Category: Stocks

Alternative Markets Update H1 2019

30/7/2019

Alternative Markets Update H1 2019

Hedge Funds
After the difficulties for hedge funds in 2018, 2019 started strong, despite the current uncertainties, such as the Brexit, the European elections and the trade war. Only in May, there were some difficulties. This short downturn was offset and more than compensated in June, which yielded extraordinary results. Our best performing strategy was the cryptocurrency strategy, followed by US equity disruptive technology and US equity high conviction. The best performing asset class was tactical trading, which achieved a 30.78% YTD, as shown in figure 1. Furthermore, all strategies had positive return in H1 2019.

Figure 1: Overview of Performance of Different Hedge Fund Strategies: June 2019, Source: Stone Mountain Capital Research

Alternative Markets Update July 2019

12/7/2019

Alternative Markets Update July 2019

Hedge funds have achieved their best half year within the last decade, despite the controversies about hedge funds in the last year. Hedge funds overall have gained 5.7% since January 2019. Especially the month June was profitable, as hedge fund managers achieved a performance of 1.82%, which originates from a strong equity market. As of the beginning of July, only the long volatility strategy yielded negative returns, while the equity long bias strategy realized the highest gain with 10.56% in 2019 as per the Eurekahedge report below.

Figure 1: Hedge Fund Strategy Return Map, Source: Eurekahedge July 2019

Alternative Markets Update - Macro And Political Outlook June 2019

13/6/2019

Alternative Markets Update June 2019

June started in a more dynamic fashion for hedges funds are already recouped May’s losses. The anticipation of an interest rate cut this year as a result of Fed’s announcements resulted to a strong bounce back for equity markets. Equity hedge strategies profited the most during the first weeks of June, a month that so far is characterised by the trade war discussions and further tariff plans from US. Macro and CTA strategies had their bets right so far this month and they are waiting to capitalise on future volatility events. Bitcoin’s momentum slowed down in June and its price has receded from $8,740 to $7,900, reaching a market cap of $140bn. Ethereum had also a

slightly negative month so far and is keep following the same pattern as bitcoin.

Macro and Political Outlook June 2019 MacroEagle

Source: MacroEagle

Alternative Markets Update Q1 2019 - Macro and Political Outlook April 2019

16/4/2019

Alternative Markets Update Q1 2019

After a rather disappointing last year, hedge funds bounced back and are enjoying their strongest quarter since 2006 according to data from HFR, with macro and CTA strategies leading the race so far with gains driven from their fixed income exposure. Private equity is also enjoying a good first quarter with growth equity strategies raising almost $25bn and the number of deals has also increased compared to the last months of last year. Private debt fundraising on the other hand has slowed down, with larger firms claiming the largest part of the pie and creating a rather concentrated industry with high level of dry powder and uncertainty due

to geopolitical reasons. Bitcoin and Ethereum enjoyed a strong rally during the first quarter of 2019, surpassing $5,000 and $160 respectively.

Macro and Political Outlook April 2019 MacroEagle

Source: MacroEagle

Volatility As Alternative Risk Premia In the Age of The Machines

6/3/2017

Oliver Fochler
Managing Partner, CEO
Tel.: +44 7922 436360

Alexandros Kyparissis
Analyst Hedge Funds
Tel.: +44 7843 144007

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STONE MOUNTAIN CAPITAL RESEARCH PERSPECTIVE VOL.46

Alternative asset management is a growing industry, where investors seek diversification to their traditional long only investment portfolios. According to PWC, a significant increase in the assets under management (AuM) of alternatives is anticipated over the next quinquennium, reaching the levels of $15.3tn with hedge funds expected to contribute one third to that amount, which means an increase of $2tn in their AuM. Main drivers of this increase are risks associated with the geopolitical environment of investments. Major determinants of the new risk framework are Brexit discussions, major country elections and Euroscepticism in Europe, the new U.S. government and FED’s policies incertitude in the U.S., and mixed signs for growth globally. Investors are in a quandary regarding their allocations amid the current uncertainty, and are scrutinizing investment opportunities that will allow them to navigate profitably during the new era. Risk and uncertainty are two coherent terms, but different, while investors are keen on identifying the key risks in their investments. The recent spike in the number strategies (both active and passive) seeking ‘alternative risk premium’ highlights the importance of identifying risk factors.

Figure 1. Evolution of alpha and beta, Source: Stone Mountain Capital Research

Alternatives Market Update February 2017

1/3/2017

STONE MOUNTAIN CAPITAL RESEARCH PERSPECTIVE VOL.45

Stone Mountain Capital In-House Indices vs. Major Benchmark Indices Hedge Funds and Long Only As Per YTD January 2017, Stone Mountain Capital Research

February was another good month for financial and especially for equity markets, which find themselves on record levels. The series of elections in major European countries is about to begin and the rising gold and bitcoin prices may reflect the prevailing dread amongst investors. Bitcoin, which saw its price exceeding $1200 in February to a new all-time-high, constitutes the new safe haven for currency hedges and the answer to capital control actions.

The new era of presidency in the U.S. is marked with significant changes, with the Treasury Secretary announcing tax reforms in the next six months and the FED ready to increase rates. Hedge funds have momentum and they extended their January gains into February, with CTAs posting the biggest returns according to HFRX index. Equity hedge, macro and event-driven strategies exhibited similar robust performance and proving that they overcame last year’s underperformance and they gaze into the future with confidence. A Preqin survey evidence a large increase in the number of alternative investors and the performance of alternative asset classes is encouraging for the future of the industry. In debt markets, the risk retention regime leads to lower volumes in CLO issuance and fewer deals. There is an increasing appetite for private debt strategies and the economic outlook may suggest a growth in commitments over the next two years. There are more funds focusing on European credit, which is indicative of the opportunities in the space amid a relatively uncertain political scenery. Private equity fundraising continues in solid pace, while competition for deals is increasing rapidly alongside the number of funds in the market. Adding hedge funds, that compete for similar deals, makes the identification of opportunities even harder. Both private debt and equity strategies focus on the mid-market spectrum as the opportunities there are more attractive. The same scenery prevails in real estate industry with high prices and increased competition being the main feature. The investment activity slowed down and the macro outlook with interest rate growth expectations and political uncertainty are the most significant drivers behind the slowdown.

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