Hedgeweek Features

Employee perceptions of diversity and inclusion efforts at hedge funds have dropped to their lowest level in four years, according to a report by Reuters citing Reboot Financial Services’ Race to Equality 2024 report released on Tuesday.

The report, conducted in partnership with research firm Coleman Parkes, highlights a decline in how financial sector employees view workplace actions to improve ethnic and racial diversity.

The report surveyed over 100 hedge fund employees in the United Kingdom, asking them to rate their workplace on various aspects of diversity and inclusion, such as recruitment, culture, leadership, training, and career progression. Hedge funds scored 64.3 out of 100, the lowest among financial sectors including insurance, pensions, asset management, and investment banking.

Insurance companies led the rankings, earning the highest diversity and inclusion scores, with pensions following closely behind. However, wealth management firms also saw employee perceptions decline to their lowest point since 2021.

The findings were part of a broader survey of 800 financial professionals conducted between August and September 2024. Respondents included 700 ethnic minorities and 100 white employees, each with at least 10 years of experience in the finance sector.

While two-thirds of employees reported being encouraged to contribute to building an inclusive workplace, nearly half said they faced pressure against advocating for racial and ethnic equality.

Some 40% of respondents were told to tread cautiously when raising diversity issues, while 45% of ethnic minority employees reported experiencing pressure to stay silent, compared to 35% of white employees, and 39% of all respondents observed efforts to “muzzle diversity advocates” over the past two years.

Baroness Helena Morrissey, chair of The Diversity Project, expressed concern over the findings. “With so little progress made to date and heightened racial tensions across the UK, it seems extraordinary that financial firms’ efforts to improve racial equality are diminishing or under threat,” she said.

The decline in diversity scores comes despite broader steps across the UK to address workforce inequality. Regulatory requirements, such as gender pay gap disclosures, have increased scrutiny on financial firms, exposing the sector as one of the most unequal in the UK.

Marshall Wace, the UK-based hedge fund major founded by Paul Marshall and Ian Wace, has adopted Bloomberg’s machine learning-powered real-time pricing data service, IBVAL Front Office, to enhance its systematic credit strategies, according to a report by FTF News.

IBVAL Front Office delivers updated pricing every 15 seconds for investment-grade and high-yield credit securities across USD, EUR, and GBP markets, providing a crucial edge in the liquidity spectrum, according to Bloomberg.

IBVAL employs advanced artificial intelligence techniques to generate precise, near real-time pricing for approximately 45,000 bonds, allowing users to access highly accurate estimates of a bond’s likely trading price.

The report quotes Eric Isenberg, Global Head of Enterprise Data Pricing at Bloomberg, as saying that: “Bloomberg has been utilising AI for over 15 years, and IBVAL represents our commitment to delivering innovative tools that enhance operational and trading efficiency. The near real-time speed of IBVAL’s pricing enables buy-side clients to actively manage portfolios, execute trades, and develop credit algorithms with greater confidence.”

Marshall Wace, which manages $69bn in assets, integrates IBVAL data for idea generation and pre-trade analysis, especially during pre-market hours when pricing high-yield bonds can be particularly challenging. The hedge fund’s global operations rely on a mix of quantitative, systematic, and fundamental strategies, primarily in long-short equity, supported by proprietary systems.

The US Treasury Department has launched an investigation into JPMorgan Chase over its dealings with a hedge fund allegedly tied to Iranian oil trader Hossein Shamkhani, raising questions about compliance with financial regulations, according to a report by Bloomberg.

The probe, which is still in its early stages, focuses on whether JPMorgan adhered to all applicable rules when it accepted Ocean Leonid Investments as a client. The report cites unnamed sources familiar with the matter as revealing that the hedge fund, which operates from offices in London, Dubai, and Geneva, and was recently suspended by Dubai’s financial free zone, is reportedly part of a network linked to Shamkhani.

Ocean Leonid’s alleged ties to the Iranian were first revealed in a Bloomberg report on 24 October, which also noted that JPMorgan, ABN Amro Bank NV, and Marex Group had provided leverage to the firm.

Spokespeople for JPMorgan, the US Treasury, and Ocean Leonid have declined to comment, while Shamkhani did not respond to a request for comment through his lawyer.

