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Brief: As firms brace for the financial impact of COVID-19, money managers and large banks with investment management staff, like Morgan Stanley, Goldman Sachs and T. Rowe Price Group, say they have no immediate plans to turn to layoffs amid the pandemic. For most firms it remains unclear how long this will be the case, however, as the coronavirus continues to wreak havoc on the economy and businesses, pushing U.S. unemployment claims to new highs. On March 26, Morgan Stanley CEO James Gorman told employees that there will not be a reduction in the workforce in 2020, according to an internal memo obtained by Pensions & Investments.
Brief: Ray Dalio’s flagship hedge fund at Bridgewater Associates ended the first quarter down about 20%, according to people with knowledge of the matter. Bridgewater extended this year’s decline after getting caught on the wrong side of the market sell-off that began in late February as a result of the rapidly spreading coronavirus. The firm’s Pure Alpha II strategy fell about 16% in March after posting smaller losses in the first two months of the year, said the people, who asked not to be identified because the information isn’t public. Dalio, who earlier this year urged investors not to miss out on an opportunity to benefit from strong markets, wrote in mid-March that the pandemic hit the firm at the “worst possible moment” because Bridgewater’s portfolios were tilted to benefit from a rise in the market.
Brief: Billionaire activist investor Christopher Hohn’s hedge fund suffered its steepest ever monthly decline in March as the global market turmoil hit his stock bets. The Children’s Investment Fund lost about 19% during the month, the worst since it started in 2004, according to people with knowledge of the matter. The decline pushed the fund’s first-quarter loss to about 23%, the people said, asking not to be identified because the information is private. A spokesman for the London-based investment firm, which managed about $30 billion before March losses, declined to comment.
Brief: Half a million of Bank of America Corp.’s 66 million customers have deferred loan payments because of financial fallout from the coronavirus. “The idea is to defer the payment, defer the impact,” Chief Executive Officer Brian Moynihan said in an interview Friday on CNBC. “We’re working with our customers who need help, who are losing their jobs. We have to preserve their ability to have cash flow.” The bank’s portal for small-business relief loans went live Friday morning and had 40,000 applications by the afternoon, according to a person familiar with the situation.
Brief: A Russian state fund called on Thursday for promoting dialog between Moscow and Washington, which is crucial in tackling the global spread of coronavirus, as Moscow stepped up diplomatic efforts on the global stage in fighting the infection… The Russian Direct Investment Fund (RDIF) said it was the fund that took up half the cost. The fund said it has been consistently calling for dialog between Russia and the United States. Relations between the two countries have been strained in recent years by matters ranging from Syria to Ukraine to U.S. election interference, which has been denied by Russia.
Brief: Citadel Securities this week opened an office in Florida to help ensure billionaire Ken Griffin’s giant trading firm can continue at full capacity during the coronavirus pandemic -- and cope with the explosion in volume the illness has spurred. The firm opened a new, temporary trading floor in Palm Beach on Monday with 24 people, according to a memo from the firm to employees seen by Bloomberg. The market maker debuted the facility two days before Florida’s governor announced astay-at-home orderfor the state of 21.5 million.
Brief: JPMorgan Chase & Co (JPM.N) Chief Executive Officer Jamie Dimon has returned to lead the largest U.S bank, after recovering from recent heart surgery, according to an internal memo to employees seen by Reuters. Dimon, who is working remotely due to the widespread lockdown caused by the coronavirus outbreak, had an emergency heart surgery on March 5 to repair a tear to his aorta. In an email to employees on Thursday, Dimon said he was “happy to be back to work this week”. “I have been recuperating well and getting stronger every day,” said Dimon, who is widely seen as the face of the U.S. banking industry.
Brief: Starboard Value is pushing ahead with its second proxy fight since the outbreak of the coronavirus, arguing its board nominees for GCP Applied Technologies Inc. would be better able to navigate the company through the crisis. The New York-based hedge fund run by Jeff Smith, which owns 9% of GCP, has nominated eight directors to take control of the chemical maker’s board. It plans to push ahead with the fight because it believes its slate of directors have the right skills to turn around the company, according to a regulatory filing Thursday. “We recognize the Covid-19 crisis has created a difficult environment for many companies,” Starboard Managing Member Peter Feld said in a letter to shareholders. “GCP is no different and needs strong leadership and oversight during these challenging times. We believe the nominees we have put forth are uniquely capable to help govern the company through and after this crisis.”
