Brookfield expands hedge fund business to Europe

Date:

Brookfield Asset Management is expanding its hedge fund business to Europe as Canadian investment groups are betting on trading strategies that have yielded excellent returns on some of the industry’s largest companies during a pandemic.

Based in Toronto, the company’s Brookfield Hedge Fund Solutions Advisor is a trading area for multi-strategic units such as equity market neutral and event driven, and is a profitable corner of industries dominated by Citadel and Millennium Management.

To date, the unobtrusive business with approximately $ 1 billion in assets has been based on all trading teams in New York. However, people familiar with the matter say they are currently opening an office in London for the hedge fund business and are starting to hire them.

One said he plans to hire William Rushmer, a partner at Mayfair-based investment firm CZ Capital, to implement a long-short strategy on British equities in London to further expand its business.

Brookfield, which manages approximately $ 650 billion in assets worldwide and is best known for real estate, infrastructure and private equity investment, is one of the largest and most established names in the multi-manager hedge fund sector. Will be more and more opposed.

Such funds, which employ dozens or hundreds of small trader teams, have enjoyed strong performance and have raised billions of dollars from investors.

Ken Griffin’s Citadel, which manages $ 43 billion, made a profit of 26.3% last year, with revenues across credit, commodities, equities, fixed income and macro, and quantitative strategies. By 2020, it was 24.5 percent.

Millennium Management, with $ 52 billion in assets, increased by about 13% last year to 25.6% in 2020, the best performance in 20 years. Steve Cohen’s Point 72 and Balyasny also increased last year.

Funds have been supported by diversification between assets, the ability to quickly reduce risk when circumstances worsen, or the ability to dismiss unprofitable managers, and sharp price fluctuations in areas such as commodities.

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“2021 will decline as a year dominated by multi-strategic hedge funds,” said data group eVestment, noting that most of last year’s hedge fund industry inflows flowed into this sector.

According to eVestment, such funds often give trading teams autonomy within tight risk limits, rising 10.5% last year on average, slightly above the industry-wide average profit. Many investors favor these funds because of their low return volatility and their ability to make money even when managing large assets.

The success of such funding during the pandemic led to fierce Fight for talent, This has pushed top traders’ payments very high. For example, payments just to compensate top traders when they leave their rivals can now reach $ 10 million, and in some cases up to $ 20 million.

Brookfield’s hedge fund business, led by Newyork-based Jason Segel, began managing funds in 2019.

The Canadian group as a whole has invested in Europe for nearly 20 years. Assets in the region, including real estate, infrastructure and renewables, have grown from $ 6 billion in 2013 to about $ 110 billion.

Brookfield declined to comment.

laurence.fletcher@ft.com

Brookfield expands hedge fund business to Europe

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The post Brookfield expands hedge fund business to Europe appeared first on Eminetra.

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