Hedge Funds: Griffin's Miami, Bets on the Pound
D.E. Shaw is relocating its Midtown headquarters to the far west side of Manhattan. The firm has signed a lease at Two Manhattan West, spanning roughly 283,000 square feet across eight floors. Currently based at 1166 Avenue of the Americas, D.E. Shaw plans to move to the new skyscraper in 2024.
Hedge funds ramped up bullish bets on the pound just days before the UK government’s unexpectedly large tax cuts sent the currency tumbling. Leveraged investors added a net 13,488 long contracts during the week to Sept. 20, the most since March, data from the Commodity Futures Trading Commission show.
The Brazilian hedge-fund managers who posted the biggest profits during the country’s last presidential election are piling into shares of utility companies ahead of this year’s vote. Marcos Peixoto and Joao Braga say domestic stocks look ripe for gains on the back of stable or declining interest rates, better-than-forecast economic growth and historically low valuations.
Insight
Griffin Brings Billions to Miami With Political Wind at His Back
By Amanda L Gordon
In a few years and change, if everything goes to plan, Miami will look far different than it does today.
There will still be nightclubs, Little Havana, perhaps even the crypto diehards. But alongside them: programmers and portfolio managers filling the streets of Brickell and driving breathtaking profits inside the state-of-the-art, built-from-scratch global headquarters of Citadel and Citadel Securities. Plus legions of lawyers, accountants and hedge-fund hopefuls following the money to an enduring Wall Street South that outlives the Covid-19 pandemic.
This is the vision of Ken Griffin, instantly Florida’s richest person after moving his family and financial empire to Miami from Chicago. Depending on whom you ask, his maneuvers conjure Niccolo Machiavelli or Ayn Rand, Robert Moses or David Rockefeller. With a $29.6 billion fortune, he’s a force in business, philanthropy and, especially of late, politics.
Some Miamians are more enthusiastic than others. Proponents point to the multiplier effect on the local economy from thousands of well-paid workers, with everyone from Jeb Bush to Jorge Perez viewing Citadel as a catalyst that turns Miami into a new US capital of high finance and tech, with all the infrastructure and culture that comes with it. Skeptics question which communities will be displaced in the process — and whether Griffin has bigger plans in the works.
The Citadel founder is attempting a rare feat: to pick up and move at the prime of his career, at a time when his business is thriving, to a more malleable city where the wind is firmly at his back. Instead of a foil like billionaire Democrat J.B. Pritzker in the state capitol, he has a like-minded governor, Republican Ron DeSantis, who Griffin said he’d back for president in 2024, even if up against Donald Trump.
Griffin, 53, hasn’t put forth a formal agenda or made splashy donations. The site of Citadel’s headquarters-to-be — a gleaming waterfront tower, with a wish list that includes a helipad, a marina and windows that open to Biscayne Bay — is, for now, a vacant lot. He plans to get his family and colleagues settled and listen to South Florida’s needs before making his presence felt, both professionally and philanthropically, in the region where he was born and raised.But make no mistake: He plans to have an impact.
“We’re not sort of in — we’re all in,” Griffin said in an interview in Miami.
Market Calls
Edouard de Langlade, EDL founder, says the Bank of England will be forced to act to stabilize the UK’s currency and bond markets. He had been betting on a fall in pound and took profits as the currency weakened. He said he has retained a fifth of his wagers against the currency and is betting against UK stocks in expectation of higher interest rates, which he believes could eventually hit more than 10%.
Christopher Yanney and KC Baer, founders of CKC Capital, say that as the Federal Reserve tightens, the economy could swing into recession faster than investors are prepared for, and they’re focusing on shorter-term bonds for both junk bond and investment-grade debt.
Returns
Returns were compiled from people familiar, investor letters and other Bloomberg News reporting.
Capital Fund Management’s flagship fund has returned about 21% in 2022, set for its best performance in 17 years as inflation-spurred market swings fuel a comeback for quant traders. CFM’s multi-strategy Stratus fund has been boosted by a nearly 40% return from its Discus futures-trading program, as well as by volatility trading and statistical arbitrage in stocks, according to a person familiar with the matter.
H2O Asset Management said its Allegro Fund gained about 8.14% in August. The Vivace Fund was up 5.38% for the same period, the firm said in a statement.
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