Brief: Amid a major market rout spurred by the coronavirus pandemic, one hedge fund has had outsized returns betting against companies hit hardest. Valiant Capital Management led by Chris Hansen has gained 36% year-to-date through the end of March, before fees, The Wall Street Journal's Juliet Chung reported Thursday, citing people familiar with the firm. In the same timeframe, US stocks have tanked — the Dow Jones Industrial Average lost 23%, its worst first quarter ever. The S&P 500 lost about 20%. The $1.4 billion fund was able to profit in the wreckage by placing strategic bets against leveraged companies that it saw being hit the hardest by the coronavirus outbreak. The hedge fund shorted stocks of cruise lines, international airlines, and travel companies, according to the report.
Brief: It could take up to six months for the global economy to recover from the downturn caused by the coronavirus, a leading market commentator has warned. But a recovery would only take place on two conditions: if mass testing of the virus is introduced, and governments guarantee to support demand, according to Nigel Green, chief executive of financial advisory firm deVere Group. His prediction comes the day after the United Nations released its latest trade report, according to which the world economy will go into recession this year with a predicted loss of global income of trillions of dollars.
Brief: Traditional asset management firms are expected to lose around a third of their assets under management as a result of the coronavirus pandemic, according to Fitch Ratings. The ratings agency projected an average decline in assets of between 29.9 percent and 36.9 percent for large, publicly traded U.S. firms, due to a combination of declining asset prices, fee pressures, and outflows. AllianceBernstein was projected to be the worst hit of the peer group analyzed by Fitch, with an expected AUM decline of 33.8 percent in the ratings agency’s best-case scenario.
Brief: Oaktree Capital founder Howard Marks believes the coronavirus pandemic could have a “much wider” range of negative outcomes than the 2008 financial crisis.In a newmemooutlining the potential economic repercussions associated with the virus, Marks sought to determine whether asset prices had fallen “appropriately, too much or too little” over the last few weeks. “In the last six weeks the markets have seen the best of times and the worst of times,” the Oaktree co-chairman wrote in the memo, released Tuesday evening.
Brief: The $3 trillion hedge fund industry is under pressure amid market turmoil prompted by the spread of the coronavirus. A wide dispersion of gains and losses is expected to emerge as firms disclose their returns for March. Below are some of the winners and losers. Dan Loeb’s Third Point posted losses in its flagship hedge fund last month, according to people with knowledge of the matter. The Third Point Offshore Fund dropped 11%, bringing its loss this year to 16% percent, said the people, who asked not to be identified because the matter is private.
Brief: Standard Chartered has made $1 billion (€0.9 billion) of finance available for companies able to provide ventilators, face masks and other goods and services to help fight the Covid-19 pandemic. Companies in scope include healthcare providers, along with manufacturers and distributors in the pharmaceutical industry. Companies in non-related sectors that can switch their production to support the fight against the virus and Standard Chartered said it is also trying to identify companies who are considering changing to, or adding anti-virus products to their production line, but have not yet said they will.
Brief: The lockdown of U.K. property funds has now put about 20 billion pounds ($25 billion) out of investors’ reach as the coronavirus pandemic batters the economy and makes valuation of assets nearly impossible. BlackRock Inc., Schroders Plc and Legal & General Group Plc are among the latest firms to freeze some funds, telling their institutional clients that withdrawals are halted indefinitely because of the outbreak, according to company statements. The suspensions of these funds for professional investors, which have about 9 billion pounds of assets under management, follow previous decisions by a range of firms to lock up about 11 billions pounds of mom-and-pop clients’ cash.
Brief: Lobbyists representing the private equity industry pushed the Trump administration and members of Congress to provide hundreds of billions of dollars in relief for businesses hammered by the spread of coronavirus. The American Investment Council, which lobbies on behalf of the private equity industry, spoke to congressional leaders from both sides of the aisle and Treasury Department officials, according to people with direct knowledge of the matter. These people declined to be named because the conversations were deemed private.
Brief: The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today announced that it has issued additional targeted, temporary no-action relief to foreign affiliates of certain futures commission merchants (FCMs) in response to the COVID-19 (coronavirus) pandemic. The relief expires on September 30, 2020. “The CFTC will continue to provide targeted, temporary relief to market participants where appropriate,” said DSIO Director Joshua Sterling. “This action bolsters our efforts to facilitate orderly trading and liquidity in our derivatives markets during this volatile period. We encourage market participants to engage with the CFTC early and often as market developments continue to unfold.”
