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Activist investor Palliser Capital has intensified its campaign for mining giant Rio Tinto to unify its dual-listed structure in London and Sydney, advocating for the establishment of a single holding company based in Australia, according to a report by Alternatives Watch.

In a letter addressed to Rio Tinto’s board on Wednesday, the UK-based hedge fund described the dual-listed company (DLC) framework as an “unmitigated failure for shareholders” and called for an independent review to assess the feasibility and benefits of unification.

Palliser argues that the current structure hampers shareholder value, stating: “Our extensive analysis indicates that unifying the structure into an Australian-domiciled holding company could deliver a near-term upside of $28 billion (27%) for PLC shareholders, with further gains for the combined group in the medium term.”

The hedge fund, which holds a significant stake in Rio Tinto, considers this reform an “urgent” necessity to address inefficiencies and unlock value trapped in the outdated system.

Rio Tinto’s Chief Executive, Jakob Stausholm, has previously dismissed the idea of unification. In July, he cited the company’s internal review, which concluded that merging the dual structure would erode shareholder value.

Stausholm also highlighted key differences between Rio Tinto and BHP, the world’s largest miner by market value, which successfully unified its corporate structure in Australia in 2022. He argued that while BHP’s shares were predominantly held in Australia, the majority of Rio Tinto’s shares are owned by investors in London, making the comparison less relevant.

Palliser holds BHP’s unification as a model, noting the operational and shareholder benefits achieved since its transition. It claims Rio Tinto would similarly benefit, addressing inefficiencies related to franking credits — tax advantages in Australia — and improving its ability to execute stock-based mergers and acquisitions.

Rio Tinto, however, has pushed back on these points, with Stausholm previously stating that the current structure does not hinder the company’s capacity for strategic deals.

Monolith Management, a technology-focused hedge fund with $300m under management, has delivered an impressive 53% year-to-date return, riding gains in semiconductors, data centres, and a September rally in Chinese equities, according to a report by Reuters.

The Hong Kong-based firm is now set to expand, with plans to launch a new fund in January that will boost its long-short equity strategy to approximately $500m.

Monolith’s success stands out in a challenging year marked by global economic uncertainty, with Asia’s equity long-short funds achieving an average return of 12.8% through November, according to Goldman Sachs, placing Monolith well ahead of its peers.

The firm has profited from strategic bets on US and Taiwanese semiconductor stocks tied to the artificial intelligence supply chain, investments in US data centre infrastructure, including cutting-edge technologies like liquid cooling solutions, as well as power and network connectivity assets, and gains from crypto and Bitcoin mining companies that support data centre operations.

In September, the fund ramped up its net exposure to Chinese internet and consumer stocks to 50%, capitalising on the government’s massive monetary stimulus. By October, Monolith had pared back its exposure to 20%, avoiding a 17% downturn in Chinese equities since then.

MFA has submitted a comment letter in response to the European Commission’s Consultation on the Functioning of the EU Securitisation Framework, encouraging the introduction of reforms aimed at improving “the appeal and competitiveness” of the markets.

The MFA would like the EC to ‘right-size’ the definition of securitisation, remove duplicative due diligence requirements, and align the securitisation framework with other jurisdictions as part of a package of reforms it believes will improve the attractiveness of EU securitisation markets to investors, including EU and global investment managers.

“Reforming the EU securitisation framework will enhance EU capital markets and drive economic growth and competitiveness throughout the continent,” said Bryan Corbett, MFA President and CEO. “A fresh regulatory approach that recognises internationally accepted standards, promotes harmonisation and cross-border activity, and removes duplicative, burdensome regulation will contribute to the development of the European Savings and Investments Union.”

The MFA says its proposed reforms “will enhance market participation and capital flows from both domestic and international investors, fully unlock the potential of the securitisation markets, stimulate EU economic growth, and contribute to the development of the EU Savings and Investments Union. Additionally, it offers the benefits of reducing risks on banks’ balance sheets, increasing the capital available to borrowers and for investments, and diversifying alternative investment fund investment portfolios”.

