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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.

Hedge funds have boosted their bullish stance on West Texas Intermediate (WTI) crude to the highest level seen since March, driven by OPEC+’s decision to delay a planned output hike and heightened geopolitical tensions in the Middle East, according to a report by Bloomberg.

The report cites data from the Commodity Futures Trading Commission (CFTC) as showing that money managers raised their net long positions on the US crude benchmark by 48,143 contracts, reaching a total of 143,985, in the week ending 5 November, marking the the strongest positive sentiment in six weeks.

WTI’s geopolitical risk premium, which had eased somewhat amid potential signs of Middle East de-escalation, surged again following reports suggesting Iran could be preparing proxy attacks on Israel from Iraqi territory.

Additional support for prices came from OPEC+’s recent decision to postpone its December production increase, alleviating trader concerns about a potential oversupply.

By Justin Arasin, Head of Capital Formation and Product Development, US Realty Advisors 
& David Grazioli, Managing Partner, US Realty Advisors
 

By Andreas Rothacher, CFA, CAIA, Head of Investment Research at Complementa AG
 
 

Swiss pension fund landscape and regulation of alternative assets

By Matt Curtolo, CAIA

The world is replete with relative comparison. Certainly, in our social lives, we are often ‘keeping score’ of our ‘performance’ when compared to others. In 1954, psychologist Leon Festinger developed the theory of social comparison, which is the idea that individuals determine their own social and personal worth based on how they stack up against others. 

By Anthony Barchetto, CFA, Founder and Chief Executive Officer of Salt Financial, a leading provider of index solutions and risk analytics for investment advisors, fund sponsors, investment banks, and insurance carriers.

Predicting the Future, One Day at a Time

By Morgan D Neff, Senior Vice President and Wealth Management & Trust Director, First National Bank of Alaska.

Alaska is not California. Alaska has no state income tax, capital gains tax, estate tax, or gift tax.

Most states don’t allow you to protect your assets in a trust and retain beneficial interest even if it is irrevocable. 

By Shaul Rosten, Equity Analyst, Global Value - Redwheel.