Brief: Although some have opined that shareholder activism appears unseemly during a global pandemic, a new survey shows that investors think this mindset won’t last for long. A recent survey by Boston Consulting Group found that 59 percent of the investors it polled think activists are coming for companies amid the devastation caused by the spread of Covid-19 — and that management should do more than sit and wait. These investors also think companies should "take proactive steps to mitigate activism risk by strengthening their businesses’ near- and medium-term fundamentals,” according to the survey, entitled “Investor Pulse on the COVID-19 Crisis.”
Brief: Wall Street bank Goldman Sachs (GS.N) is offering employees 10 days of paid family leave to care for children or elderly parents who are at home during the coronavirus pandemic, according to a memo sent to staff on Tuesday that was seen by Reuters. Several banks have been extending extra paid time-off to employees, as the flu-like virus has shut down schools and forced many to stay at home.
Brief: Billionaire trader Steven A. Cohen is cautioning the staff of his investment firm, Point72 Asset Management, to remain cautious amid markets that have recovered slightly from coronavirus-driven lows. “Markets don’t come back in a straight line; after an earthquake there are tremors,” Cohen wrote to staff on Friday in an internal memo seen by Reuters. “We need to continue to be disciplined. We are seeing plenty of opportunities to generate returns, but I don’t want us taking undue risks.”
Brief: The European Union markets watchdog is considering leverage curbs on hedge funds and private equity funds to shore up financial stability as the coronavirus outbreak roils global markets.The proposal from the European Securities and Markets Authority (ESMA) could give more powers to countries like Spain, Italy and France - that have over the past week slapped bans on short-selling - a favoured trading strategy of hedge funds in particular.
Brief: Prophet Capital Asset Management LP, an investor in loans and structured credit securities hit by recent market turmoil, plans to temporarily block withdrawals from one of its hedge funds and ultimately dissolve it, according to a letter sent to investors on Monday seen by Reuters. “As you are no doubt aware, financial markets are experiencing extreme volatility and impaired liquidity as a result of the Coronavirus crisis,” Prophet executive David Rosenblum wrote.
Brief: As Covid-19 continues to create disruption across Europe, 195 institutional asset managers are appealing to companies to stay the course when it comes to maintaining staff and prudent cost management. The group, which includes such heavyweights like BMO, Aviva Investors and Nordea, has collective assets under management of $4.7tn. In an open letter, the group said the long-term viability of firms they invest in is closely linked to the welfare of their employees, suppliers, customers and the communities in which they operate.
Brief: A collection of 30 investor and sustainability focused groups have raised concerns in a letter to the Federal Reserve over potential conflicts of interest and lack of transparency and oversight in the recent agreement between the central bank andBlackRock. On March 24, the Fed announcedBlackRockas investment manager and adviser for three new programs aimed at supporting the U.S. economy amid the COVID-19 pandemic. Two of the three appointments relate to the Fed's new measures to ensure credit continues to be available to large employers: The primary market corporate credit facility, providing new bond and loan issuance; and the secondary market corporate credit facility, providing liquidity for outstanding corporate bonds.
Brief: SEC Chairman Jay Clayton said Monday that the practice of short selling — effectively betting that a stock will drop — is needed to “facilitate ordinary market trading.” “We shouldn’t be banning short selling,” Clayton told CNBC’s However, he said the Securities and Exchange Commission did replace the old uptick rule with a new measure to help mitigate the volatility that short selling can bring to an already agitated market like the one that investors have been dealing with for weeks now because of the coronavirus crisis.
Brief: JPMorgan Chase & Co.’s alternative-investments division is seeking to raise as much as $10 billion in an effort to bolster its spending power as the Covid-19 pandemic roils global markets. “The magnitude of these dislocations is so significant,” Anton Pil, the global head of alternatives for JPMorgan’s asset-management arm, said in an interview Monday. “And to get some of these markets functioning, you need a lot of capital.” JPMorgan plans to raise $5 billion to $10 billion “in the next couple of months” from clients including pension funds, sovereign-wealth funds, family offices and private banks, Pil said.
