As markets collapsed, he stepped back into trading, helping the firm's flagship Quantum Endowment fund gain almost 10% in 2008. Soros was one of the few investment managers to foresee the global financial crisis that erupted last year. That made the firm the fifth-largest in the hedge fund industry, up from sixth at the end of 2008, AR said. Soros Fund Management had $24 billion in assets at the start of July, up more than 14% from the end of 2008 and more than 41% from a year earlier. The top hedge funds, like Soros Fund Management, are soaring while rival firms shrink: Keep that in mind, because when I tell you most of them are charging alpha fees for beta, that's exactly what they're doing. Shumway Capital Partners, run by Tiger Management alum Chris Shumway, bought 24.1 million shares and Timothy Barakett's Atticus Capital bought 26.9 million.Notice that these hedge funds did not "hedge" in the second quarter they took directional bets and bet on financials in a big way. The group of 30 hedge funds in the analysis increased their exposure to the financial sector by 56 percent to $59.5 billion (36.9 billion pounds) in the second quarter compared to the first.įilings showed at least five of the top funds bought into Bank of America, led by Paulson's purchase of 168 million shares. Positions in big financials such as Bank of America and JPMorgan Chase stood out among the holdings of hedge funds in the second quarter, according to a Thomson Reuters analysis of regulatory filings. Big banks have "breathing room," he said. "It's a fundamental bet that they won't go to zero, and that liquidity will come into the system" over time, said McGlynn, whose fund owns shares in Bank of America( BAC) and JPMorgan ( JPM). Low stock prices also made banks a safer play, even if their profitability was still in question, said James McGlynn, manager of the Calvert Large Cap Value fund. regulators that underscored the underlying health and viability of banks - if they could raise capital. ![]() The aggressive switch was given credence by stress tests conducted by U.S. The push into financials indicates that fund managers including Steven Cohen and John Paulson, who are watched closely as barometers of risk, have shifted from routine merger arbitrage plays to directional bets that have more potential. ![]() ![]() So where did the top hedge funds make money? Where else? According to Reuters, hedge funds bet big on Bank of America:Īt least 20 top hedge funds boosted their positions in financial institutions in the latest quarter in a sign that Wall Street is ready to bet on more risky sectors in the hope of longer-term rewards. They are buying the dips too, knowing full well there is a lot of performance anxiety out there. I am not a perma bear or a perma bull, I just concede to the fact that the banksters on Wall Street - the very same ones that manufactured this crisis - are printing money and they are flush with liquidity which they are using to trade away in their capital markets operations.Īpart from the banksters, you got their favorite clients, the Masters of the Universe, the elite hedge funds that are also making a killing in these volatile markets. While part of me agrees that this bear is not for turning, the world is awash with liquidity. "So what do you think?", he asked, to which I replied "as long as they keep buying the dips, this market is heading higher."įellow bloggers, you know I admire you, but sometimes I read stuff that makes my eyes roll back and want to hurl. A buddy of mine who is a broker typically calls me after the close to ask me my thoughts on the markets.
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