In a previous statement, an Ocean Leonid representative denied allegations of Shamkhani’s involvement, asserting that the hedge fund categorically rejects any claims of his oversight. Shamkhani’s lawyer similarly denied any relationship between his client and Ocean Leonid.

Currently, there is no obligation for JPMorgan to terminate its relationship with Ocean Leonid, as neither Shamkhani nor the hedge fund appears on any US sanctions lists. However, the Treasury is keenly interested in Shamkhani’s activities and is exploring the potential for compliance lapses by the bank, according to sources.

The Federal Reserve is also examining Western financial institutions’ exposure to Shamkhani’s network, although a Fed spokesperson declined to comment.

Shamkhani’s father, Ali Shamkhani, a key adviser to Iranian Supreme Leader Ayatollah Ali Khamenei, was sanctioned by the US in January 2020. The sanctions cited his prominent role in shaping Iran’s defence policies and coordinating intelligence and economic activities in alignment with the Supreme Leader’s directives.

GCQ Funds Management, a Sydney-based hedge fund with an impressive annualised return of 30% since its 2022 launch, is betting on Japan’s burgeoning cloud accounting market as its next major growth driver, according to a report by Bloomberg.

The firm recently increased its stake in Money Forward, a small-cap stock it believes could quintuple in value over the next five years, fuelled by regulatory shifts requiring businesses in Japan to maintain electronic receipts.

At the same time, GCQ has exited positions in rating giants Moody’s Corp and S&P Global, citing diminished upside potential as investor expectations caught up with their robust performance.

The hedge fund’s strategy revolves around investing in sector-dominant companies with strong pricing power — a key advantage in today’s inflationary environment. Visa and Alphabet alone make up significant portions of the fund, with newer investments like Money Forward representing less than 5%.

“This is the first time a new company has passed our investment checklist in over three years,” said Doug Tynan, GCQ’s Chief Investment Officer and co-founder, in an interview. “Cloud accounting software is exceptional because these companies often operate as local monopolies.”

Tynan shared that the decision to invest in Money Forward was years in the making. The firm had been monitoring the company for nearly eight years but refrained from investing until it met their cash flow requirements. The turning point came earlier this year when one of Money Forward’s main competitors implemented a significant price hike, signalling a shift in market dynamics.

GCQ’s concentrated portfolio of around 20 stocks is designed to capitalise on the changing outlooks of dominant players. Tynan revealed that half of the fund’s outperformance comes from actively trading these stocks based on evolving industry conditions.

As of October, the fund had allocated about 13% of its holdings to Alphabet and Meta Platforms, and nearly 20% to payment giants Visa, and Mastercard. According to its latest investor letter, the fund has delivered net annual returns of 30.2% since its inception.

Two Sigma Investments, one of the world’s leading quantitative hedge funds, is laying off approximately 200 employees following a comprehensive review of its operations by its new Co-Chief Executive Officers, according to a report by Bloomberg.

The dismissals, representing about 10% of the firm’s 2,000-strong workforce, affect roles across corporate, engineering, modelling and trading, and securities departments. Portfolio managers were not included in the cuts, according to an unnamed Bloomberg source familiar with the matter.

The restructuring marks the first significant action by co-CEOs Carter Lyons and Scott Hoffman, who assumed leadership in September after the firm’s billionaire founders, John Overdeck and David Siegel, stepped down from day-to-day management amid escalating tensions.

Overdeck and Siegel, who co-founded the firm in 2001, remain chairmen and retain their equity stakes. However, their strained relationship led to a historic management overhaul, with the discord flagged as a material risk in a March 2023 regulatory filing — a rare disclosure for a hedge fund as secretive as Two Sigma.

The internal challenges have not derailed the firm’s performance with its Absolute Return Enhanced Fund, the largest by assets, gaining 11.2% this year through mid-November, according to a source. Two Sigma’s total assets under management have reached a record $64bn.

President-elect Donald Trump has nominated Scott Bessent, the founder of hedge fund Key Square Group, as Treasury secretary, signalling his preference for a seasoned financial expert and loyal ally to oversee US fiscal policy and economic strategy, according to reports.

Bessent, 62, who Trump has previously described as “brilliant”, was a leading contender for the role alongside former Federal Reserve Governor Kevin Warsh and private equity executive Marc Rowan. If confirmed, he will step into a pivotal role, navigating the nation’s economic landscape amid a growing economy, rising debt, and significant fiscal challenges.