Brief: The chief financial officer of Jefferies Group LLC, Peregrine "Peg" Broadbent, has died from coronavirus complications, the company said in astatementSunday.Broadbent, who was 56-years-old, had served as CFO of the financial services company since 2007. The company has appointed Teri Gendron, CFO of Jefferies Financial Group, as the interim CFO and chief accounting officer ofJefferies Group(JEF)."For over a dozen years, Peg has been our CFO and partner, and helped us build Jefferies from less than half its current size, and navigate through hard times and good times," the company said. "He has also been a much-loved and respected leader to the incredible global team that provides the support, foundation and glue across our firm."
Brief: Losses at Izzy Englander’s $40 billion hedge fund were erased this past week as markets rebounded following unprecedented aid from the U.S. government. Millennium Management finished last week down 67 basis point for the month, compared with a decline of 5.1% a week earlier, according to a person familiar with the matter. That fund is now up 17 basis points for the year. Millennium Management and most other firms struggled in the first three weeks of March as the effects of the spreading coronavirus virtually halted the global economy and seized up markets from stocks to bonds to commodities. Then came unprecedented moves by the Federal Reserve and the promise of a $2 trillion stimulus bill that was signed by President Donald Trump on Friday.
Brief: After a brutal meltdown, some investors have been wading back into U.S. stocks. But others are wary of another leg down as the coronavirus spreads and its economic impact is difficult to predict. High-profile investors from BlackRock Inc (BLK.N) to billionaire William Ackman have turned more bullish on equities in recent days, as unprecedented stimulus from the Federal Reserve, a $2.2 trillion stimulus bill signed Friday, and a call by President Donald Trump to get the United States back to work in weeks rather than months sparked the biggest weekly rally in the Dow Jones Industrial Average since 1938.
Brief: Allianz Global Investors said on Friday that it had decided to liquidate a pair of hedge funds after suffering losses during the market turmoil of the coronavirus outbreak.The two funds are part of the money manager’s 27 Structured Alpha funds, the company said. The funds are private and Allianz Global Investors doesn’t disclose their performance or size. The investor said it decided it was in the best interest of investors to liquidate after “significant realized losses”.
Brief: Goldman Sachs and Morgan Stanley received regulatory approval on Friday to take control of their Chinese securities joint ventures, becoming the latest foreign banks to take advantage as China opens up its financial services sector. In separate announcements on Friday night, the American banks said the China Securities Regulatory Commission had approved their bids to own majority stakes in their securities joint ventures, Goldman Sachs Gao Hua Securities Company and Morgan Stanley Huaxin Securities.
Brief: It’s the most eventful 0.2% gain of Bill Ackman’s career. The billionaire investor entered 2020 long a handful of brand name companies like Berkshire Hathaway, Hilton Worldwide and Chipotle. But his $6.5 billion in assets firm, Pershing Square, weathered what was the quickest 30% market drop in a century after Ackman decisively hedged his portfolio from the coronavirus pandemic. In late February after weeks of fretting about the effects of the pandemic, Ackman paid $27 million in premiums to buy credit default swap insurance on investment grade and high yield bond indices, judging that their tight spreads were the most mis-priced way of playing the looming financial chaos. He was right. Financial markets went haywire in March and the hedges ultimately yielded a $2.6 billion payout for Pershing Square.
Brief: Norway’s sovereign wealth fund, the world’s largest, named a London-based hedge fund manager as its new chief executive on Thursday and said it had lost $124 billion (104 billion pounds) this year as stock markets tanked due to the coronavirus pandemic. Norwegian-born Nicolai Tangen, until now chief executive of AKO Capital, which he established in 2005, will take the helm in September, succeeding Yngve Slyngstad who announced his resignation last year.
Brief: Morgan Stanley CEO James Gorman told his employees that despite the upheaval caused by the coronavirus pandemic, their jobs will be secure through this year. “I am sure some, if not many, of you are worried about your jobs,” Gorman said Thursday in a staff memo. “While long term we can’t be sure how this will play out, we want to commit to you that there will not be a reduction in force at Morgan Stanley in 2020,” Gorman said. “Aside from a performance issue or a breach of the Code of Conduct, your jobs are secure.”
