Investors continue to plow money into hedge funds. Chicago-based industry tracker Hedge Fund Research reports that $21.5 billion in new capital flowed into the asset class in the second quarter, the largest quarterly total since the second quarter of 2014. This figure is net of total redemptions. For the entire first half of the year net inflows totaled $39.7 billion.
As a result, the hedge fund industry now boasts a total of $2.97 trillion. A majority of new inflows went to the largest firms — those with more than $5 billion. According to HFR, these firms received close to $29 billion in new money in the first half, accounting for about 71 percent of net new allocations. According to HFR, these largest firms manage 69 percent of total hedge fund industry capital even though they only account for 6 percent of the total number of hedge fund firms. Firms managing less than $1 billion — which account for 82 percent of all firms — received just $6 billion over the first half of the year.
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Richard (Mick) McGuire III’s Marcato Capital Management said in a regulatory filing that it owns 5.4 percent of Avis Budget Group. Interestingly the San Francisco activist hedge fund firm disclosed the position in a 13G filing, which suggests it is a passive investment. We’ll see how long this status continues. Despite the filing, the stock plunged more than 4 percent on Monday, to close at $42.30, just above its 52-week low and well below its one-year high of $69.76.
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Tiger Global Management’s venture capital arm has made yet another investment in a fledgling Indian company. The New York investment firm participated in the $15 million Series A funding round of Zo Rooms, which enables people to book a budget-priced hotel room with a cell phone application, according to The Economic Times in India. This is at least the sixth private investment made by Tiger Global this month alone.
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Now this is what you call consistency. Birch Grove Capital, a $700 million, New York–based firm founded in 2013 by Jonathan Berger, posted a 0.50 percent gain in June in its Birch Grove Credit Strategies Fund, boosting its return for the year to nearly 3 percent. This means the fund, which specializes in credit-related investments, has not lost money in all 23 months since its August 2013 inception.
“Our flexible mandate allows us to take full advantage of our diverse expertise during changing market conditions,” it states in its June report, obtained by Alpha. “Although we remain market neutral today, exposure will evolve as market conditions change.”
The fund maintains a low net exposure, according to the report. It tells clients that it recently began developing an energy trade “with a focus on idiosyncratic names, short-dated events, and what we believe to be creative trade construction.” Berger was previously president and chief investment officer of Stone Tower Capital, a $17 billion alternative credit asset management firm acquired in 2012 by Apollo Global Management.
