Silas Brown

Ken Griffin's multi-billion 💵 hedge fund empire will have a new address in London. London's luxurious office space ecosystem has been dominated by hedge funds in the last few years. Winton shattered all leasing records in 2022 to grab the most expensive office in London. Hedge fund Citadel is about to take the meaning of luxurious office space to next level with 250,000 square feet of workspace in twin skyscraper development 2FA, a joint venture between British Land and Singaporean sovereign wealth fund GIC in London's Broadgate. The Citadel deal means that the space in 2FA is already 33% pre-let, and 50% pre-let if the firm takes the optional space. #hedgefunds #luxury #london https://lnkd.in/eKnjZVDk

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ARTICLE: LPs have embraced secondaries to rebalance portfolio exposure across strategies, geographies, vintages and funds. They can now securitize positions via structured portfolios traded on the bond market. GPs are using direct secondaries, continuation funds and “strips” of portfolios to generate liquidity when exit markets sputter (as they’re doing today). Tools are also available to raise cash for firm-level objectives such as succession management or expansion.

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Rokos Capital Management and Andurand Capital Management have been prominent among hedge funds piling into the copper market, with bold bets on dramatically higher prices that have already delivered early wins. Copper surged to a record above $11,100 a ton last month, driven by a wave of speculative money that many in the industry warned was running ahead of market realities. Futures have since dropped 10% from the peak. But Rokos and Andurand, which have attracted attention with their sizable positions going into the rally, are betting on much sharper gains to come. Rokos has made a flurry of options purchases in the past several months in a bet that copper could rally to $20,000 or more over the next few years, according to people familiar with the matter. At Andurand, copper was the biggest position by market exposure at the end of April, and the trader has recently predicted that prices could hit $40,000. Those targets are well beyond the forecasts of even the most bullish Wall Street banks. The trades are part of a broader deluge of investment into the copper market, with the value of long positions held by fund managers in London and New York futures tripling this year to hit $45 billion in mid-May, blowing past previous records in exchange data going back to 2018. The influx of new money into copper has bemused some industry insiders, who point to weak demand in China and a well-supplied metal market. However, a series of mine setbacks in recent months has helped spur increasingly bullish investment bank forecasts suggesting that a long-predicted global shortage may arrive earlier than expected. The investment thesis for copper — that demand is expected to surge thanks to energy-transition demand — has also received a boost from recent excitement around artificial intelligence and data centers. Mark Burton Nishant Kumar #copper #hedgefunds #commoditytrading https://lnkd.in/e7hif76B

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Genuine question for fellow QT nerds / financial plumbing experts. The BoE MPC voted to keep the pace of Quantitative Tightening unchanged at £100bn for the next 12 months, c. 90% of which will come through a passive run-off of existing holdings, and c. 10% from active sales. Bank reserves are currently upwards of £700bn, well above the BoE’s own estimate of even the £490bn upper bound of the Preferred Minimum Range of Reserves (which should delineate between what central bankers have started calling “abundant” and “ample” reserves). In other words, by the Bank’s own reckoning, it should have lots of room to shrink its balance sheet before bank reserves start to become scarce. Fine. However, this is happening against the backdrop of exponentially growth in banks drawing on the Bank’s Short Term Repo (STR) facility – not something you would expect in an environment where every bank has “abundant” reserves. If you were sitting on the MPC, would this give you pause? Are there any risks associated with moving out of "abundant" territory too quickly, or are gilt-backed reserves just going to seamlessly get replaced with repo-backed reserves?

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Evercore collects bids for Hg-backed Danish software Trackunit 🖥️ Details on the financing, expected valuation, and bidders now live on Octus: https://lnkd.in/emApQPfi Story with Oscar Laurikka

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MY LATEST ON PRIVATE CREDIT: Blue-chip asset managers known primarily for their private-equity businesses have significantly increased private credit as a percentage of their assets under management within the past year. Private-equity giant Blackstone, with assets that rose about 7% to more than $1.06 trillion in the first quarter, increased its credit and insurance assets 13% to $329.6 billion at the end of March from $291.3 billion a year earlier. At buyout firm KKR & Co., assets managed by its credit business rose almost 12% to $260 billion at the end of this year’s first quarter from $233 billion a year earlier. Other publicly traded asset managers have also noted the increasing importance of private credit. In recent earnings reports and conference calls on the results, firm leaders cited strong returns as well as significant investor and borrower interest in debt offerings as driving forces of growth in the asset class. https://lnkd.in/ebDbhWw2

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#FCM First Class Metals PLC LSE:FCM FRA:WN9 - Operations update - Coco East and OnGold Earn-in -Field work has commenced on the Coco East property, base metal potential -The Earn-in deal with OnGold Invest Corp ("OnGold") has been renegotiated, FCM has now acquired 100% of the property. Marc J. S. CEO Commented: "In true FCM fashion we are endeavouring to put as much of the available funds 'into-the-ground', though gold prices are soaring the Coco East property has real potential for base metals. However, the very anomalous gold in lake sediment samples on the OnGold property constitute a significant target which too demands follow-up when appropriate.' https://lnkd.in/dJeKmSf3 #gold #invest #mineral #pyrite #quartz

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The gilts market is getting a bit antsy again, as economic data feed stagflation worries. UK/Germany spread tops Liz Truss level to reach highest since 1990 Asset managers say debt sustainability will become a concern if borrowing costs swing yet higher

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Pimco's Andrew Balls tells us that European markets are pricing in "benign path" on trade, and that the fallout from sweeping tariffs could push terminal rates lower in the EU and the UK "The worst version of the trade situation would be difficult ... I tend to think that we’re pricing in a fairly benign path.”