Brief: Roy Niederhoffer loves a good crisis. The 54-year-old hedge fund manager’s firm, R.G. Niederhoffer Capital, which manages about $350 million in assets currently, often does best when the stock market is at its worst. His Manhattan-based firm was one of the industry’s top performers during the past decade’s global financial crisis, and it is once again leading many of its peers in the market turmoil caused by the coronavirus pandemic. So far, his company’s flagship diversified fund, which invests in stocks, bonds, commodities, and currencies, is up 27% for the year, after fees, at a time when the overall U.S. stock market is down 30%. Its second fund, which trades only currencies and bonds, is up almost 18% after fees.
Brief: A dramatic increase in defaults during the next year due to the coronavirus will create a big opportunity for distressed debt investors, according to the world’s biggest publicly listed hedge fund firm. Money managers at Man Group Plc are intrigued by what they say could be the largest global distressed credit cycle in a generation. It all happened in just a month as the public health crisis rippled through economies all over the world, prompting a sell-off in sovereign and corporate bonds. That means even some stronger countries and companies could get caught up in the process, according to Patrick Kenney and Santiago Pardo, money managers at the firm’s GLG unit.
Brief: Hedge fund manager Paul Tudor Jones said Thursday investors should commend Washington’s policy response to the economic shock from the coronavirus pandemic. “Investors can take heart that we’ve counteracted this existential shock with the greatest fiscal, monetary bazooka. It’s not even a bazooka. It’s more like a nuclear bomb,” Jones said on CNBC’s “Squawk Box.” Jones said the actions from the Federal Reserve and Congress have brought “safety” to the economic system, even as COVID-19 spreads across the U.S. and disrupts daily life. “We did in two weeks what it took the Fed eight months to do in 2009,” the billionaire investor said. “Remember, we didn’t even get quantitative easing until well after the great financial crisis had started, well into the recession.”
Brief: Morgan Stanley (MS.N) and Citigroup Inc (C.N) have hit pause on layoffs as the coronavirus pandemic has led to a record level of unemployment claims and unprecedented economic uncertainty, according to sources. Morgan Stanley on Thursday pledged to not cut any jobs this year, according to a memo seen by Reuters, as the Wall Street bank sought to reassure worried employees during the coronavirus pandemic. Contents of the memo were confirmed by a Morgan Stanley spokesman. Citigroup Chief Executive Michael Corbat has also ordered a suspension of any planned layoffs, a source told Reuters. Further details were not immediately available.
Brief: “Please note,” the hedge fund firm’s website warns, “the Baupost partnerships are generally closed to new capital and do not actively solicit or market to prospective investors. But right now,Seth Klarman’s firmis making an exception, along with a number of other superstar managers who are typically impossible to invest with. The massive drop in asset prices catalyzed by the novel coronavirus pandemic has some elite hedge funds quietly shopping for extra capital to invest, sources say. In addition to Baupost, which managed $29 billion at the end of last year, The Children’s Investment Fund (TCI) has selectively reopened to additional money.
Brief: Jeff Talpins’s Element Capital Management is predicting that global markets are near a turning point and has begun betting on a sharp market reversal. The $15 billion hedge fund firm told clients it has started deploying cash and is taking positions on the prospect that equities will gain. Element is also shorting the long end of the interest rate market. In a note sent to clients Monday, the day before the S&P 500 bounced back with gains of more than 9%, the firm said the stimulus packages announced across continents to soften the economic blow from the coronavirus means the worst is over.
Brief: The coronavirus (Covid-19) pandemic is an unprecedented situation but it is important to recognise that, while the reduction in activity associated with coronavirus could be sharp and large, it is likely to rebound sharply when social distancing measures are lifted. In addition, in the intervening period, while activity is disrupted, substantial and substantive government and central bank measures have been put in place in the UK and internationally to support businesses and households. These measures, which have been evolving rapidly and could evolve further, are expected to remain in place throughout the period of disruption. Successful and sustainable businesses underpin our economy and society by providing employment and creating prosperity. Equity and debt capital markets play a vital role providing finance to these businesses and will aid the recovery. Governments and regulators around the world remain focused on keeping capital markets open and orderly.
Brief: Today, the Securities and Exchange Commission announced that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws, and that it is also extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19. In addition, the SEC’s Division of Corporation Finance issued today its current views regarding disclosure considerations and other securities law matters related to COVID-19.