In a statement, Trump hailed Bessent as “one of the world’s foremost international investors and economic strategists,” describing his career as emblematic of the American Dream. Trump emphasised Bessent’s alignment with his economic vision, including support for tariffs, deregulation, a revival in manufacturing, and energy independence.

In a statement, Trump said: “Scott will support my policies to drive US competitiveness and end unfair trade imbalances.

“Unlike in past Administrations, we will ensure than no Americans will be left behind in the next and Greatest Economic Boom, and Scott will lead that effort for me.”

Bessent’s hedge fund, Key Square Group, launched in late 2015 with $4.5bn, making it one of the largest hedge fund launches in history at the time—including a $2bn investment from George Soros, the legendary macroeconomic investor, for whom Bessent had previously helped generate billions during two tenures at Soros Fund Management.

Key Square’s debut year, 2016, saw its main fund surge by 13%, which the firm gained by correctly predicting the British pound’s decline following the Brexit referendum, according to sources familiar with the fund. Later that year, Bessent also capitalised on a US stock and dollar rally after Donald Trump’s election victory.

Despite its promising start, the fund faced challenges, losing 7% in 2017 and then seeing flat or negative returns between 2018 and 2021, according to disclosures from the New York City Police Pension Fund, an investor in the fund. However, Key Square rebounded with double-digit gains in both 2023 and 2024 and has posted overall double-digit growth since inception, according to a source familiar with the performance.

The firm’s uneven returns seem to have deterred many investors with assets under management (AUM) falling sharply from a 2017 peak of $5.1bn to just $577m by the end of 2023, and the number of institutional investors shrinking from 180 in 2017 to 20 by 2023, according to regulatory disclosures.

While Key Square’s hedge fund AUM has diminished, the firm has expanded into other areas, including providing investment ideas to other money managers, managing up to $1bn for a large macro investment firm, and running an advisory business for family offices, foundations, and endowments, including one client with $11bn in assets.

The firm collects fees from Ghisallo Capital, a $3.4bn spin-out incubated by Key Square.

As Treasury secretary, Bessent will be central to advancing Trump’s economic agenda, advising on fiscal policies and managing the US government’s financial challenges. These include a national debt exceeding $36tn, an annual deficit nearing $2tn, and debt service payments projected to hit $1.2tn by fiscal 2025.

Bessent will also oversee financial institutions, combat financial crimes, and spearhead economic policies aimed at bolstering US competitiveness. He will succeed outgoing Secretary Janet Yellen, the first woman to serve as both Treasury secretary and Federal Reserve chair.

The Securities and Exchange Commission (SEC) has been dealt another significant defeat in its regulatory push after a Texas federal judge overturned a rule requiring certain firms to register as dealers in the US Treasuries market, according to a report by Bloomberg.

US District Judge Reed O’Connor in Fort Worth ruled in favour of hedge funds that had sued to block the SEC’s rule, arguing it was overly broad and could harm market liquidity by discouraging trading. O’Connor stated that the SEC had exceeded its authority, calling the agency’s actions “unlawful.”

The ruling comes at a pivotal moment for the SEC, as its chair, Gary Gensler, announced plans to step down in January. His tenure has been marked by contentious regulatory efforts, including actions on cryptocurrencies and private funds, which critics argue stretched the agency’s jurisdiction. President-elect Donald Trump had previously vowed to dismiss Gensler.

The SEC has not yet indicated whether it will appeal the decision. If it chooses to do so, the case would head to the 5th US Circuit Court of Appeals in New Orleans, a court that recently invalidated another SEC rule aimed at increasing fee transparency for hedge funds and private equity firms. The SEC abandoned its legal challenge in that case.

The overturned rule was part of an effort by the SEC to expand its oversight by labelling certain hedge funds and trading firms as dealers, subjecting them to stricter regulatory scrutiny and higher compliance costs.

The Managed Funds Association (MFA), Alternative Investment Management Association, and National Association of Private Fund Managers had collectively challenged the rule, arguing it ignored the fundamental differences between dealers and asset managers.

Diego Megia, the Chief Investment Officer at hedge fund Taula Capital Management, is optimistic about the potential of EU bonds despite recent challenges facing the bloc’s joint-debt issuance programme, according to a report by Bloomberg.

