October 18, 2021
AIMA SmartBrief
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AIMA has partnered with ITN Productions to launch a discussion-format television programme highlighting the successes and benefits of the alternative-investment sector. "We're delighted to be able to work with ITN Productions to highlight the benefits of the alternative investment industry and showcase its crucial role in protecting savers and financing the economy," says AIMA chief executive Jack Inglis.
Full Story: Hedgeweek (London) (10/14) 
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Reversals in equity and credit markets took their toll on fund performance in September, with several hedge fund strategies slipping into negative territory, data from eVestment and BarclayHedge show. Event-driven strategies suffered the worst setback during the month, figures from eVestment show, while BarclayHedge noted 22 of the 30 strategies that it tracks registered reversals.
Full Story: Hedgeweek (London) (10/14),  Opalesque (Cyprus) (free content) (10/16) 
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With the price of uranium used for nuclear fuel at its highest level since 2012, new hedge funds and other investors are entering the market at levels not seen since June 2007. Investors say they expect to see a growing demand in the coming decades from the transition to green energy and governments' need to secure uranium supply for existing nuclear reactors.
Full Story: Financial Times (subscription required) (10/12) 
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Alternatives managers are passing on more of their administration costs to investors, survey data compiled by the Institutional Limited Partners Association show. The survey found that although management fees have remained broadly static at between 1.5% and 2.0%, one-quarter of respondents say private-equity managers are billing separately for ancillary services such as attorney fees.
Full Story: Institutional Investor (10/12) 
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The prospect of strong demand from retail investors, better hedging options, and liberalised market access have given quantitative strategies new opportunities to establish a business foothold in China.
Full Story: Financial Times (subscription required) (10/12) 
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Bidders for German corporates have adopted a new tactic to make it less attractive for hedge funds to disrupt deals through merger arbitrage, writes Chris Hughes. Instead of securing full control of a target, acquirors are instead opting to sell for a lesser stake in the target company.
Full Story: Bloomberg (10/18) 
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High-yield securities linked to collateralized loan obligations had returned over 29% this year as of August, outperforming the S&P 500's 21.5%, according to Citigroup. Analysts expect demand to continue as investors hunt strong yields offered by CLOs, despite relatively high risk.
Full Story: The Wall Street Journal (10/14),  Financial Times (subscription required) (10/14) 
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A growing number of investors have turned to alternative data sets to track the impact of disruption from the coronavirus pandemic on global logistics and supply chains. The data cover topics such as freight handling times at ports, tracking cargo vessels at sea, and plant equipment manufacturing.
Full Story: Bloomberg (10/12),  Business Insider (tiered subscription model) (10/14) 
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Regulation and Tax
Financial Conduct Authority chair Charles Randell has informed Chancellor Rishi Sunak he will be resigning a year early, a move that has surprised financial firms and prompted concerns of internal divisions at the FCA. Paul Sharma, former deputy head of the Bank of England's Prudential Regulatory Authority, said Randell's exit will be a significant loss while Nick Bayley, former head of the FCA's markets policy and international division, commented that "it's in no-one's interest to have a regulator in turmoil."
Full Story: Financial News (UK) (tiered subscription model) (10/15),  Financial Times (subscription required) (10/15),  Global Investor (subscription required) (10/15) 
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The value of cryptocurrencies has grown to the point that they could trigger a collapse of the global financial system unless governments adopt strong rules to regulate them, according to Bank of England Deputy Governor Jon Cunliffe. The $2.3 trillion current value of cryptoassets is almost double the $1.2 trillion of US sub-prime mortgages that played a key role in causing the 2008 global financial crisis, he said.
Full Story: BNN Bloomberg (Canada) (10/13),  The Guardian (London) (10/13),  Reuters (10/13),  The Block (10/13),  CoinDesk (UK) (10/13) 
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EU country representatives plan to meet this week to discuss whether to halt rules due to come into force in February 2022 that would require banks and asset managers into a mandatory "buy-in" process on trades that fail to settle. Market participants say the rules would hurt market liquidity and raise costs.
Full Story: Financial Times (subscription required) (10/12),  Global Investor (subscription required) (10/12) 
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Brexit
The London Metal Exchange says its members must develop contingency plans should the European Union decide to end temporary access to UK clearing facilities next year. "Given that we have been forewarned of the position, it is important that we take swift steps to mitigate the potential implications," the LME said in a statement.
Full Story: Reuters (10/18) 
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