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By Claire Sawyer, Associate Director of Content Development, CAIA Association

 

By Steve Novakovic, CAIA, CFA, Managing Director of Educational Programming, CAIA Association

 

Jersey-based global macro hedge fund firm Brevan Howard Asset Management is scaling back traders’ risk limits as the firm’s flagship fund faces mounting losses, erasing last year’s gains, according to a report by Bloomberg.

The report cites unnamed sources familiar with the matter as revealing that CEO Aron Landy has moved to reduce risk-taking in response to heightened market volatility, implementing stricter trading limits for some portfolio managers. These defensive measures come as the firm’s $11.7bn Master Fund posted a 1% decline in the first week of March, extending its year-to-date losses to 5.4%, according to an investor letter seen by Bloomberg News. The fund had gained 5.1% in 2023.

Brevan Howard’s Alpha Strategies fund, another of its key vehicles, was also down 0.8% during the week, though it remains up 1.5% for 2024 so far, a separate letter showed.

The $35bn macro hedge fund, co-founded by billionaire Alan Howard, is known for its high-conviction trades in interest rates and currencies. However, its performance has been challenged by increased geopolitical uncertainty and sharp swings in asset prices following Donald Trump’s election victory in November. Rising tensions over trade policies, tariffs, and European defence spending have amplified investor uncertainty.

While the year is still in its early stages, Brevan Howard’s Master Fund has only posted an annual loss exceeding 5% once since its inception in 2003.

Veteran quant trader Jeff Berton has made the leap from investment banking to hedge funds, joining multi-strategy major Millennium as Global Head of Equity Volatility Risk in New York, according to a report by eFinancialCareers.

Berton brings over two decades of experience in quantitative trading and risk management. He spent the last six years at Citi, where he led the firm’s Quantitative Index Strategies (CIS) team while also serving as North America Head of Exotics Trading.

Prior to that, he headed the Quantitative Investment Solutions (QIS) group at Credit Suisse and was previously Head of US Exotics Trading at JPMorgan.

According to FINRA’s BrokerCheck, Berton departed Citi in May 2023, though details of his time out of the market – likely a period of gardening leave – remain unclear. The exact timing of his move to Millennium has not been disclosed.

Syz Capital, the $2bn investment arm of the family-owned Syz Group, has launched the Syz Capital BTC Alpha Fund, a new bitcoin-denominated fund of cryptocurrency hedge funds, with Coinbase acting as prime broker and custodian.

According to a press release, the fund aims to take advantage of market volatility, inefficiencies, and fragmented liquidity to deliver low-volatility, uncorrelated returns, and will build on the success of SyzCrest, which launched in 2023, aligning with Syz Group’s focus on innovation in digital assets.

Strategies include statistical arbitrage, futures basis trading, DeFi liquidity, and market making, all designed to deliver low-volatility, uncorrelated returns. It opens with around 2,000 BTC (approximately $180m).

This strategy is designed for bitcoin holders and corporates, leveraging SyzCrest’s record of 20% annualised returns with 6% volatility, said Richard Byworth, Managing Partner at Syz Capital.

The BTC Alpha Fund is targeting high single-digit annual returns with quarterly liquidity, focusing on low volatility – half the volatility of Syz’s USD-denominated fund at just 3%. The fund charges no management fees, only taking performance-based earnings, aligning the interests of Syz Capital and its investors. The minimum investment is 10 BTC.

Originally designed for Swiss-based bitcoin holders, the fund has attracted interest from corporate treasuries globally seeking reliable yield options. Syz Capital has selected 10 managers from over 300 global candidates.

The fund will hard close on 1 April 2025.

San Francisco City & County Employees’ Retirement System (SFERS) has allocated $100m to Qube Research & Technologies’ flagship Qube Fund, further strengthening its exposure to the multi-strategy hedge fund space, according to a report by Pensions and Investments Online.

The $36.5bn public pension fund disclosed the investment in a report from CEO/CIO Alison Romano, included in materials for its upcoming 12 March board meeting.

The commitment, which closed on 1 March, was executed through San Francisco Absolute Return Investors II (SFARI II), a bespoke limited partnership between SFERS and Blackstone Alternative Asset Management.

SFERS has been an active investor in Qube Research & Technologies, previously committing $75m to the firm’s Torus Feeder 2 fund through SFARI II.