Speaking at the Sohn London Investment Conference on Wednesday, Megia highlighted what he sees as a compelling investment opportunity in these securities.

“The bonds are undervalued compared to similarly rated sovereigns,” Megia stated, predicting that spreads could tighten by as much as 40 basis points if the bonds are reclassified into major sovereign bond indexes.

The EU has been actively lobbying index providers to classify its bonds as sovereign debt, a change that could significantly enhance its attractiveness to investors. While MSCI and ICE have declined to make the adjustment, Bloomberg Index Services Limited is currently reviewing the proposal.

Taula Capital Management launched earlier this year with $5bn in assets, including $3bn in backing from Millennium Management. The fund focuses on macro strategies, fixed-income relative value trades, and inflation-risk opportunities.

Megia, a former senior trader at Millennium, sees the EU bond market as poised for growth, especially if the securities gain broader acceptance among global sovereign bond investors. “This is an opportunity for investors,” he reiterated, underscoring his confidence in the bonds’ potential to deliver value.

Redwood Capital Management, an opportunistic credit-focused hedge fund with $9.4bn in assets under management, is preparing to raise $2.25bn for a new distressed debt drawdown fund, according to a report by Bloomberg.

The report cites an investor letter seen by Bloomberg as revealing that the fund will focus on distressed and special situation investments.

The move follows strong performance from Redwood’s previous drawdown fund, which has achieved a 31.6% net internal rate of return (IRR) in 2023 and a 17.4% IRR since its launch in 2021. The firm attributes these results to opportunities arising from market disruptions like the Ukraine war, rising interest rates, and inflation. To date, Redwood has deployed 50% of that fund’s capital.

For its upcoming fund, Redwood plans to increase the size of its investments, aiming to secure greater influence in the contentious restructuring negotiations that have become increasingly common in the distressed debt landscape. This approach is designed to address what the firm describes as “adversarial creditor transactions” and aggressive liability management practices, which have emerged following years of low interest rates and weaker debt protections.

“By holding larger positions, we can better defend our rights and influence outcomes,” wrote Ruben Kliksberg, Redwood’s co-chief investment officer, in a 21 October letter to investors.

The global market for distressed debt remains challenging, with Bloomberg’s tracker estimating just over $500bn in distressed assets, near the lowest levels of 2023. Despite this, distressed-debt hedge funds have performed well, with an average return of 11.1% this year, according to PivotalPath data.

Founded in 2000, Redwood’s master fund — focused on distressed and stressed credits — has delivered a 16.2% net return year-to-date for its main series, based on October-end figures. Meanwhile, the firm’s opportunity fund, which manages $2.4 billion, reported a 12.5% return for the same period.

The new drawdown fund is expected to close on 16 June, 2025, with investments set to begin the following month.

Spain’s High Court has launched an investigation into US-based hedge fund Gotham City, accusing it of disseminating “misleading” information about Spanish pharmaceutical firm Grifols, which triggered a sharp decline in the company’s stock price, according to a report by AFP.

The probe centres on a research note released by Gotham City in January 2023, which accused Barcelona-based Grifols of manipulating financial data to artificially lower its debt ratio and financing costs. Grifols, known for its blood plasma-based medicines, saw its shares plummet by nearly 25% following the report. The company has consistently denied the hedge fund’s claims.

According to the court, Gotham City may have violated market and consumer protection laws by distributing “biased and misleading” information to encourage investors to sell Grifols shares. The fund reportedly earned a profit of more than €9.4m ($9.9m) by short-selling Grifols stock after publishing the report.

Gotham City, a prominent short-seller, has targeted several high-profile companies in recent years, with its tactics having previously contributed to corporate collapses. In 2014, Spanish Wi-Fi provider Gowex went bankrupt following Gotham City’s damning report on its financial practices.

The court’s investigation into Gotham City follows significant fallout for Grifols, including major management changes. The company appointed a new CEO and CFO earlier this year as it worked to rebuild investor confidence.