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We're asking fund sales leaders how 2024 has gone so far... Starting us off this week was Peter Ball, global head of distribution at Nomura Asset Management. I wanted to know what has worked this year. What has been less easy? What is his outlook for the rest of the year? What will you be focusing on from product, client and team perspectives? As you might expect, Peter talks about Japan, and where its place in recent market volatility leaves things, as well as efforts around India allocations. PLUS: As its is summer reading season, we're getting book recommendations from these distribution high flyers. A topical suggestion from author David Kohn. #books #summerreads #assetmanagement #sales #citywireselector #insideassetmanagement #Japan #India https://lnkd.in/eCU7rJGC

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The Bank of England warned that more private equity-backed firms are struggling as higher interest rates put pressure on the opaque industry that has swollen to $8 trillion globally. In its twice-yearly Financial Stability Report, the BOE also rebuked lenders and others in the private equity market for poor risk management practices, in an escalation of the UK’s bid to tame risks in the sector. Full story here by William Shaw and Laura Noonan https://lnkd.in/g9cnFXy8

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Interconnectivity of politics and financial markets can no longer be ignored. If you haven't had the chance yet, please read this excellent Professional Wealth Management (PWM) piece by Norman Villamin (韋立民), chief investment officer for wealth management at UBP - Union Bancaire Privée: After the US presidential election debate between Kamala Harris and Donald Trump, where Harris reversed Trump's previous gains and emerged as favourite, investors need to seek risk-managed positions in gold, hedge funds and high quality equities to shield portfolios from volatility https://lnkd.in/eAiF5SSi

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Rokos Capital Management and Andurand Capital Management have been prominent among hedge funds piling into the copper market, with bold bets on dramatically higher prices that have already delivered early wins. Copper surged to a record above $11,100 a ton last month, driven by a wave of speculative money that many in the industry warned was running ahead of market realities. Futures have since dropped 10% from the peak. But Rokos and Andurand, which have attracted attention with their sizable positions going into the rally, are betting on much sharper gains to come. Rokos has made a flurry of options purchases in the past several months in a bet that copper could rally to $20,000 or more over the next few years, according to people familiar with the matter. At Andurand, copper was the biggest position by market exposure at the end of April, and the trader has recently predicted that prices could hit $40,000. Those targets are well beyond the forecasts of even the most bullish Wall Street banks.

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The recent gyrations of financial conditions in the US are an excellent case study for the Maradona theory of monetary economics. We've seen some fairly large moves in financial conditions in the US this year; first a loosening as yields rallied and stocks rose after Powell's pivot in December, which arguably overstimulated the economy in Q1 and prompted the subsequent tightening we've been seeing since the start of April. The remarkable thing is that all of this has happened without the Fed having to lift a finger - rates have been completely flat since July last year. At our Macro Breakfast this week, my colleagues and I talked about how this is an example of what Mervyn King called the Maradona theory of central banking: One of the marvels of inflation targeting regimes (despite their faults) is how expectations do the heavy lifting for policymakers once a credible target has been established. From Lord King's 2005 speech (full speech here: https://lnkd.in/eh5ggstY.) --- "Maradona’s first “hand of God” goal was an exercise of the old “mystery and mystique” approach to central banking. His action was unexpected, time-inconsistent and against the rules. He was lucky to get away with it. His second goal, however, was an example of the power of expectations in the modern theory of interest rates. Maradona ran 60 yards from inside his own half beating five players before placing the ball in the English goal. The truly remarkable thing, however, is that, Maradona ran virtually in a straight line. How can you beat five players by running in a straight line? The answer is that the English defenders reacted to what they expected Maradona to do. Because they expected Maradona to move either left or right, he was able to go straight on. Monetary policy works in a similar way. Market interest rates react to what the central bank is expected to do. In recent years the Bank of England and other central banks have experienced periods in which they have been able to influence the path of the economy without making large moves in official interest rates. They headed in a straight line for their goals. How was that possible? Because financial markets did not expect interest rates to remain constant. They expected that rates would move either up or down. Those expectations were sufficient – at times – to stabilise private spending while official interest rates in fact moved very little. That pattern is sometimes described as “the market doing the work for us”. I prefer a different description. It is the framework of monetary policy doing the work for us." --- ...and how could I not end this post with the Goal of the Century 😉 https://lnkd.in/ekPAsrTF

