Last week "pain trade" in one chart
-> Last week's Risk On move has pushed Hedge Funds to cover their shorts, triggering violent short squeezes. The Goldman Sachs Most Shorted Stocks Basket jumped by 13% over the week. Source: Bloomberg, HolgerZ
Hedge Funds were quite short going into November
Source: Markets Mayhem, GS
Yes, Hedge funds are short equities
But don't forget the bigger picture: positioning among asset managers and leveraged funds is rather long... Source: TME, JP Morgan
Hedge funds have now built the largest short position in U.S. Treasuries in history
Source: DB, barchart
A tale of two type of investors...
who will be right? Hedge Funds continue to short treasuries at historic levels while asset managers are building their largest long positions ever recorded! Source: FT, Barchart
NASDAQ's 1999 analogy chart isn't perfect but given the amount of shorting by hedge funds and short gamma selling by dealers, a squeeze in Q4 (the historically strongest quarter) is a possibility
Source: TME
Private equity firms are redirecting their focus from mega buyouts to businesses such as private credit as higher interest rates disrupt their strategies
Over the past year, buyouts have been halted due to the impact of higher rates, resulting in private equity firms being burdened with portfolio companies acquired at high prices. In response to this challenging environment, some of the industry’s largest firms are venturing into new areas, including lending to companies, which has become more lucrative as central banks raise interest rates to combat inflation. Top executives from Apollo and Blackstone recently highlighted the potential of private credit and infrastructure investing at the annual IPEM industry conference in Paris. https://lnkd.in/exw5bqWp. Source: https://lnkd.in/eSMS2Q-k
Hedge Fund YTD returns by strategy as of August 2023
Source: www.aurum.com