As of 28 February, SFERS’ actual allocation to absolute return strategies stood at 9.6%, just shy of its 10% target.

The additional capital deployment into Qube Fund aligns with the pension’s broader efforts to optimise its hedge fund portfolio while capitalising on the expertise of leading alternative asset managers.

Brad Schneider has rejoined Millennium Management from rival multi-strategy firm Citadel as a Senior Portfolio manager after previously working at the firm between 2018 and 2021, according to a report by eFinancialCareers.

Schneider most recently worked at Citadel’s global equities team from October 2021 to March 2024. His activities between March 2024 and February 2025 are not publicly known, though he may have been under a non-compete agreement.

Before Citadel, Schneider spent nearly three years at Balyasny. His expertise is in real estate equities. Neither Millennium nor Citadel have commented on his return to Millennium.

Hedge fund Anson Funds is preparing for a proxy contest at Match Group, with plans to nominate multiple directors to the online dating giant’s 10-member board, according to a report by Reuters citing sources familiar with the matter.

Anson, which disclosed a 0.6% stake in Match at the end of December, has been pushing the parent company of Tinder, Hinge, and OkCupid to reevaluate its capital allocation strategy, implement cost-cutting measures, and explore a strategic review of its MG Asia business. The fund has also raised governance concerns and pressed for a clearer corporate strategy, the report says.

This year, only three of Match’s 10 directors are up for election, heightening tensions among investors advocating for annual elections of the full board. Anson has flagged long-standing ties between certain directors and former parent company IAC/Interactive as problematic and has expressed concern over the company’s executive turnover – four CEOs in five years – citing it as a destabilising factor.

In response, a Match spokesperson emphasised the board’s commitment to good corporate governance and protecting stockholder interests. The company, now under the leadership of CEO Spencer Rascoff, who took the helm last month, remains focused on business growth and shareholder value creation.

Despite more than a dozen meetings between Anson and Match over the past year – leading to incremental changes such as an investor day and an accelerated capital return policy – Anson remains dissatisfied with the pace of reform.

The campaign is spearheaded by portfolio manager Sagar Gupta, who joined Anson in 2023 to expand its activism strategy. Gupta, a veteran of technology and media investments, previously led similar efforts at Legion Partners and recently joined the board of Five9, a US call centre software firm.

Match’s valuation has plummeted from nearly $40bn at the peak of the pandemic to approximately $8bn today. Its stock has declined 2% year-to-date and 67% over the past three years, significantly underperforming the S&P 500, which gained 41% over the same period.

The company’s depressed valuation has attracted multiple activist investors. In early 2024, Elliott Investment Management disclosed a $1bn position, leading to the addition of two new directors.

Meanwhile, Starboard Value has pushed for a potential sale if Match fails to reinvigorate its business. Regulatory filings show Elliott holding a 4.8% stake and Starboard 5.8% as of year-end 2024.

While Anson’s stake is comparatively smaller, market observers note that activism is no longer dictated by position size.

Hedge fund Point72 has hired Kendall Jager, a former Millennium data scientist and one of Forbes’ “30 Under 30” alumni, as Head of AI for Investment Services, according to a report by eFinancial Careers citing a social media post by Jager.

Jager, 29, joins Point72 in New York, where she is expected to focus on AI-driven automation within the firm’s investment services division, which includes areas such as risk management, compliance, and operations.

Jager, who holds a bachelor’s degree in applied mathematics and economics from Brown University, joined Millennium in 2017, and most recently served as a senior data scientist, playing a key role in developing machine learning and data science capabilities for the firm’s compliance department.

In 2022, Forbes recognised Jager as a “critical member” of the team behind Millennium’s in-house AI and data science platform for compliance.

Point72, led by Steve Cohen, has been expanding its quantitative and AI-driven capabilities, mirroring a broader industry trend

Hedge fund deleveraging accelerated late last week, impacting European stock markets and European hedge fund managers’ returns, with the impact likely to continue this week, according to a report by Reuters, citing a client note from JPMorgan.

The sell-off intensified as European equities declined further on Tuesday, following Monday’s sharp losses tied to US growth concerns and uncertainty over Germany’s fiscal reforms.