A growing market for injecting fresh capital into aging energy assets owned by private equity firms through continuation funds has attracted major hedge funds, including Baupost Group and Elliott Investment Management, according to a report by Bloomberg.

These investors are leveraging continuation funds to capitalise on opportunities in an increasingly challenging sector, marked by volatile commodity prices, ESG concerns, and shrinking asset values.

Continuation funds, which allow private equity firms to transfer assets from one fund to another, backed by fresh capital, are gaining in popularity as a means to extend the lifecycle of hard-to-sell investments with several firms, including Kayne Anderson Capital Advisors, which restructured its ownership in energy producer Kraken Resources across three funds, creating a $911m continuation vehicle led by Baupost.

Similarly, Ridgewood Energy moved its Gulf of Mexico assets into a $500m continuation fund supported by Elliott. Other notable deals include Elliott’s backing of Riverstone Holdings’ $815m continuation fund for ILX Holdings and Quantum Capital Group’s fund for HG Energy.

The continuation fund market for energy assets remains a niche within the broader $50m secondary market, although Baupost and Elliott have seized the opportunity to invest at discounted prices, negotiating deals that provide sponsors with much-needed liquidity.

Tech-focused hedge fund Whale Rock Capital Management plans to reopen its flagship fund in early 2025, seeking to raise between $200m and $300m in new capital, having significantly outperformed the broader market YTD with a 51% gain, according to a report by Reuters.

Whale Rock’s flagship fund, which manages roughly $9bn in assets, has been closed to new investors since 2021.

The report cites an unnamed source familiar with the matter as highlighting that the reopening aims to capitalise on opportunities in smaller semiconductor and supply chain companies poised to benefit from the rapid growth of artificial intelligence (AI).

The fund’s 2024 performance far outpaced the S&P 500, which rose nearly 28% during the same period. Whale Rock also posted a strong 32% gain in 2023, marking a sharp recovery from steep losses of 9% in 2021 and more than 40% in 2022.

Founded in 2006 by Alexander Sacerdote, a former tech portfolio manager at Fidelity Investments, Whale Rock’s early bets on the transformative potential of AI have paid off, including wagers on well-known AI-focused companies including Nvidia and Amazon (AMZN.O), as well as less conventional picks such as Canadian electronic equipment maker Celestica, mobile gaming ad platform AppLovin, education technology provider Duolingo, and AI server manufacturer Super Micro Computer.

The fund gained 8.3% in November alone, while the company’s long-only strategy surged 10.6% last month, bringing its year-to-date return to an impressive 52%.

Hedge funds, including Calamos Advisors, have turned MicroStrategy into one of Wall Street’s hottest trades, with the company leveraging its role as a bitcoin proxy to secure billions in convertible bond investments, according to a report by Bloomberg.

Amid a 500% rally in MicroStrategy’s stock this year, driven by surging bitcoin prices, the firm announced plans to sell $21bn in convertible notes to fund further cryptocurrency purchases. Hedge funds, however, are less interested in MicroStrategy’s stock price or bitcoin holdings. Instead, they are seizing on opportunities for market-neutral arbitrage fuelled by the stock’s extraordinary volatility.

The report cites Eli Pars, co-CIO at Calamos as revealing that his firm has invested over $130m in MicroStrategy’s convertible bonds, which are used in arbitrage strategies that exploit the underlying asset’s volatility.

“Convertibles are a way for issuers to monetise the volatility of their stocks, and MicroStrategy is an extreme example,” he said.

The company has issued $7bn in low-interest, long-term convertible bonds this year, with plans to raise $42bn over the next three years. These bonds, exchangeable for equity at certain price thresholds, are attractive to hedge funds deploying arbitrage strategies also used by firms like AQR Capital Management and Man Group.

The arbitrage involves hedging the bonds’ equity exchange feature, treating it as an option tied to the stock’s volatility. MicroStrategy’s shares, which average daily moves of 5.2% (compared to 0.6% for the S&P 500), make the strategy particularly lucrative.