Brief: The coronavirus pandemic is shutting down entire sectors of the economy and putting millions of Americans out of work, but one corner of Wall Street may find opportunity amid the carnage: private equity. The group, which includes investment giants Blackstone, Carlyle and KKR, has a record $1.5 trillion in cash ready to deploy and has been actively seeking deals across the struggling travel, entertainment and energy industries, according to a half-dozen investment bankers who declined to be identified to speak candidly about potential clients. “They have been waiting for this type of market dislocation,” the head of mergers at a major Wall Street firm told CNBC. “I don’t think they wanted something quite this bad, but they did want a pullback in valuation.”
Brief: Brevan Howard Asset Management’s flagship macro hedge fund is surging amid the ongoing market turmoil, on course for its best monthly gain since starting in 2003. The Brevan Howard Master Fund returned 17% in the three weeks through March 20, boosting its gain for this year to 21.6%, according to a letter to investors seen by Bloomberg. The firm’s best month so far was a 9.9% gain in January 2008. A spokesman for the Jersey-based investment firm declined to comment. The returns mark a turnaround for the hedge fund that’s seen assets plunge to $3.3 billion from its 2013 peak of almost $28 billion as clients exited following underwhelming returns.
Brief: The U.S. Federal Reserve has hired asset management giant BlackRock to help it execute the purchase of commercial mortgage-backed securities announced this week as part of the central bank’s aggressive efforts to shore up the U.S. economy.Over the past week, the central bank has released a volley of measures to boost liquidity in the financial markets and get cash into the hands of small businesses and consumers amid growing worries the coronavirus outbreak would wreak economic havoc across the country.
Brief: The UK’s Financial Conduct Authority last night (23 March) ruled out a ban on short selling, as many major hedge fund firms continue to weigh in with bearish bets to capitalise on the recent global market turmoil. The UK market watchdog said on Monday there is “no evidence” that short selling – a core component of most hedge fund strategies – had driven recent market falls, adding aggregate net short selling activity is low as a percentage of total market activity and has decreased in recent days. The notice comes as many well-known hedge fund firms including as Crispin Odey’s Odey Asset Management, Gladstone Capital Management, Man GLG, and Marshall Wace have made gains with successfully shorts in a range of names amid the recent downturn.
Brief: Bill Ackman said he has invested a portion of his personal wealth to help manufacture antibody testing kits produced by Covaxx, a newly formed subsidiary of closely-held United Biomedical Inc., amid the outbreak of the coronavirus. Ackman has repeatedly called for a complete shutdown of the U.S. for 30-days to help combat the spread of the Covid-19 virus. He has also called for antibody testing, like the one Covaxx develops, across the country to determine who has been contracted the virus. “The key to a successful reopening beyond the maintenance of social distancing, hand washing, mask use and other related practices is a broad-based testing regime and tracing program,” Ackman said in a letter on Wednesday to investors in his hedge fund, Pershing Square Capital Management.
Brief: If you’re already tired of the coronavirus lockdown and its subsequent trashing of the world economy, you have something in common withLloyd Blankfein, the billionaire former CEO of Goldman Sachs—especially if you’re itching to return the work and resume interacting with the public, as Blankfein would like you to do, as soon as possible. Over the weekend, presumably watching the value of his investments vanish—along with the savings andjobs of millions of “normie” Americans—Blankfein took to Twitter to suggest that, maybe, we don’t need to social distance that much after all.
Brief: President Donald Trump and Vice President Mike Pence held a call to discuss the coronavirus impact on the economy, according to sources. Investors on the call included Third Point’s Dan Loeb, Blackstone’s Stephen Schwarzman, Vista Equity’s Robert Smith, Intercontinental Exchange’s Jeffrey Sprecher and Paul Tudor Jones, hedge fund manager and co-founder of JUST Capital. The call with some of Wall Street’s top investors and hedge fund leaders was less focused on potential actions the administration could take to mitigate the impact of the novel coronavirus. Instead, it was more focused on how America’s top money managers are viewing markets and the U.S. economy, the people familiar with the matter said.
Brief: Citadel, the Chicago-based hedge fund giant led by billionaire Ken Griffin, has so far weathered the coronavirus market storm well, turning a slight profit in its flagship Wellington hedge fund for the year through Monday, according to a person familiar with the situation.The fund, which practices a so-called multi-strategy array of bets on stocks, bonds, commodities and other securities using teams of traders, was as of Friday down 5.25% for March, the person said, who requested anonymity because the information is private. The exact year-to-date gain, which is net of fees, was not finalized.
