- According to this Wall Street Journal article on some of the top buy-side managers deciding to host their own mixers with corporate America, Wall Street may have to give Hitch a call to bring back the romance between bankers and investors. The article covers five investors, controlling $7T in assets, which are banding together to host their first conference in Boston during the spring of 2020, featuring exclusively one-on-one meetings organized between C-suite and buy-side analysts. Coming off years of asset outflows to passive index and ETF shops, it’s unsurprising that the active investment community is looking to both control costs and their interactions in a more proactive fashion. Technology and the access to information is allowing for far more direct conduits between corporates and the buy-side than ever before, and this trend is only likely to amp up. Will this lead to competing conferences, with musical acts, champagne fountains and overflowing buffet tables? What’s going to be the future of bringing together the top executives with the top buy-side managers, and what role will the sell-side play? Time will tell. (Ari Davies)
- The WSJ published an article reporting that $1.7 billion investment firm Adamas Partners LLC is shutting down. Known as “an absolute return fund-of-funds manager”, Adamas was a way for investors to get access to the hottest hedge funds when it first opened its doors in the early 2000s. The Boston-based firm may be small compared to the largest fund-of-fund investors, but its most notable hedge fund investments have included Baupost Group LLC, Farallon Capital and Lone Pine Capital, LLC. People familiar with the investment said that Baupost’s returns have trailed the S&P 500 over the past couple of years, and also happened to be Adamas’s largest play.
This follows a number of shutdowns from both fund of funds and hedge funds, as the loss of assets to passive managers and asset owner’s aversion to high fees has led many firms to close up shop and return capital. The count of fund of funds has nearly halved since the financial crisis, from 2,462 such funds in 2007 to 1,321 as of the first quarter of this year, according to researcher HFR Inc. Passive investment is the genie that’s not going back into Aladdin’s bottle, and its long-term impact on funding for the hedge fund community can’t be understated. (Meghan McLain)