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Hedge funds including Anchorage Capital Advisors and Squarepoint Capital LLP have been building positions in cobalt by buying up physical material, as tumbling spot prices and a more liquid futures market create new trading opportunities in the battery metal. Cobalt is a relatively tiny and specialized market compared with commodities like copper or oil, and prices have dropped to the lowest in more than seven years as the market is flooded with production from the Democratic Republic of Congo and Indonesia. The hedge funds’ moves are the latest sign of financial players getting involved in physical metal trades, as money flows back into commodities while oversupplied metal markets create opportunities to make a profit by buying at cheap spot prices. It’s also reviving memories from almost a decade ago, when funds including Pala Investments took advantage of weak cobalt prices to buy up piles of metal in a bet on the nascent energy transition. (The bet paid off, as prices soared over the next couple of years.) At the time, the absence of a liquid futures market meant that buying real-world cobalt was one of the only ways available to bet on rising prices. Today, the situation looks a little different. Cobalt futures trading has taken off on CME Group’s Comex exchange, creating a way for traders to hedge their physical positions in the newly liquid futures market. The ballooning surplus has also led to a widening gap between depressed spot prices and higher-priced futures on the Comex, with contracts for delivery in a year’s time having traded as much as 20% higher than spot prices. Yvonne Yue Li Mark Burton Archie Hunter #cobalt #metals #commoditytrading #hedgefunds https://lnkd.in/enMdDQTg

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COLUMN: When European electricity markets recently went haywire for 24 hours, a group of high-flying hedge funds lost money. Have some sympathy; the next losers could be ourselves as the rules don’t match the modern reality of the power market. "It’s clear that the June 25 European power prices were, at the very least, distorted — but were they incorrect? EPEX Spot followed its rules — regulations that are clear to everyone in the market, not least big hedge funds. Thus, EEX was facing prices that were narrowly correct in form, but completely wrong in nature. Were the prices “abnormal?” Yes. “Artificial?” That too. “Illogical?” For sure. But were they formally “incorrect?” No matter what it had decided, EEX would face formal complaints, and perhaps even legal challenges. So, it opted for the less risky approach." "Ultimately, everyone tried to do the right thing but still achieved a bad outcome. Both exchanges can shelter behind their rules, saying they did everything by the book. But it’s clear that the manuals are no longer fit for purpose. EEX has, too, a conflict of interest: Its ownership of EPEX Spot creates an incentive, real or perceived, to accept anything its affiliate says. A rival exchange to EPEX Spot, called Nord Pool AS, didn’t suffer technical difficulties that day, and its prices were normal. In the future, EEX should revert to using Nord Pool data too if EPEX Spot data is obviously out of sync with the wider market. In addition, the exchange should be prepared to use so-called “shadow auctions” to compute cross-border flows even when markets decouple." Bloomberg Opinion #electricity #energytransition

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Ken Griffin’s Citadel Securities has opted to establish its own brokerage operation in China after failing in its bid for Credit Suisse’s onshore business and seeing no viable alternative takeover targets. The US firm, part of Griffin’s sprawling hedge fund and trading empire, is preparing an application to the China Securities Regulatory Commission for brokerage, asset management and proprietary trading licenses, sources said. After failing to buy the Credit Suisse unit, Citadel Securities views building an operation from the ground up as the best option since most brokerages in China are fully licensed, which is less compatible with its own approach. Citadel Securities is going against the grain as most foreign banks have scaled back in China as business has cratered along with a sluggish economy, rising geopolitical risks and a crackdown on bankers and private enterprise. The move comes at an opportune time, just a week after China unveiled a bundle of stimulus measures, causing stock markets to soar. #citadelsecurities #china #financialopening #chinasecurities #uschinatension

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“As the fund prepares to step up its deal flow, the QIA is bullish on the US, where it has increased its exposure significantly over the past decade, as well as in the UK and Asia, Sowaidi said, with a focus on technology, artificial intelligence, healthcare, real estate and infrastructure. Its Golden Pass joint venture in the US with ExxonMobil, which is expected to add another 16mn to 18mn tonnes of LNG a year to the market, will come online late next year. The IMF estimated in a report two years ago that by 2027 the expansion was expected to raise the small Gulf state’s real GDP by 5.7 per cent and add about 3.5 per cent of GDP in export receipts a year. The QIA will be the main recipient of the LNG revenues, and Sowaidi said the inflows had the potential to double its size over five years.” Read more in the article below. #americanchamber #qatarbusiness #dohabusiness #investqatar #QIA

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Charles Paikert has these blunt comments about the recent unhappy experience by Goldman Sachs in the #RIA space. He points to the central argument - size of AuM - and finds it wanting. This is definitely a commentary where we would be interested in feedback, particularly from those who want to disagree. Jamie McLaughlin David DeVoe ECHELON Partners Chip Roame Stephen Harris Philip Harris Andrew Deane Rachel Fokes Theodora Viney Joseph Reilly #strategy #wealthmanagement #mergers https://lnkd.in/eu3iddV9

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