• Home
  • About Us
  • Contact
  • Subscribe
  • Your Account
  • Login
No Result
View All Result
Tuesday, June 6, 2023
Alternatives Watch
  • Home
  • Hedge Funds
    • Manager News
    • Mandates
    • Service Provider News
    • CTAs/Managed Futures
  • Private Equity
    • Manager News
    • Mandates
    • Service Provider News
  • Private Credit
    • Manager News
    • Mandates
    • Service Provider News
  • RE/Infrastructure
    • Manager News
    • Mandates
    • Service Provider News
  • Investor News
    • Endowments and Foundations
    • ESG
    • Pensions
    • Platforms
    • Consultants
  • Research
    • Investor Scorecard
    • Manager Scorecard
  • Subscribe
  • Home
  • Hedge Funds
    • Manager News
    • Mandates
    • Service Provider News
    • CTAs/Managed Futures
  • Private Equity
    • Manager News
    • Mandates
    • Service Provider News
  • Private Credit
    • Manager News
    • Mandates
    • Service Provider News
  • RE/Infrastructure
    • Manager News
    • Mandates
    • Service Provider News
  • Investor News
    • Endowments and Foundations
    • ESG
    • Pensions
    • Platforms
    • Consultants
  • Research
    • Investor Scorecard
    • Manager Scorecard
  • Subscribe
No Result
View All Result
Alternatives Watch
No Result
View All Result

Hedge fund managers cautious ahead of U.S. presidential election

Jennifer BanzacabyJennifer Banzaca
November 2, 2020
in Hedge Funds, Manager News
Hedge fund managers cautious ahead of U.S. presidential election

By Element5/Pexels

ShareTweetShareSendSend

Hedge fund managers have been repositioning and reviewing their exposures in an effort to achieve as balanced a portfolio as possible heading into the U.S. presidential election on November 3.

According to Lyxor Cross Asset Research, hedge fund managers are shaving off some of their risks and neutralizing their most directional calls.

Jim Neumann, chief investment officer at Sussex Partners, added that based on the longevity of the risk market rally, his firm has been advocating managers add a component of uncorrelated assets to fund portfolios.

“This would include things like relative value volatility and short-term trading strategies that can deal with choppy markets and fast pricing.”

While Lyxor Cross Asset Research said prospects for a Donald Trump reelection look slim, hedge fund managers are preparing for any scenario — whether a win for Joe Biden, a Trump victory or a contested election.

Neumann added that managers must also consider election results for the Senate that might have an effect on markets.

According to Lyxor, Senate elections might be even more pivotal in defining future U.S. policies, including stimulus, taxes, and wages. One-third of the 100 Senate seats will be contested, 10 of which are likely to be decisive. Republicans have a tight 53-47 majority, requiring a net 3 gain for Democrats to take control if Biden is elected, Lyxor’s report noted.

Should Biden win, Neumann said could mean higher corporate taxes and higher regulation. There will be more of a regulatory stranglehold on fossil fuels, which would then have a noticeable economic fallout.

“People are worried about directional, long-only risk. I think the people who should have a fair amount of concern, and probably do, are the private equity managers. They have long equity positions that are very levered,” Neumann noted.

However, “green” investing and ESG investments could increase following a Biden victory.

“In the past there has been suspicion on the movement towards green energy, particularly in the energy sector, because that requires massive government subsidies that largely haven’t been available in the past four years,” Neumann explained.

“Because many impact investing companies were not seen as economically viable, hedge funds largely stayed away. However, if an ESG company could pay for itself and could produce returns in an environment with more ‘green friendly’ regulations, there could be interest in moving in that direction,” Neumann added.

If U.S. presidential election results are contested, Neumann said it could be more difficult to trade in the weeks and months following the election while trying to determine a winner as there will be more daily volatility and less positioning.

However, Neumann said relative value volatility strategies could benefit from the uncertainly of a contested election. “In our portfolios, we have elements that would allow us to take advantage of volatility and take advantage of choppy markets and I think managers who are similarly positioned will be fine during this time,” he said. “In a contested election scenario you are unlikely to see a clear trend one way or the other so you’ll have to be able to balance your bets and be able to move your positions around quickly and more defensive strategies will serve that purpose.”

While Lyxor research said a Trump win was unlikely, Neumann pointed out that Trump is more business friendly, including lower taxes and regulation, which could mean a “little bit of a rally” immediately after the election.

Tags: Long-onlySussex Partners
ShareTweetShareSendSend
Previous Post

Pemberton pinpoints European mid-market opportunity for global clients

Next Post

AW Top 10 for October

Related Posts

People moves in the alternative investments industry
Consultants

People moves for week of June 2

Activist investor Jana Partners escalates Freshpet battle with court filing
Hedge Funds

Activist investor Jana Partners escalates Freshpet battle with court filing

Rockhampton shuts pan-Asia fund
Hedge Funds

Rockhampton shuts pan-Asia fund

Millennium hires ex-Balyasny analyst Starikovsky as senior PM
Hedge Funds

Millennium hires ex-Balyasny analyst Starikovsky as senior PM

Evanston Capital: Concentrated bets to tame complex markets
Hedge Funds

Evanston Capital: Concentrated bets to tame complex markets

Next Post
AW top 10 for October

AW Top 10 for October

Log In/Out

Lost your password?

Search the AW Archives

No Result
View All Result

Recent News

Antares hires in the U.K.

Antares hires in the U.K.

Private equity mega-deals shine

Private equity mega-deals shine

HPS attracts $10bn for senior lending

HPS attracts $10bn for senior lending

Music Beats Cancer supports early stage biotechs, plans NYC benefit concert

Music Beats Cancer supports early stage biotechs, plans NYC benefit concert

Be an Alts Insider

Sign up for your FREE daily alts news briefing

Subscribe

Subscribe to AW
Alternatives Watch

© 2019-2022, All Rights Reserved  |  BMV Digital

Navigate Site

  • Investor News
  • Private Equity
  • Private Credit
  • Hedge Funds
  • Real Estate/Infrastructure
  • Subscribe
  • Your Membership
  • Terms of Service
  • Privacy Policy

Follow Us

No Result
View All Result
  • Home
  • Hedge Funds
    • Manager News
    • Mandates
    • Service Provider News
    • CTAs/Managed Futures
  • Private Equity
    • Manager News
    • Mandates
    • Service Provider News
  • Private Credit
    • Manager News
    • Mandates
    • Service Provider News
  • RE/Infrastructure
    • Manager News
    • Mandates
    • Service Provider News
  • Investor News
    • Endowments and Foundations
    • ESG
    • Pensions
    • Platforms
    • Consultants
  • Research
    • Investor Scorecard
    • Manager Scorecard
  • Subscribe

© 2019-2022, All Rights Reserved  |  BMV Digital

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Be an alts insider

Start your days in the know with our free newsletter

No, I don't want to be an alts insider

Thank

You!

Follow us
on LinkedIn

Lost your password?

This Website Uses Cookies
We use cookies on our website to provide necessary functions. By clicking “Accept”, you consent to the use of all strictly necessary cookies.
Do not sell my personal information.
Cookie Settings Accept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Save & Accept
Powered by CookieYes Logo