Keep pulling the thread on Dan Fagan, Adam Blitz & Craig Bergstrom.
Assuming an aggregate gross leverage of 2.5x, the total market footprint of the hedge fund industry is estimated at $10 trillion, equivalent to half the size of the U.S. Treasury market.
The influence of multi-strategy hedge fund platforms, which employ aggressive risk-cutting guidelines, creates a risk of cascading liquidations across seemingly unrelated markets.
Historically, multi-strategy platform hedge funds have outperformed equity markets on a total return basis, while exhibiting volatility and market betas that are as low or lower than the overall hedge fund industry.
Dan Fagan believes the available pool of high-quality trading talent is insufficient to support the recent, rapid proliferation of assets under management (AUM) in the multi-strategy platform hedge fund space.
Adam Blitz warns that forced deleveraging by a mediocre multi-strategy platform fund could trigger a contagion event, causing performance issues even at top-tier platforms due to similarities in strategies and risk models.
Craig Bergstrom believes that open-ended credit hedge fund businesses are in a secular decline and will shrink significantly as capital shifts towards closed-end fund structures.
Craig Bergstrom is nervous about commercial real estate valuations and predicts there will be a real distress cycle in the sector.
Adam Blitz argues that over the last five years, the traditional illiquidity premium has inverted into an 'illiquidity discount,' where investors willingly accept lower returns for illiquid assets.
During the COVID-19 pandemic, CLOs came under significantly more stress than equivalently-rated risk in high-yield bonds.
Adam Blitz believes that liquidity risks in the current market are underrated and underappreciated by investors.
The total equity capital of the hedge fund industry is estimated at approximately $4 trillion, which is less than the combined $5 trillion market capitalization of Apple and Microsoft.
GIC's primary investment objective is to generate real returns above inflation to compound the real purchasing power for Singapore.