Several hedge funds closed up shop this year or returned capital to maintain their size, but at the same time there were some who took this year to launch new funds and increased their size with new staff. As the year is about to close, here is the round-up of what happened:
Hedge funds poach from SAC Capital
The woes of SAC Capital have made other hedge funds richer and/or stronger. Most recently, both CNBC and Bloomberg reported that Louis Bacon’s Moore Capital is looking to hire managers from SAC’s London office. Steve Cohen’s hedge fund, which has been embroiled in insider trading investigations, announced that it will close its offices in London by the end of this year. It appeared the out-of-work SAC managers are “selling like hot cakes” in the hedge fund industry, as many of the big money managers moved to hire them. According to CNBC’s Lawrence Delevingne, Moore was in talks with managers who had experience in long/short equity and macro trading.
Other than Moore Capital, BlueCrest Capital has already hired a few managers from SAC over the last six months.
Tiger cubs launch a bunch of new funds
A number of Tiger Management alums, also known as Tiger cubs, launched new funds this year. Steve Mandel’s Lone Pine Capital started a new fund, Lone Tamarack, which would use a long/short strategy. Lone Tamarack is set to begin business in January 2014 and will be seeded with an initial capital of $2 billion.
Philippe Laffont’s Coatue Management launched a long-only fund in 2013, an alternative investment vehicle which is getting more popular by day in the hedge fund industry. Tiger Global Management launched a long-only fund in October this year. Hound Partners, founded by Jonathan Auerbach, was also mulling over the idea of launching a long-only vehicle. Auerbach is not exactly a Tiger cub: Hound Partners was seeded by Tiger Management, he is not a Tiger alum however.
Raising new money
Between new hedge fund launches, a couple of firms also began raising money for new funds. Paul Singer’s Elliott Management raised $3.3 billion in new capital, that the fund intends to keep as dry-powder until an attractive opportunity set arises.
Balyasny Asset Management reopened its funds to new investments and also said that it plans to expand its staff significantly. Balyasny, a $3.3 billion hedge fund, plans to hire more analysts specifically with experience in Macro, TMT and Healthcare and generally in Asia, Commodities and European Equities.
Bayview Asset Management is planning to raise $2 billion for a real estate fund, reports Bloomberg. The new vehicle, Bayview Opportunity Fund IV, will invest in performing and non-performing loans and mortgage-backed securities.
BlackRock, Inc. (NYSE:BLK) is also in the process of raising new money; the asset manager will be raising $3 billion for a new hedge fund vehicle. The BlackRock Credit Alpha Fund will be using a credit long/short strategy to invest in assets globally. The fund was initially started with a target of $500 million.