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So, apparently a bunch of protesters managed to briefly shut down a conference of "hedge fund titans" like Dan Loeb and Marc Lasry at the Waldorf Astoria this week, according to various reports.
Our first reaction was, well, of course this was bound to happen. How long did the 2-and-20 set think they could get away with posting returns like these before their investors started storming the gates while chanting "NO ALPHA, NO PEACE!"? Surprisingly, though, it wasn't accredited investors who were doing the protesting. It was a bunch of those Occupy Wall Street types -- calling themselves Hedge Clippers -- complaining about taxes or charter schools or something, so we sort of began to lose interest at that point.
Anyway, that wasn't the biggest news in the hedge-fund world this week. The loudest chatter surrounded Bloomberg's rankings of the funds that investors have no right complaining about these days, so put down the pitchforks if you're in one of them. This Bloomberg Brief has all the alpha porn you could ever want and a lot of other pieces of must-read hedge-fund scuttlebutt, like which ones are hiring these days. One of them is 68-year-old Izzy Englander’s $34 billion Millennium Management. Watch out Izzy. If you hang a "help wanted" sign on a fund with a name like that you're going to end up being bombarded by a bunch of hipsters in skinny jeans and permanent 5 o'clock shadow all demanding to know why you don't accept resumes by Snapchat and complaining that eating cereal is too much work.
There's a Q&A with Joseph Edelman, chief executive officer of Perceptive Advisors, whose Perceptive Life Sciences fund surged 52 percent last year to land him at the top of the 50 best-performing funds with at least $1 billion. (He also sat down to chat on the "Bloomberg <GO>" program.) That certainly put him in strong contention for the coveted Gadfly Trade of the Week recognition. One of the pieces of advice from Edelman is that if you're an investor, you need to be ready to "change your mind when necessary." When we first read about the Life Sciences fund's returns last year, our initial instinct was to just give Edelman all our dough the minute that glorious moment arrives when we attain accredited investor status. But then we read that the biotech-heavy fund is down 15 to 16 percent so far this year, so we decided to take Edelman's advice and go ahead and change our minds about that.
Elsewhere in alpha-porn news this week, the manager of the Undiscovered Managers Behavioral Value Fund is being discovered after a top 1 percentile performance and a doubling in size. His approach, simply put, is to track down "dogs that are going to look better," which any college kid will tell you only requires about four or five beers.
There was also a lot of talk about Research Affiliates' calling "emerging markets" the "Trade of the Decade" which, according to our rough math, would be equivalent to about 520 Trades of the Week if it turns out to be right. Rounding out the big news of the week, David Einhorn is shorting hardhat stocks. Dan Chamby at BlackRock says stock pickers' time has come because central banks are losing power, whereas Norman Tang of the PruLev Global Macro Fund says central banks are about to open the spigots again, and that means -- you guessed it -- it's a good time to be a stock picker. Meanwhile, just about every stock picker everywhere is starting to seriously think about what will happen if a black swan lands in the White House.
However, to find the official winners of the Trade of the Week, we returned to that ranking of best hedge-fund returns. And as Simone Foxman pointed out, you can't help but notice that Steve Cohen's fingerprints are all over it.
Landing in second place on the $1 billion-or-bigger list is former SAC Capital trader Gabriel Plotkin, whose Melvin Capital fund racked up an impressive 2015 return of 47 percent thanks at least in part to riding the Amazon gravy train and other picks that sound suspiciously like they were helped by our 12-year-old daughter's discretionary spending habits (Skechers, Nike and McDonald’s). What's more impressive is that the fund gained 2.9 percent in January while the market was melting down.
And topping the junior varsity list of best-performing funds with $250 million to $1 billion in assets is Ping Jiang, another former SAC alum whose Ping Exceptional Value fund gained about 39 percent last year.
So congratulation Cohen cubs! We were already impressed by anyone who used to work at SAC who is able to keep his wits while looking over his shoulder for FBI agents in the bushes and listening for clicks on his phone, but these guys are taking it to the next level.
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