PivotalPath

Some #hedgefunds are beginning to position themselves for a certain election outcome. But as Jon Caplis shares with Caitlin McCabe for the The Wall Street Journal, many are still hesitant to make bets that could jeopardize this year’s strong gains.   Hedge funds are up 8.3% in our Composite Index so far this year, and as Jon notes, “the incentive for any of them to make big bets on what still seems pretty uncertain, it just doesn’t behoove them or their investors.”   Check out the full story below.   https://lnkd.in/gdH6cfAN

Last week, Jon Caplis joined the AIMA - The Alternative Investment Management Association Global Investor Forum, alongside Diana Myint from BlackRock, Zarqaa Shaikh, CFA from OPTrust, Kadmiel Onodje, CAIA from NEPC, LLC and Brad Dunkley from Waratah Capital Advisors Ltd., to discuss #hedgefund performance in today’s environment, what allocators are looking for, and how managers are engaging with clients in new and creative ways. For those who weren’t able to join the event, PivotalPath is seeing continued outperformance with many funds experiencing double-digit returns over the past 12 months. Allocators are increasingly rewarding diversification, low-correlation, liquidity, and genuine alpha - making hedge funds an investment priority. Lastly, Jon shared some perspectives on how managers are creating strategic relationships with clients that go far beyond the traditional comingled fund structure. We’re proud to work with the AIMA - The Alternative Investment Management Association team and to continue providing unmatched clarity and transparency for hedge fund allocators.

As always, context matters. And in the case of Palliser’s push for changes in the increasingly valuable AI chip producer, SK Square, how does their YTD performance compare to the hedge fund industry at large?   We shared some numbers with Caitlin McCabe for the The Wall Street Journal, including an 8.2% rise in our #hedgefund Composite Index through September of this year. While we never share performance of any individual fund, having accurate benchmarks is crucial.   https://lnkd.in/ew8-MaAc  

How are #hedgefunds positioning themselves ahead of the election? And is it any different from years past?   Jon Caplis joined The Close on Bloomberg Television to share what #PivotalPath is seeing across 2,800+ institutionally relevant funds, collectively managing more than $3tn. Below is one of the highlights from a conversation that gave historical context to hedge fund investments leading up to presidential elections.   In short, this year’s run-in to November 5 has been very similar to previous election cycles with many funds ramping down their positioning in late Spring. However, currently macroeconomic factors – such as central bank policy, military conflicts in the Middle East, Chinese stimulus, and more – are all more likely to drive investment decisions than the final result of the US election.

  With less than a month to go until election day, many #hedgefund managers are taking a new approach: wait and see.   Jon Caplis shares some thoughts with Natalia Kniazhevich of Bloomberg on how Wall Street is approaching the election this year. #Hedgefunds are “waiting until there’s more clarity before making significant politically connected investment bets. It’s much easier to discern the investment impact of a #Fed interest-rate cut than a hazy statement from the Trump or Harris campaigns.”   As we also shared, the approach has worked so far this year; US long-short hedge funds have posted an 11% gain through September, which is in the top quartile of rolling nine-month returns since 2010.   #election2024 #interestrates   https://lnkd.in/e2krSR6a

We’ve been solving the issue of data quality within the #hedgefund industry for years. In many ways, hedge fund investors suffer from the same dearth of transparency and standardization as their private market investing peers.   Our CEO Jon Caplis sat down with Theo Normanton and explained the inherent issues accessing private market data including hedge fund, noting that:   -Databases that rely on private markets firms voluntarily inputting their performance metrics are susceptible to incomplete and inaccurate data -Funds have been reporting less and less over the years as the benefits to them have proven rare or nonexistent -When funds stop reporting or don’t provide enough info, data aggregators often fill in gaps, opening many questions around the integrity and accuracy of the data   So should investors just accept that opacity exists in private markets and that it’s the trade-off for alpha? One simple suggestion: Identify experts in the space that build relationships and trust with the GPs they cover, and view data quality as much more than a monthly transaction with any fund willing to participate.    Check out the full story below.   Eliot Raman Jones, Theo Normanton, Waterstechnology.   https://lnkd.in/ejCMKaWA  

“Any negative connotation of investing in outside managers has gone away.” Jon Caplis shares some perspective with Lydia Tomkiw around the high-quality #hedgefund launch environment, where the founders come from, and the primary investors fueling it - the multi-strats themselves.   According to PivotalPath data, 147 #hedgefunds have launched (or will launch) from the start of this year through the second quarter of 2025 - whose founders hail from hedge funds with more than $1 billion in AUM - 53 of them from multi-strategy funds.   Check out the full story below in Pensions & Investments   https://lnkd.in/et52_ZiX

On Fed Decision Day, PivotalPath CEO Jon Caplis joined Bloomberg Surveillance on Bloomberg radio to share his perspective on the #hedgefund environment in 2024 and more specifically how the Fed's interest rate cut will affect the industry going forward. Below is a clip of the conversation around interest rates. Please use this link to listen to the entire conversation: https://lnkd.in/e-p8dypC #Fed #interestrates

The September edition of the Pivotal Point of View is now available. The PivotalPath Composite Index was up 0.3% in August and +7.2% YTD. The Index continues to generate positive alpha of 5.4% relative to the S&P 500 (S&P) over the last 12 months as equity markets were mixed and volatile in August. Read the full report to gain insight on sector performance and other valuable intelligence.  Click below to go to our website and read the full PPOV. #research #hashtag #data #hedgefunds #markets

One of the defining trends in #hedgefund investing this year has been the growing demand for cash hurdles. As we get closer to Q4, how is this starting to impact fee agreements?   Some high-profile funds are beginning to change their fee structure in response. To provide some additional clarity on aggregated performance, we shared our latest numbers with Peter Rudegeair of the The Wall Street Journal. While we would never comment or share performance of funds on an individual level, our Composite Index has returned 7.2% through the end of August.   Three-month Treasury bills, by comparison, are currently yielding about 5%.   When it comes to cash hurdles, we agree they are an important tool to better align interests between GPs and LPs, and can serve as a benchmark to measure a manager's skill. We also believe that accurate indices add an additional dimension to help allocators in benchmarking the funds they invest with, and quantify their skill relative to their peer group.   Both play an important role in satisfying growing investor demand for greater transparency with the mechanisms to hold managers accountable that they are doing what they say they do and justifying their fees in the process.   Want to learn more? Check out the link below for the full story.   https://lnkd.in/e93HVfGK