MicroStrategy, led by co-founder Michael Saylor, has accumulated a Bitcoin stash worth around $40bn since adopting its cryptocurrency-focused strategy in 2020. The firm has continued to purchase Bitcoin aggressively, buying $13.5bn worth since 31 October.

Saylor has touted the stock’s volatility as an asset, describing it as more volatile than any S&P 500 component. This dynamic, partly driven by Bitcoin’s wild price swings, has made MicroStrategy’s convertible bonds a top pick among hedge funds.

“The trade is attractive because the implied volatility of the converts is way below realised volatility or option-implied volatility,” Pars said.

Despite the appeal, MicroStrategy’s approach hinges precariously on bitcoin’s value, according to sceptics. David Trainer, CEO of market research firm New Constructs, likened the strategy to “a game of musical chairs,” with potentially disastrous consequences if bitcoin’s rally reverses.

“It could be a giant house of cards that will crush many shareholders when it crashes,” Trainer said.

Transaction Network Services (TNS) has unveiled two new solutions – Data Usage Optimizer (DUO) and TNS Market Data as a Service – aimed at helping banks and hedge funds optimise market data management and reduce costs.

The tools are designed to assist buy- and sell-side firms in managing data usage and streamlining subscription expenses.

DUO is a data monitoring product that generates detailed reports identifying unused market data feeds within organisations. By highlighting employees who have not accessed specific data feeds, DUO enables firms to eliminate unnecessary subscription costs.

In addition to DUO, the new TNS Market Data as a Service is a vendor-agnostic platform that combines hosting, connectivity, application management, and administration for market data services. The service integrates seamlessly with client systems, offering 24/7 monitoring and proactive alerting.

According to a press statement, the integration of DUO with TNS Market Data as a Service allows firms to “gain full visibility into data usage, enabling more efficient infrastructure monitoring, cost management, and productivity improvements”.

Pershing Square Holdings has confirmed plans to delist from Euronext Amsterdam, aiming to consolidate trading on the London Stock Exchange in a decision driven by cost-saving measures and a desire to simplify regulatory requirements, according to a report by MorningStar.

The report cites Chair Rupert Morley as highlighting that the decision will also improve liquidity for shares of the Guernsey-based closed-ended investment fund, which is managed by Pershing Square Capital Management and focuses on concentrated, long-term investments in North American companies.

The fund is led by billionaire investor Bill Ackman.

The delisting follows a review of Pershing Square Holdings’ listing arrangements that began in January. Recent incidents, including clashes involving Israeli football fans in Amsterdam, accelerated the decision, Ackman suggested in comments reported last month by The Times.

On Tuesday, shares of Pershing Square Holdings rose 1.2% to 3,872.00 pence in London, valuing the company at $10.06bn.

European hedge funds, including Metori Capital Management and Marshall Wace, posted strong performances in November, driven by a surge in global stock and currency markets tied to Donald Trump’s US election victory which bolstered US equities and the dollar, according to a report by Reuters.

The report cites an unnamed source familiar with the matter as revealing that Metori, a Paris-based hedge fund managing $700m, saw its Metori Epsilon Diversified fund gain 4.6% in November, raising its year-to-date returns to 13.4%.

Marshall Wace, meanwhile, one of Britain’s leading hedge funds, recorded a 2.8% return in its Eureka fund, bringing its 2024 performance to 14.5%, with the firm’s Market Neutral Tops fund adding 1.75% in November, contributing to an impressive 21.49% year-to-date return, according to a separate source.

Winton Capital, which manages $13bn, reported 0.3% gains in its multi-strategy fund, achieving a cumulative 8.8% return for 2024. Its Diversified Macro fund delivered 0.2% in November, raising its yearly performance to 2.9%, according to another source.

Capital Fund Management (CFM) delivered returns ranging from just over 8% in its CFM Stratus Fund to an impressive 18.88% in its IS Trends fund, which manages $15.5bn, said a fourth insider.

