over high fees and lackluster returns. Clients have pulled more than $130 billion since the start of last year, according to data compiled by eVestment, and hedge fund liquidations in the first quarter jumped to the highest level in more than four years.
Brief: Private equity investors and bankers say they have seen deal activity start to slowly pick up in recent weeks after the coronavirus pandemic virtually stalled activity for more than three months. “There is a tangible change in the market sentiment,” said Daniel Connolly, managing director and co-head of mergers and acquisitions at William Blair & Co. “Most think there is an opportunistic window between now and the elections to buy and sell quality assets.” Investors are pushing deals closer to the finish line partly by modifying due diligence processes, pitching deals to only a limited number of reliable prospective buyers and buying minority stakes rather than control positions, several investment bankers, general partners and investment advisers told PEN sister titleWSJ Pro Private Equity. Some investors predict that deal activity will be buoyed as more firms report second quarter results, which will more accurately reflect the impact of the economic downturn. “That will help price the deals,” Connolly said. Michael Butler, chairman and chief executive of Seattle-based mid-market investment bank Cascadia Capital, said that buyers and sellers are reviewing deals in health care, technology, food and agricultural products, business services and some industrial sectors.
Brief: A hedge fund said to be closing up shop, a former fund manager’s family office, and a venture capital fund launched in 2015 are among the thousands of businesses listed as recipients of loans through the federal government’s Paycheck Protection Program. On Monday, the Small Business Administration made public a list of the more than 660,000 companies that received a loan larger than $150,000 through the program, which is intended to help businesses keep people employed during the coronavirus pandemic. If a company meets certain eligibility standards, part, or all, of the loan will be forgiven. The loans also carry a one percent interest rate, according to theSBA’s website. Some firms listed in the SBA’s data have called its accuracy into question, however. Electric scooter company Bird shared on Twitter that it was “erroneously” listed among loan recipients. According to Bird, the firm neither applied for nor received a PPP loan. One firm contacted byInstitutional Investor for this story experienced a similar issue: its CEO said via email Monday that the firm did not receive a PPP loan, despite being listed in the data. And three other firms listed in an earlier version of the story that did not respond to a request for comment or could not be reached for comment subsequently responded to say that they, too, had been listed in error.
Brief: Brevan Howard Asset Management’s flagship macro hedge fund lost 0.6% in June, suffering back-to-back monthly losses and giving up some of its record gains from March. The decline follows a 0.9% loss in the $3.8 billion Brevan Howard Master Fund in May, according to letters to investors seen by Bloomberg. Preliminary estimates from Eurekahedge show that macro hedge fund peers made money, on average, in both months. A spokesman for the Jersey-based investment firm declined to comment on the performance. Macro hedge funds, which bet on economic trends, have generally bounced back this year amid coronavirus-induced market volatility. Traders have been able to exploit big swings in bond and currency markets to make money. Brevan’s decline still puts its flagship fund up 21.3% in the first half of the year, according to one of the letters. If that return is maintained for the full year, it would beat all bar one annual return since the fund was launched in 2003. The firm, co-founded by billionaire Alan Howard, is rebounding from years of mediocre performance in its macro hedge fund. The master fund surged by 18.3% during the market turmoil in March, its best monthly gain, driven by interest rate trading across directional, volatility and relative value strategies in a range of different markets.
Brief: Marto Capital — aformer wunderkindfounded by an ex-Bridgewater Associates star — got approved for emergency funds from the U.S. government, records showed Monday. Katina Stefanova’s New York City-based firm would have received between $150,000 and $350,000 in potentially forgivable loans under the Paycheck Protection Program, which aims to help save small businesses hurt by the coronavirus pandemic. Marto did not confirm or comment on the loan.Notably, Marto retained zero jobs with the funds, according to the released data. Signature Bank approved its application April 28, per the official records.But it’s not clear what Marto Capital’s business actually is, or if it plans to repay any money received. Martogave upits active status with the industry’s main U.S. regulatory bodies. On its website, the company calls itself a “new age investment company.” Founded as a hedge fund firm in 2015, Marto attracted hundreds of millions in capital from brand-name seeding firms including PAAMCO Prisma. Stefanova became a sparkling face in the investment industry, running what many saw as a spin-out from one of the world’s most successful hedge funds, Bridgewater.