Hedge Fund News Wrap: Week Ending 01/30/15

(CNBC) – As oil prices round out a month of trading in the $40 range, hedge funds in both the U.S. and abroad are grabbing at investment opportunities in a distressed energy sector.

In recent months, a spate of money managers, including Lansdowne Partners, Avenue Capital, Carlson Capital and Blackstone’s GSO Capital unit, have been raising fresh capital to deploy in either long-short energy stock picking, credit investing, or both. At the same time, hedge-fund investors say that finding ways to home in on the distressed oil industry has been a top priority of late.

Energy “is one of our top themes,” said Charlie Krusen, whose $200 million fund of funds company, Krusen Capital Management, has fielded dozens of pitches from hedge funds and private equity shops focusing on the troubled sector in recent months.

It’s all part of a stampede for returns at a time when energy companies’ cash-intensive drilling and servicing operations have been strained in the current, cheap-crude environment.

Read the entire article at CNBC
More coverage: ValueWalk and Bloomberg Business


Citi: Hedge Fund Profits Plunge, Small Funds Hit Hardest

(FINalternatives) – The most notable change in hedge fund operating margins in 2014 was a 17 basis point improvement in operating margins for small hedge funds with average AUM of $100 million and individual fund AUM of between $0 and $350 million. Despite this improvement, Citi reports that firms in this band are still unable to cover their operating costs based solely on their management fee collections. In 2013, they posted an operating deficit of 86 basis points, but in 2014 that shortfall fell to only 69 basis points. This helped push break even for these firms looking to cover costs from management fee income down from $330 million in 2013 to only $310 million in 2014, Citi notes.

“Poor performance will be most acutely felt by small hedge fund firms,” Kaul said. “These organizations were able to use their performance fee profits in 2013 to cover their management fee operating shortfalls, but as a group, these funds simply did not generate enough performance fee revenues in 2014 to cover their gap. We see a $615 million industry-wide shortfall across this tier of firms and this is likely to result in more closures of small hedge funds.”

Read the entire article at FINalternatives
More coverage: Reuters and ValueWalk


Paul Singer’s Fund, Elliott, Takes a Stake in Informatica

(DealBook) – Over the past two years, Paul Singer’s hedge fund, Elliott Management, has successfully pushed a number of technology companies to sell themselves. Now, it appears that the $25 billion hedge fund has set its sights on a new target.

The activist investment firm disclosed on Monday that it had acquired a roughly 8 percent stake in Informatica, a specialist in data integration services with a market value of about $4 billion.

Though Elliott was circumspect in describing its motivations in a regulatory filing, the hedge fund appears likely to push its newest investment into selling itself. The firm has made a specialty of taking positions in enterprise technology companies and agitating for shifts in corporate strategy, usually by calling for a sale to a private equity firm.

Read the entire article at DealBook
More coverage: Wall Street Journal and Reuters