Globally, hedge funds posted an average 1.4% return for November, marking a rebound after two months of flat performance, according to a note from JPMorgan Prime Brokerage. Stock-focused funds led the charge, with global equity hedge funds returning around 2%, bolstered by investments in North American stocks.

Clear Street, a cloud-native financial technology firm providing prime brokerage services, has formally launched Clear Street UK, having recently secured approval from UK regulator the Financial Conduct Authority (FCA).

Clear Street UK has also been approved as a Category 1, ring-dealing member by the London Metal Exchange (LME).

In a press statement, Ed Tilly, President and CEO-Elect of Clear Street, said: “We are building a global, full-service institutional business powered by our cloud-based, financial technology platform and our best-in-class teams who provide financing, derivative products, execution services and more, empowering our clients for success across geographies, asset classes, and mandates. The UK is a critical market for us as a financial hub worldwide and a gateway to Europe and beyond.”

As well as direct access to the LME’s trading floor, Clear Street also now has access to global reference prices for the metals community allowing the company to issue LME contracts, execute trades on behalf of institutional clients, and clear transactions.

By Massimiliano Saccone, CFA, Founder & CEO, XTAL Strategies

 

One of the useful legacies of the now-vacated SEC’s Private Fund Advisers Rule[i] is a clear and current definition of the purpose of reported performance. Performance metrics should allow investors:

Activist investment firm Metage Capital has called on HarbourVest Global Private Equity (HVPE) to either introduce quarterly render offers to address its significant share price discount or liquidate its £3.4bn ($4.3bn) portfolio, according to a report by CityWire.

The demand, outlined in an open letter to shareholders, comes as HVPE struggles to bridge the gap between its share price and net asset value (NAV).

Metage’s Chief Investment Officer, Tom Sharp, criticised HVPE’s performance under board chair Ed Warner, highlighting the widening discount on its shares. By the end of October, the shares traded at a 45% discount to NAV — significantly worse than comparable peers CT Private Equity (32%) and Pantheon International (35%). Despite narrowing slightly to 40% recently, the discount has effectively doubled during Warner’s four-year tenure.

Sharp emphasised the potential value unlocked if the discount were eliminated, stating it could generate £1.3bn for shareholders. Metage, which holds 0.9% of HVPE shares, believes the board’s existing strategy, including a pool for share buybacks funded by 15% of asset sales, has proven inadequate.

Sharp has urged HVPE to align with the structure of its stablemate fund, the HarbourVest Global Private Solution (HGPS), launched in Luxembourg last year, which allows investors to redeem 5% of their holdings at NAV every quarter, ensuring full exit liquidity within five years, an approach it says prevents the fund from trading at a discount.

Sharp recommended that HVPE adopt a similar model by halting new commitments to HarbourVest funds and divesting existing stakes to return capital to shareholders. If this transition proves unfeasible, Sharp argued the fund should be liquidated entirely to eliminate the persistent discount.

Despite delivering a 214% shareholder return over the past decade, far outperforming the FTSE All-Share’s 81%, HVPE lags the 220% return of the MSCI World index. The underlying return of 306% from its private equity investments starkly contrasts with the diluted shareholder return, leaving a 92% shortfall due to the share price discount.

Sharp also took aim at HarbourVest’s policy of reinvesting at least 85% of cash flows into new commitments, citing data from Peter Wilson, a managing director at HarbourVest, showing that the group’s private equity funds often trade below NAV on secondary markets, making these investments less attractive than direct stakes in high-quality private equity funds.

Metage’s letter adds to pressure from other activist shareholders, including Active Value Investors (2.3% ownership) and Quilter Investors (1.3%), who have previously pushed for governance reforms and better capital allocation.

Hedge fund assets reached an all-time high of $4.5tn in October, driven by strong performance across several investment strategies, and underpinned by a 7.4% YTD return in the HFRI Fund Weighted Composite Index, according to a report by Wells Fargo analysts.