In July, the Grifols family — owners of roughly a third of the company — and Canadian investment fund Brookfield began discussions to take the pharmaceutical firm private. On Tuesday, shortly after the court announced its probe into Gotham City, Brookfield proposed a tentative, non-binding €6.45bn bid to acquire Grifols, offering €10.50 per A share, which Grifols swiftly rejected on the basis that it “significantly underestimated” the company’s long-term potential and financial outlook. The firm’s stock last traded at €10.40, down 4.6% on the day.

Activist investment firm Gatemore Capital Management has used the 2024 Sohn London Investment Conference to publicly call on YouGov, a market research and data analytics company, to initiate a sale process to unlock shareholder value.

According to a press statement, the firm believes that despite YouGov’s many strengths, mismanagement and a lack of strategic clarity have left its share price significantly undervalued.

YouGov, headquartered in London, is a pioneer in online market research with a proprietary data panel of 29 million individuals spanning 55 countries.

Gatemore highlighted several key attributes supporting the company’s potential for long-term growth, including its unique data panel, which it regards as a difficult-to-replicate asset that creates high barriers to entry.

In addition, Gatemore highlighted YouGov’s global reach with diversification across sectors and geographies, and exposure to high-growth markets, as well as its revenue model which sees over 50% of sales coming from a “survey once, sell many times” model, enhancing operating leverage.

Gatemore also believes fragmentation in the $142bn insights industry presents consolidation possibilities.

YouGov has a 15-year track record of revenue growth, margin expansion, and robust free cash flow of – 70% operating FCF over the past five years. Despite these strengths, the company’s shares are down 70% from their 2022 peak and trade at valuations far below industry averages.

Gatemore attributes the decline to several missteps by YouGov’s management, including insufficient and delayed updates on financial performance, which have eroded investor confidence; a lack of clear plans to achieve mid-term targets, leaving a gap between management’s projections and market expectations; and minimal share ownership among non-executive directors (less than 0.05%) which raises questions about alignment with shareholders.

In addition, Gatemore cited YouGov’s listing on AIM as a structural disadvantage, noting the index’s underperformance relative to the FTSE 250 and Russell 2000, alongside significant capital outflows.

Gatemore is urging YouGov to conduct a strategic review, with a potential sale of the business as the most direct path to unlocking its intrinsic value. The firm believes new ownership could better capitalise on YouGov’s strengths while addressing governance and market-related challenges.

Bankrupt cryptocurrency exchange FTX has filed a lawsuit against Anthony Scaramucci and his hedge fund, SkyBridge Capital, as part of its broader strategy to recoup funds for creditors following its collapse, according to a report by Fortune.

The report cites court documents as revealing that the lawsuit against the former White House Communications Director is one of 23 cases filed Friday in Delaware’s bankruptcy court. Other defendants in the suits include the digital-asset exchange Crypto.com and political organisation FWD.US, which was co-founded by Mark Zuckerberg.

FTX alleges that during the challenging “crypto winter” of 2022, founder Sam Bankman-Fried undertook “a campaign of influence-buying,” making costly and high-profile “investments.” According to the filing, one key relationship he targeted was with Scaramucci, leveraging the financier’s “established financial, political, and social” connections.

The company now argues these investments “offered little to no benefit” and merely served to enhance Bankman-Fried’s status in political and financial circles. FTX claims that Bankman-Fried invested $67m in SkyBridge ventures in 2022, suggesting that Scaramucci was “seeking a bailout” as SkyBridge’s assets under management had declined from a peak of $9bn in 2015 to $2.2bn. FTX is seeking to recover over $100m in damages.

In September 2022, Bankman-Fried and Scaramucci publicly announced that FTX Ventures would acquire a 30% stake in SkyBridge, although financial specifics were not disclosed. Scaramucci commented at the time that the investment aligned with his vision for SkyBridge over the coming decade.

Just months later, FTX filed for bankruptcy, and Bankman-Fried was arrested in the Bahamas on charges of fraud.

A representative for Scaramucci declined to comment on the lawsuit.

Elliott Investment Management, one of the world’s largest activist investment firms, has named Samantha Algaze as its first-ever female Partner and promoted two other Partners, John Pike and Pat Frayne, to its management committee, according to a report by Bloomberg.

The report cites an unnamed source familiar with the situation as confirming the appointment begins Monday.

Algaze, a Senior Portfolio Manager, has been with Elliott since 2013 and has played a key role on the firm’s credit investment team. Her work includes high-profile trades involving Caesars Entertainment and a former cybersecurity unit of McAfee known as Magenta Buyer.

