Brief: When Sachem Head Capital Management enters a new position, the stock normally doubles in two years. That was the largest return among 10 major activist investors, The Edge Consulting Group, a special situations research firm, told clients this week. A disastrous outlook for 2020 earnings is likely to put increased emphasis on value investing, said The Edge Chief Executive Officer Jim Osman… The study, entitled “King of the Activists,” tracked 15 years of shareholder campaigns by investors including Starboard Value LP, Blue Harbour Group LP and Icahn Enterprises LP, which respectively finished second, third and fourth in the rankings, behind Sachem.
Brief: The current difficult market environment will create fertile ground for private equity and hedge funds to boost their performance, according to JPMorgan Asset Management. Expected returns for cap-weighted private equity have risen to 9.80%, up 1 percentage point from the last forecasts issued Sept. 30, John Bilton, head of global multi-asset strategy, wrote in a note. The money manager’s projections “continue to be relatively aggressive for both hedge funds and private equity,” he said, and the pandemic-induced market volatility “actually reinforces our conviction that there is a good medium-term outlook for alpha generation.” “Dry powder on private equity balance sheets can be deployed now at lower entry multiples, broadly offsetting higher debt funding costs,” Bilton wrote.
Brief: Royal Bank of Scotland (RBS.L) chairman Howard Davies said on Wednesday the coronavirus pandemic had “changed everything” and its impact on society and the economy would likely be “stark and long-lasting”.In comments to investors at the bank’s annual investor meeting — held virtually to comply with social distancing rules — Davies said the sharp fall in the bank’s share price during the crisis made it unlikely the government would sell further stock in the state-backed bank soon.Chief Executive Alison Rose said the bank was doing everything possible to support its customers, many of whom were facing — and would continue to face — extremely challenging circumstances.
Brief: The Covid-19 crisis has highlighted the challenges of diversification, which is not an exact science, according to Allianz Global Investors’ Manuela Thies. Thies, who is head of multi asset active allocation retail at the asset manager, said the current scenario doesn’t need to become a special case for going into non-traditional areas, as investors should always be looking to expand and complement their holdings. ‘The use of diversifying asset classes like alternatives in portfolios for risk mitigation purposes should be a permanent goal,’ Thies said in emailed comments sent to Citywire Selector.
Brief: AustralianSuper has received "85,000 requests from members seeking early release of their retirement savings," the Melbourne-based industry superannuation fund said Tuesday. The initial tally — a week after Australians could begin applying for an initial A$10,000 drawdown of their retirement savings to help them through the COVID-19 crisis — represents over A$650 million ($413.2 million) in savings, a news release said. AustralianSuper said it had already distributed "over A$319 million to almost 40,000 members so far." The super fund reported A$180 billion in retirement assets at the start of February — before a spreading coronavirus battered markets globally. Shawn Blackmore, the fund's group executive for service and advice, in the news release said AustralianSuper wants to "help members who are in immediate financial need under the Federal Government's Early Access to superannuation program" but emphasized that withdrawals would come at a cost.
Brief: BlackRock is set to close one of its absolute return equity funds, Citywire Selectorhas learned. The fund, formally known as the BSF European Diversified Equity Absolute Return, was managed by Robert Fisher andSimon Weinberger. A spokesperson for the firm has confirmed to Citywire Selector that the fund will officially close on 2 June 2020. The BSF European Diversified Equity Absolute Return fund had €5m in assets under management in March and was originally launched in August 2010. Commenting on the liquidation, a BlackRock spokesperson said: ‘We recently completed a review of the BSF European Diversified Equity Absolute Return Fund as part of our continual evaluation process to ensure our range remains relevant. Taking into account its current size and potential client demand, we have decided to close it.’