Hedge funds were back up in September and posted a 1.1% gain on average, according to data from Hedge Fund Intelligence.
While most strategies bounced back last month, Macro and Quant funds continued to struggle. Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB)’s Monthly Hedge Fund Trends report for September noted that demand for European-based hedge funds is rising as most interested clients look for equity long/short managers who have a successful track record. In the UCITS offerings, demand for macro-focused managers continues to rise.
Additionally, DB also pointed out the reversal of trends in emerging markets, which received their first inflows after 17 straight weeks of redemptions. DB also noted a decrease in net equity exposure by hedge funds, an observation that was also made by UBS in their monthly report.
Since Japan became the destination for the 2020 Olympics, the construction industry of the country is trending up. Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) says that the event is likely to boost profits of Japan’s construction, tourism and real estate industries. Across the globe, the best regional return that hedge funds have scored is still in Japan, the long/short strategy has recorded a gain of 20.5% through September. The Topix and Nikkei index recorded their first gains in the last month after losing for four consecutive months.
Movers in the telecom industry
After some major deals were brokered in the telecom space in Q3, the new quarter has started with more activity in South America. Portugal Telecom, which DB points out is a crowded short with 20% of float held in short bets, merged with Brazilian Oi.7, where Portugal Telecom owns 25%.
The news from Brazil comes in addition to the many M&A events, like Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) buying Kabel Deutschland Holding AG (FRA:KD8) (ETR:KD8) and selling Verizon stake, and Microsoft Corporation (NASDAQ:MSFT) buying Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s handset business.
German real estate in a boom?
Meanwhile, German real estate got a lot of media attention and saw some buying activity. Deutsche Wohnen made an offer to buy GSW Immobilien, which the latter accepted on October 14. Deutsche Wohnen AG (FRA:DWN) (ETR:DWN) made a $2.3 billion offer to buy the company in an all-shares deal. The shareholders of GSW have until October 30 to tender their holdings in the company and will be offered 20 shares of Wohnen for every 15 shares of GSW. While the deal would make Deutsche Wohnen AG (FRA:DWN) (ETR:DWN) the second-largest owner of apartments in Germany, things are not looking good for the German real estate company otherwise. Bundesbank has said that apartment prices in Germany are inflated by as much as 20% and a housing bubble is looking real, reports FT.
In a separate development, HedgeWorld’s Peter Dinkloh reported that Goldman Sachs’s Whitehall Fund and Perry Capital were selling 13.2% of LEG Immobilien, a German real estate company, after lockup expired. LEG debuted on the Frankfurt exchange nine months ago.