Brief: JPMorgan Chase froze hiring across most of the firm as millions of people stay at home to help stem the spread of the coronavirus, according to people familiar with the matter. The bank asked managers in businesses including the corporate and investment bank, the consumer unit, and the asset- and wealth-management group to review job postings and pull listings for roles that don’t need to be filled immediately, said the people, who asked not to be identified discussing the private plans.
Brief: Activist investor Bill Ackman said he has made a “recovery bet” on the economy, investing $2.5 billion in equities, including upping his positions in several of his portfolio companies and reinvesting in others like Starbucks Corp. The billionaire investor said he has taken off all the hedges that he put in place for his Pershing Square Capital Management, through shorts in the credit market. Those hedges were put in place to offset the effects of the coronavirus, he said. Ackman said his hedge fund has used the proceeds to reinvest over the past 10 to 12 days in several of his portfolio companies, including Lowe’s Cos., Hilton Worldwide Holdings Inc. and Warren Buffett’s Berkshire Hathaway Inc.
Brief: Germany quickly wants to get aid to companies struggling with the impact of coronavirus, Economy Minister Peter Altmaier said on Monday, adding that Berlin was ready to protect firms from unwanted takeovers with a new fund during the crisis. “Make no mistake, we’re determined to protect our companies and jobs,” Altmaier said during a joint news conference with Finance Minister Olaf Scholz, adding that this message was directed at hedge funds.
Brief: Short-sellers cannot be blamed for the rout in stocks and markets should be kept open during the coronavirus epidemic, regulators in Europe said on Monday. Europe’s STOXX 600 index has fallen to around a seven-year low as investors price a likely recession into markets after the virus shut down swathes of the economy.A handful of European Union states have introduced temporary curbs on short-sellers in a bid to quell volatility, fanning talk of a suspension across the market as the next step.
Brief: The head of Brookfield Asset Management Inc. said markets volatility created in the wake of the coronavirus pandemic is much more manageable than previous meltdowns. “For us, compared to the direct hit we took on 9/11, this uncertainty and volatility feels manageable,” Bruce Flatt, Brookfield Chief Executive Officer, said in a letter to shareholders Monday. “In 2008, with the banking system failing, real asset owners didn’t know if many lenders were going to exist in the future. Today, the banking system is in far better shape. It never feels very good to have this degree of chaos, but this will pass.”
Brief: With most of the sectors on a sharp downward spiral, the main consideration for most fund managers right now is the strength of a company’s balance sheet, according to Peter Toogood. The chief investment officer at Embark Group, who has the same role at The Adviser Centre consultancy, said the current crisis was "far worse" than 2008 because the whole chain of economic activity was broken. He said: “There has been an almost complete cessation of economic activity, no one has seen this before.
Brief: In coordination with the Council of Financial Regulators, ASIC will focus its regulatory efforts on challenges created by the COVID-19 pandemic. Until at least 30 September 2020, the other matters that ASIC will afford priority are where there is the risk of significant consumer harm, serious breaches of the law, risks to market integrity and time-critical matters. ASIC is committed to working constructively and pragmatically with the firms we regulate, mindful they may encounter difficulties in complying with their regulatory obligations due to the impact of COVID-19.
Brief: First they lost money. Now hedge funds want clients to risk even more cash on the bets that caused the pain. LMR Partners, Citadel, Baupost Group and Capital Four Management are trying to persuade clients to inject money into their funds after taking a hit in the coronavirus-fueled market turmoil. Capula Investment Management has had talks with some investors as it considers raising fresh capital, according to people familiar with the matter.
Brief: Goldman Sachs Group Inc (GS.N) poured more than $1 billion into two of its prime money-market portfolios this week due to heavy investor withdrawals, according to a filing with the U.S. securities regulator. The Wall Street bank purchased $722.4 million in assets from its Goldman Sachs Financial Square Money Market Fund (GPMXX.O) and $301.2 million from its Goldman Sachs Fund Square Prime Obligations Fund.
Brief: An employee of T. Rowe Price Group in Baltimore has tested positive for the new coronavirus and efforts to sanitize the Baltimore headquarters are underway, a spokesman said Friday. "We are in regular communication with this associate and are supporting them during this time,” said Brian Lewbart, a spokesman for the global money management firm. The company said it notified all of its employees of the positive case. It’s requiring all those who work near or who had been in direct contact with the employee to self-quarantine for 14 days, he said.
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