Welcome to Wall Street Insider, where we take you behind the scenes of the finance team's biggest scoops and deep dives from the past week.
Advertisem*nt
If you aren't yet a subscriber to Wall Street Insider, you can sign up here.
It was a busy week for hedge fund news, with the finance team landing scoops on an upcoming launch, a fund that's giving outside investors their money back, and one that's winding down entirely.
A new hedge fund run by a one-time minor league baseball player is set to spin off from billionaire Leon Cooperman's Omega Advisors, Bradley Saacks reported. New launches have been few and far between during the global coronavirus pandemic, though, as meetings with potential investors turned into video calls and business travel was cancelled.
Bradley and Alex Morrell learned that billionaire Philippe Laffont's Coatue Management is returning all outside capital in its $350 million quant fund. The fund, started roughly a year ago, had pulled back its exposure from the markets significantly in March and April. Coatue will continue trading the strategy with internal money, though, and hopes to eventually reopen it to outside investors.
Advertisem*nt
And Bradley, Dan DeFrancesco, and Meghan Morris reported that a $2.5 billion Tiger Cub emailed vendors on Tuesday evening to give notice that it has started winding down business operations and liquidating portfolios.
Valinor Management is closing — it's the first multi-billion-dollar hedge fund to wind down since the pandemic started
Keep reading to see the advice that value investors are giving each other after getting steamrolled by rising markets; a deep dive into the sports empire of Apollo Global Management cofounder Josh Harris; and a look at why live commerce could soon explode in the US.
Value investors, who seemed poised to take control during the initial market crash from the pandemic, have since been steamrolled by rising markets. For value-seekers, it's been emblematic of a decade of futility.
Rebecca Ungarino and Bradley Saacks attended a two-day virtual conference hosted by the New York chapter of the CFA Institute (the event is named after Ben Graham, the father of value investing.) Speakers flagged their picks in the quickly changing markets, and implored listeners to stick with the philosophy.
'This is so hard!': Inside a 2-day virtual conference for value investors struggling to make sense of markets
Influencers and home shopping
Visual China Group/Getty Images
Live-streamed commerce has taken off in China on platforms like Alibaba's Taobao Live and Douyin, China's version of TikTok. Influencers are driving sales of everything from cosmetics to tech products — think home shopping TV networks, but with check-outs embedded in the platforms and payment details stored there.
"It's entertainment plus shopping," Connie Chan, general partner at Andreessen Horowitz, told Shannen Balogh. And it could soon arrive in the US.
Related stories
Read the full story here:
Social media influencers are driving billions in sales in China with live-streamed commerce. An a16z partner explains why the US could be next.
Apollo cofounder Josh Harris' sports empire
Brad Barket/Getty Images; Nick Wosika/Icon Sportswire via Getty Images; Ruobing Su/Business Insider
The billionaire Josh Harris, who has cofounded a sports-investing business as well as one of the biggest alternative-investing firms, has been taking a look at buying the New York Mets.
Advertisem*nt
Meghan Morris and Casey Sullivan talked to insiders to learn more about how Harris has been applying an aggressive style honed at Apollo Global Management to the sports world.
Read the full story here:
Billionaire investor Josh Harris is vying to add the New York Mets to his sports empire. Tycoons, colleagues, and an NBA star reveal his playbook.
WeWork competitor Knotel is stretched thin
As Meghan Morris reports, Knotel's finances were in a tough position well before the pandemic hit, and now, the flexible-office company is stretched even thinner. Until recently, New York-based Knotel was one of the fastest-growing brands in the booming coworking and flex-space field, emerging as a chief competitor to WeWork.
Read the full story here:
Advertisem*nt
Leaked Knotel financials reveal that the WeWork rival had huge pre-pandemic losses and now has more unpaid bills than cash. It's a grim sign for the flex-office space.
Inside Airbnb-backed Zeus Living
Zeus Living, an Airbnb-backed startup that focuses on corporate housing, laid off almost two-thirds of its staff in three months and saw its valuation plunge.
As Alex Nicoll reports, the startup is now planning to shift its business model after clients cancelled millions in contracts and occupancy dropped.
Read the full story here:
After 2 layoff rounds and chaotic landlord negotiations, Airbnb-backed Zeus Living wants to shift its business model. Here's how the corporate-housing startup is plotting a way forward.
On the move
Wells Fargo has tapped Barry Sommers, the former CEO of wealth management at JPMorgan, as its new wealth and investment management chief. The post had been vacant since February. Wells Fargo CEO Charlie Scharf, who had a nine-year stint JPMorgan and had been viewed as Jamie Dimon's protégé, brought in Sommers as the latest in a string of JPMorgan alums he's hired since joining Wells last year.