Equity hedge funds led the charge with a 9.6% gain year-to-date, attributed to successful stock selection and increased exposure to public markets. Analysts noted that heightened stock price dispersion — fuelled by higher interest rates and slowing economic growth — created opportunities for active management to thrive.

Event-driven strategies, meanwhile, particularly distressed credit, also saw significant gains as companies tackled recapitalisations and restructurings. Relative value long-short credit strategies capitalised on pricing dislocations in fixed-income markets, delivering steady returns with minimal correlation to broader market movements.

In contrast, macro strategies, especially systematic approaches, struggled due to frequent trend reversals across multiple asset classes. The volatile environment made it challenging for these strategies to sustain consistent gains.

Wells Fargo’s analysts remain optimistic about the prospects for certain strategies, including equity hedge (directional), event-driven (distressed credit), and relative value (long/short credit). These approaches are expected to benefit from ongoing economic recovery and stabilisation in market conditions.

OSTTRA, the global post-trade solutions provider, has formed a strategic collaboration with fintech FIS Global aimed at bringing enhanced transparency to the exchange-traded derivatives (ETD) post-trade lifecycle.

According to a press statement, through the partnership, the OSTTRA network of investment management clients will benefit from receiving a real time clearing status from over 70 global CCPs via FIS Connections, offering greater transparency into the finality of give-ups and improved exception management capabilities.

FIS, meanwhile, will provide the broker network with enhanced operational efficiency via straight through processing of allocation instructions enriched with OSTTRA order IDs directly into the FIS Cleared Derivatives solution, allowing for increased automation and accuracy in middle office give-up/give-in processing.

Through this collaboration, the two firms will provide enhanced data insights, enabling market participants to meet the FIA’s Derivatives Market Institute for Standards (DMIST) 30-30-30 standards for the timeliness of allocations and give-ups in the ETD market. This builds on OSTTRA’s work with DMIST to improve standardisation of ETD post-trade processing.

Shares of German speciality chemicals company Lanxess soared by as much as 10% on Monday after news broke that Greenlight Capital the hedge fund founded by David Einhoir, has acquired a stake of over 5% in the business, according to a report by Reuters.

The report cites a regulatory filing as revealing that Greenlight had built a 5.06% stake in Lanxess as of 25 November, making the hedge fund the firm’s largest shareholder, according to data from LSEG.

At 11:52 GMT, the company’s shares had risen by 8.6%, leading gains on Europe’s STOXX 600 index and reducing their year-to-date losses to under 10%.

Michael Germino’s Ghisallo Capital Management has obtained a regulatory license for its Hong Kong operations, marking a rare move by a foreign hedge fund to expand into the city amid challenging economic and geopolitical conditions, according to a report by Bloomberg.

The report cites information on the Hong Kong Securities and Futures Commission’s (SFC) website as confirming that the license was issued late last month.

Ghisallo Capital, based in Boston, Massachusetts, managed $3.4bn in assets as of the end of 2023. The firm incorporated its Hong Kong unit a year ago, according to local business registration records.

Under the leadership of Chief Investment Officer Michael Germino, the firm employs diverse investment strategies, including long and short equity trades, event-driven strategies, credit investments, and global macro trading across multiple asset classes, as detailed in regulatory filings. Germino, who previously worked at Soros Fund Management and Scott Bessent’s Key Square Group – the hedge fund founded by Donald Trump’s Treasury Secretary pick Scott Bessent – established Ghisallo Capital four years ago.

Hong Kong’s government and regulators have been actively working to restore the city’s reputation as a premier financial hub. Once a magnet for international managers, the city’s appeal has waned in recent years due to the pandemic, geopolitical tensions, and a slowdown in China’s economy. These factors contributed to an exodus of financial professionals and a decline in new arrivals.

However, there are signs of recovery, with Bloomberg analysis showing a net increase of approximately 830 licensed financial professionals over four months, bringing the total to nearly 42,000 as of October.