Pike and Frayne, meanwhile, have joined the firm’s 12-member management committee. Pike has been instrumental in Elliott’s activist campaigns, most recently engaging with Southwest Airlines. Frayne’s focus includes structured credit, along with interest rate and currency trading.

With these promotions, Elliott now has 15 partners in total, including all management committee members, as well as Marc Steinberg, Jason Genrich, and Samantha Algaze.

Ken Griffin’s multi-strategy hedge fund major Citadel has made a high-profile hire with the appointment of Nabeel Bhanji, a partner from Elliott Investment Management, in what is one of the biggest hedge fund moves of the year, according to a report by Bloomberg.

The report cites an internal memo at Elliott, reviewed by Bloomberg, as confirming that London-based Bhanji, 38, is departing the firm after more than a decade. A spokesperson for Citadel confirmed his hiring but did not elaborate on his role.

Elliott, in response to Bhanji’s departure, is redistributing his management and investment duties across its team. Gordon Singer, head of Elliott’s London office and son of Elliott founder Paul Singer, will oversee Bhanji’s trades, supported by Aaron Tai, who joined last year and will assist with Japanese investments, according to sources familiar with the matter.

Bhanji’s tenure at Elliott saw him contribute to high-profile deals, including Elliott’s $1bn stake in Anglo American Plc and involvement in Swedish Match AB and Rocket Internet SE. He also served as a director of Toshiba before its recent privatisation.

Caroline Ellison, the former CEO of hedge fund Alameda Research and a central figure in the $11bn FTX cryptocurrency exchange scandal, has begun her two-year prison sentence in a Connecticut federal facility.

The 30-year-old surrendered to Danbury Federal Correctional Institution on 7 November, 2024, where she will remain until 20 July, 2026, as inmate number 36854-510 for her role in the fraud that brought down FTX – once valued at $32bn.

Ellison, who managed Alameda Research, played a key role in misappropriating billions in customer funds from FTX, which were used for high-risk trades and personal ventures.

In December 2022, Ellison struck a plea deal, admitting to conspiracy and fraud, which paved the way for the conviction of FTX founder Sam Bankman-Fried, who received a 25-year sentence. Her cooperation, involving nearly 20 meetings with prosecutors, was instrumental in unravelling the complex schemes that led to FTX’s collapse.

Bankman-Fried, convicted of wire fraud and money laundering, misused over $8bn in customer funds for personal investments and political donations. He is currently appealing his conviction.

Other FTX executives have also faced repercussions. Nishad Singh, FTX’s former Director of Engineering, received time served and three years of supervised release, while Ryan Salame, co-CEO of FTX’s Bahamian arm, was sentenced to 90 months for campaign finance violations.

Following Donald Trump’s US presidential election win, hedge funds have quickly pivoted toward financial stocks while reducing their exposure to companies in the renewable energy sector, according to a report by Reuters.

The report cites a recent Goldman Sachs release as highlighting that hedge funds bought bank stocks at the fastest rate in three years, signalling strong confidence in the sector under the anticipated regulatory and tax policies of the new administration.

Banking and financial services emerged as the most purchased sector on Goldman’s prime brokerage trading desk last week. While the release did not specify which regions were most popular, a second note from Goldman Sachs indicated that US banks stand to benefit directly from a more favourable regulatory environment expected under Trump’s leadership.

The report also pointed out that tax reform is likely to benefit the financial sector, with room for hedge fund investments in US financial stocks to increase, given that current positioning is relatively low compared to historical levels.

On 6 November, the day following Trump’s victory, the US bank sector index surged by up to 11.1%. Prime brokerage desks saw an uptick in long stock positions on banks, consumer finance, capital markets, and other financial services. Bullish bets were primarily concentrated in US stocks, but hedge funds also took long positions in Asian emerging markets and shifted from short to long in European equities.

The Goldman Sachs report also showed a sharp shift away from utilities and renewable energy. Hedge funds engaged in heavy short selling against utilities, with independent power producers and renewable energy companies becoming the most offloaded assets. In the US utilities sector, short positions outnumbered long ones by a two-to-one margin.