Deals
Advertisem*nt
Hedge funds and investing
Billionaire-run hedge fund Schonfeld fired an executive assistant who added 'Black Lives Matter' to her email signature, saying she didn't get it approved properly first
How a huge investment in analytics is helping billionaire sports mogul Josh Harris find a competitive edge
Fintech
An IPO for mortgage giant Quicken Loans could make or break fintech valuations. 5 VC investors lay which startups may get the biggest boost.
IBM's new head of cloud says there's a $1 trillion opportunity in luring Wall Street firms and other holdouts onto the public cloud. Here's his plan to take on AWS, Google, and Microsoft.
Inside Ellevest: How a female-focused wealth firm founded by one of the most powerful women on Wall Street with $80 million in funding faces an uphill battle standing out in the crowded world of wealth
Law
We talked to 6 legal recruiters about the top hiring trends at major law firms if you're thinking of making a move in the middle of the recession
Real estate
WeWork is bringing corporate staff back to New York offices in 3 waves as the city enters the next stage of reopening. Here are the details the coworking giant just gave workers.
Home-financing startup EasyKnock is seeing surging demand. Its CEO reveals how it's adapting with a new marketplace for investors looking to put their money in residential property.
Australian investor Alfred Winslow Jones is credited with launching the first hedge fund in 1949 through his company, A.W. Jones & Co. Raising $100,000, he designed a fund that aimed to minimize the risk in long-term stock investing by short-selling, now referred to as the long/short equities model.
The easiest path to landing a job at any type of hedge fund is to work in banking for the first two years out of undergrad. During those years, make sure you develop a good reputation and try to be a top bucket analyst. You need to be very good at excel and have a strong grasp on valuation / modeling.
Modern hedge fund history began with Alfred Winslow Jones, a sociologist and journalist who wrote about market behavior in the 1930s and 1940s and founded one of the first hedge funds in 1949.
Yes, you could start with much less capital, or go through a hedge fund incubator, or use a “friends and family” approach, or target only high-net-worth individuals.
The 2 and 20 is a hedge fund compensation structure consisting of a management fee and a performance fee. 2% represents a management fee which is applied to the total assets under management. A 20% performance fee is charged on the profits that the hedge fund generates, beyond a specified minimum threshold.
Launching a hedge fund requires a tremendous commitment from the core team in terms of time, capital, and patience. Many start-ups are exceptionally skilled at investment strategy, but relatively few have built a business from the ground up. The most important part of any business is the people.
Billionaire investor Leon Cooperman said he remains a bear with little interest in the broader stock market, partly because it's underestimating the risk of a fiscal crisis.
In Leon Cooperman's current portfolio as of 2023-12-31, the top 5 holdings are Mr. Cooper Group Inc (COOP), Energy Transfer LP (ET), Apollo Global Management Inc (APO), Lithia Motors Inc (LAD), WillScot Mobile Mini Holdings Corp (WSC), not including call and put options.
In 1991, after 25 years of service, Cooperman retired from his positions as a general partner of Goldman, Sachs & Co. and as chairman and CEO of Goldman Sachs Asset Management. The next day, he launched Omega Advisors, Inc., a New York-based investment advisory firm that manages $5.2 billion in assets.
The carried interest loophole has long been used by executives of hedge funds and private equity firms to re-characterize their compensation and secure a lower tax rate or put off paying taxes indefinitely.
First, when a fund does not properly disclose that it will use leverage as a part of its investment strategy, the fund can be liable for investor losses. Second, a fund can also be held responsible for losses when the fund violates internal limits on the use of leverage.
While hedge funds are only lightly regulated and carry high inherent risks, funds of hedge funds are thought to offer security because professional managers are picking the hedge funds that make up the pools.
While most hedge funds use Equity Strategy, others follow Relative Value, Macro Strategy, Event-Driven, etc. You can also master these hedge fund strategies by tracking the markets, investing, and learning continuously.
What was his strategy? Wilson focused on buying growth shares, which he thought had more upside potential. To ensure he wasn't wiped out by a fall in the market, he took short positions in companies that he felt were overvalued.
Hedge funds are financial partnerships that employ various strategies in an effort to maximize returns for their investors. Unlike mutual funds managers, hedge fund managers have free reign to invest in non-traditional assets and employ risky strategies.
About Us. Capula is a global investment manager focused on innovative strategies that aim to exhibit low or negative correlation to traditional equity and fixed income markets. Our roots are in fixed income relative value, but our horizons have expanded to encompass macro trading, crisis alpha strategies and more.
Introduction: My name is Gregorio Kreiger, I am a tender, brainy, enthusiastic, combative, agreeable, gentle, gentle person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