JPMorgan noted that multi-strategy hedge funds and stock pickers were forced to liquidate positions, further pressuring the market. Hedge funds shorting European companies also suffered losses as larger funds bought back short positions, driving unexpected stock price gains.
The risk of overcrowding in certain trades remains elevated, the note warned.

Stock-picking hedge funds tracked by JPMorgan finished February down 2.5% and are 1.6% down for 2025 so far. Multi-strategy funds were down 1.7% for February and 1.6% year-to-date.

Activist hedge fund Anson Funds has taken a 9% stake in multi-residential REIT InterRent and is advocating for the company to implement operational and strategic changes, according to a report by Bloomberg citing sources familiar with the matter.

Anson, now the largest shareholder of Ottawa-based InterRent, holds a position valued at approximately CAD130m ($90.2m). Under Canadian regulations, activist investors must disclose holdings above a 10% threshold.

The investment was led by Michael Missaghie, head of Anson’s real estate strategy, and Sagar Gupta, who oversees the firm’s activist initiatives. Anson has reportedly held multiple discussions with InterRent’s management and board regarding potential changes.

InterRent, which manages over 13,000 suites across 126 communities in Ontario, Quebec, and British Columbia, has been evaluating asset sales. CEO Brad Cutsey announced in February plans to divest CAD200m to CAD250m in non-core assets, potentially generating gains of up to CAD140m. The proceeds are earmarked for debt reduction and share buybacks.

RBC analysts, led by Jimmy Shan, recently noted that InterRent trades at a 30% discount to its net asset value (NAV). They view the REIT’s approach of leveraging public-private market arbitrage as a sound strategy. InterRent’s stock has declined 42% from its December 2021 peak and remains largely flat this year after a 29% drop over the past 12 months.

Publicly traded REITs tend to be more liquid and sensitive to short-term market movements, whereas private REITs are valued based on long-term fundamentals, leading to more stable pricing. This market dynamic has contributed to InterRent’s current trading discount relative to its underlying asset value.

Toronto-based Anson Funds manages $1.9bn in assets. In addition to its stake in InterRent, the hedge fund has taken a position in Lionsgate Studios and has engaged with the company on potential value-enhancing strategies.

By Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP
Managing Director, Global Content Strategy, CAIA Association

 

Hedge funds posted mixed performance in February as financial market volatility surged due to new trade and tariff policies, with equity market declines led by steep drops in the growth and technology sectors, according to HFR.

The HFRI Fund Weighted Composite Index® (FWC) declined by -0.47% for the month, as gains in Relative Value Arbitrage and Event-Driven strategies were offset by declines in Macro and Equity Hedge strategies.

The HFR Cryptocurrency Index posted a sharp decline of -16.8% in February, as managers navigated a surge in volatility and steep declines across bitcoin and other cryptocurrencies.

The HFRI Multi-Manager/Pod Shop Index gained +0.92% for the month as managers also navigated the policy and technology volatility.

Hedge fund performance dispersion expanded in February, as the top decile of the HFRI FWC constituents advanced by an average of +6.5%, while the bottom decile fell by an average of -8.3%, representing a top/bottom dispersion of 14.8 % for the month. By comparison, the top/bottom performance dispersion in January was 12.1%.

In the trailing 12 months ending February 2025, the top decile of FWC constituents gained +31.2%, while the bottom decile declined -15.7%, representing a top/bottom dispersion of 46.9%. Approximately half of hedge funds produced positive performance in February.

Fixed income-based, interest rate-sensitive strategies produced another gain as a cycle of risk-off sentiment drove a sharp decline in interest rates, with the HFRI Relative Value (Total) Index advancing an estimated +0.8% for the month, marking the 16th consecutive monthly gain and the 29th gain in the last 32 months. RVA strategy performance was led by the HFRI RV: FI-Convertible Arbitrage Index, which surged +3.4% for the month, followed by the HFRI RV: Volatility Index, which added +1.1%.

Event-Driven (ED) strategies, which often focus on out-of-favour, deep value equity exposures and speculation on M&A situations, also gained in February, effectively navigating the trade/tariff volatility, with the HFRI Event-Driven (Total) Index advancing +0.3% for the month. ED sub-strategy performance was led by the HFRI ED: Multi-Strategy Index, which jumped +1.4%, and the HFRI ED: Credit Arbitrage Index, which added +1.0% for the month.