Hedge funds held their most bearish outlook on the yen since August ahead of last week’s US presidential election, a sign many investors anticipated a Donald Trump victory, according to a report by Bloomberg citing data from the Commodity Futures Trading Commission (CFTC).

Speculative investors ramped up short positions on the yen for a fourth consecutive week leading up to 5 November. Following Trump’s decisive win, the yen initially fell against the dollar but later regained strength, ending the week slightly higher.

The so-called “Trump trade,” which involves a stronger dollar among other strategies, rests on the president-elect’s plans for tax cuts and tariffs, which could fuel inflation and lift Treasury yields. However, the yen’s post-election bounce-back complicated this approach, as the dollar weakened and Japanese authorities signalled potential intervention to curb excessive yen volatility.

“This is more of a dollar-strengthening story, where the Trump trade narrative gained traction,” explained Shoki Omori, chief desk strategist at Mizuho Securities in Tokyo. Omori noted that traders might resume yen carry trades, borrowing in Japan’s low-interest currency to fund higher-yielding investments elsewhere.

“We see more support for yen carry trades despite potential rate hikes from the Bank of Japan in December or January,” Omori added.

Some analysts suggest that the dollar-yen direction will likely be influenced by the gap between US and Japanese short-term bond yields. If the Federal Reserve moderates its policy easing expectations, the dollar could gain further, pressuring both the yen and emerging-market currencies like the Mexican peso.

“Fed expectations are overly dovish,” wrote Torsten Slok, chief economist at Apollo Global Management, in a recent report. “The US economy remains strong, with inflation risks tilted to the upside. Markets are pricing in too many Fed rate cuts.”

Jim Pallotta’s family office, Raptor Group, is investing in a new hedge fund, Trevally Capital, which aims to capitalise on distressed sectors within the US housing market by trading US residential mortgage-backed securities (RMBS), according to a report by Bloomberg.

The report cites an investor presentation seen by Bloomberg as revealing that Pallotta, who is known for his early investments in firms like Two Sigma Investments and Graham Capital Management, is now backing Trevally, which is set to launch early next year.

As a seed investor, Raptor Group will enjoy a revenue-sharing agreement and reduced fees through the founder share class, according to a source familiar with the deal.

Trevally, a minority-led firm, was co-founded by Chief Investment Officer Steve Palmer and Co-CEOs Matt Jozoff and Brett Nicholas. With $100m already raised, including contributions from investment bank Seaport Global Securities, Trevally has secured commitments for an additional $150m.

Trevally’s strategy targets consistent double-digit returns by exploiting strain points in the housing market, such as rising mortgage rates, insurance costs, and the financial toll of extreme weather on homeowners. The firm will primarily invest in mortgage-backed securities tied to Ginnie Mae, which supports mortgages for low- and moderate-income borrowers.

Founders’ share-class investors will pay a 1% management fee and 10% of profits, while later investors will see fees of 1.5% and 17.5%. Investments will have a one-year lockup period.

Before founding Raptor, Pallotta managed a $10 billion portfolio at Tudor Investment and oversaw private equity and hedge fund investments.

Point72 Asset Management has named Michael Fisher as its new Chief Risk Officer, adding to a series of recent executive shifts as Steve Cohen steps back and Harry Schwefel takes the reins at the hedge fund, according to a report by eFinancial Careers.

Fisher joined the New York-based firm from Citadel, where he was Head of Risk for Global Fixed Income and Macro for the past three years.

Fisher, a former “strat” at Goldman Sachs, brings extensive experience to Point72. He originally joined Goldman in 2003 as a PhD mathematician and spent 17 years there, rising to Managing Director in 2011. Fisher takes over from Mike Jemiolo, who served as Point72’s CRO for a decade before departing in June.

New York-based multi-strategy hedge fund firm Cinctive Capital Management achieved a strong 4% gain in October, outpacing its peers and defying the market trend as the S&P 500 fell by 1%, according to a report by Finimize.

In a challenging equity market, strategic bets in the technology, utilities, and consumer sectors helped the £3bn firm post returns that took its YTD gain to 15%.

By comparison, Citadel’s Wellington fund rose 1.2% last month, while Millennium Management gained 0.4%. Schonfeld Strategic Advisors’ Strategic Partners fund was up 2.3%, with only its Fundamental Equity fund matching Cinctive’s 4% gain.