Equity Hedge (EH) funds, which invest long and short across specialised sub-strategies, posted a decline for the month as Technology equities suffered steep declines on the trade/tariff volatility, with the HFRI Equity Hedge (Total) Index falling -0.66%. EH sub-strategy gains were led by the HFRI EH: Multi-Strategy Index, which surged +3.1% for the month, and the HFRI EH: Equity Market Neutral Index, which gained +0.3%. These were offset by large declines in Technology-focused hedge funds, with the HFRI EH: Technology Index falling -3.9% in February.

Uncorrelated Macro strategies also declined in February as interest rates and commodities fell, with the HFRI Macro (Total) Index falling -1.5% in February. Macro sub-strategy losses were led by the HFRI Macro: Systematic Diversified Index, which fell -2.8%, while the HFRI Macro: Commodity Index also fell -2.4%; partially offsetting these, the HFRI Macro: Active Trading Index gained +2.0% for the month.

Liquid Alternative UCITS strategies advanced in February, with the HFRX Equal Weighted Index gaining +0.36%, while the HFRX Global Hedge Fund Index added +0.28%. Strategy performance was led by the HFRX Relative Value Arbitrage Index, which gained +0.75%.

“With expectations for a continued rapid pace of policy transitions in the coming months, institutions and investors looking for both opportunistic exposure to these trends, combined with valuable defensive capital preservation, are likely to allocate to funds which have successfully executed their strategies through recent heightened volatility,” stated Kenneth J Heinz, President of HFR.

Activist hedge fund Elliott Management has disclosed a €670m short position in TotalEnergies, representing 0.52% of the French energy major’s stock, according to a report by the Financial Times citing regulatory filings.

The position was taken on Thursday and made public by the French markets regulator on Friday.

The move follows Elliott’s February acquisition of nearly 5% of BP, worth approximately £3.8bn, where the activist fund is pressing for asset divestments and a sharper focus on oil and gas.

TotalEnergies has outperformed its European peers in recent years, maintaining a measured approach to the energy transition under CEO Patrick Pouyanné. The company continues to invest in oil and gas production, with a particular focus on liquefied natural gas as a transitional energy source.

With a market capitalisation of approximately €129bn, TotalEnergies recently reported annual earnings that exceeded market expectations, despite a 21% decline in net income due to weaker commodity and refining markets.

The company is also exploring a dual listing in New York and Paris to attract a US investor base less sensitive to ESG concerns than European counterparts. Additionally, its Integrated Power division continues expanding in renewables, combining gas-fired electricity plants with wind, solar, and battery storage projects.

TotalEnergies remains committed to increasing electricity production from 41 terawatt hours in 2024 to over 100TWh by 2030, despite challenges such as delays to a US offshore wind farm project.

Macro hedge funds are increasingly turning to currency option trades that exclude the US dollar, as they navigate market volatility prompted by concerns over the US economy, according to a report by Bloomberg citing data from the Depositary Trust Clearing Corp (DTCC).

On Monday, options trades involving the euro and yen dominated DTCC activity, with the two currencies making up more than half of all transactions. This shift came as US tech stocks suffered their steepest decline since 2022.

According to Morgan Stanley strategists, long euro positions have surged to their highest levels since 2020, following a strong euro rally. The currency gained momentum after German Chancellor-in-waiting Friedrich Merz pledged to boost government spending.

The Federal Reserve’s cautious stance on interest rate cuts, as signalled by Chair Jerome Powell, has also bolstered demand for non-dollar currency trades. Additionally, the threat of US tariffs next month has heightened concerns about pressure on various currencies.

Hedge funds have increased their exposure to euro trades against Asian and commodity-linked currencies, including the Australian dollar, Canadian dollar, and offshore yuan, according to Mukund Daga, head of foreign-exchange options for Asia at Barclays.

Interest in euro-sterling and euro-Swiss franc options has also risen, according to Sagar Sambrani, a senior foreign-exchange options trader at Nomura International Plc. Euro-dollar options trading volumes on DTCC meanwhile, were down more than 60% from their peak on 5 March, suggesting a cooling in demand for dollar-based trades.

The euro gained as much as 0.8% versus the dollar on Tuesday, further supported by reports that Germany’s Green Party is close to securing a defence spending deal.

Options trades involving the yen against currencies other than the dollar are also gaining traction, according to Sambrani, despite slowing momentum for a stronger yen.