BDC rebounds from Covid crisis as assets reach new high

Assets managed by hedge funds in the Billion Dollar Club (BDC) climbed by 5% in 2020, as managers made gains from markets impacted by the pandemic.

Research from HFM showed the global hedge fund industry’s performance comeback during last year’s Covid crisis propelled Billion Dollar Club (BDC) assets to a new high. The collective assets of firms managing more than $1bn in hedge fund strategies shrank by 5% to $2.57trn (across 458 firms) in the first half of the year, but rebounded 10% in the second half to $2.83trn (managed by 485 firms).

Over 12 months, the BDC grew by 5% in assets and 22 in firm-count. The club now manages two thirds more assets than 10 years ago.

The BDC ‘mega club’ of firms managing more than $10bn recorded the biggest growth in the second half, as many industry giants posted standout gains and investors favoured the perceived safety of larger firms, revealed HFM’s research. The group of firms with between $3bn and $5bn recorded flat growth while the band of $1bn-$3bn firms grew 5% altogether. The smallest band, however, saw asset growth in both halves.

Hedge fund hubs of New York and Hong Kong recorded notable increases in BDC members last year, with New York home to 168 BDC firms, up eight over the year, and Hong Kong up from 30 to 43.

London suffered a decrease of three firms, from 92 to 89, but remains the second most popular industry hub for leading firms, after New York.

Take a look at some of the highlights from HFM’s recent Billion Dollar Club Summit here.

 

ACA Group: 97% of firms reporting incorrectly under MiFIR/EMIR

The vast majority of MiFIR/EMIR reports contain inaccuracies with an average of 30 errors per account, according to new research from ACA Group.

The governance, risk and compliance advisor said its latest research into the accuracy of transaction reporting under MIFIR/EMIR has shown that 97% of firms reviewed are currently reporting incorrectly. Despite this, 87% of firms said they were confident in the quality of the reports that they submit to regulators via Approved Reporting Mechanisms and Trade Repositories under MiFIR and/or EMIR, said the report. According to ACA Group, many firms assume that no direct contact from the FCA ‘means that all must be well’.

Analysis of the data from ACA Group indicates that firms’ reports featured, on average, over 30 separate error types.  

“Getting trade and transaction reporting right is going to continue to grow in importance over the next 24 months,” said Matt Chapman, Managing Director and Co-Lead of the ACA’s Regulatory Reporting, Monitoring & Assurance (ARRMA) Service, ACA Group. “Regulators have repeatedly described complete and accurate reporting as a common good as well as their growing frustrations that firms aren’t getting it right. As a result, they are making no bones about the fact that they expect prompt and significant improvement.

“Although lack of public enforcement action in relation to MiFIR and EMIR reporting may have lulled some firms into a false sense of security, they must be prepared for this to change in the months ahead, or face the consequences.”

People moves

Redhedge Asset Management has recruited Raj Dutta as Head of Business Development in its London office. Based in the firm’s head office in Green Park, Dutta will focus on managing Redhedge’s existing and future client relationships globally. He previously worked at Salomon Brothers, Goldman Sachs, Union Bancaire Privee, Oxford Asset Management and Lombard Odier.

Eric Yi has joined the outsourced trading desk of global execution and outsourced trading shop CF Global Trading. Yi joins CF Global in New York from Zanbato Securities, the late-stage secondary crossing network for private securities, where he built an extensive execution network.

Cyber-security firm Drawbridge has hired Scott DePetris as President and Chief Operating Officer and appointed him to the Board of Directors. DePetris, who has 20 years’ experience in the industry, currently serves as Executive Advisor and member of the Board of Directors of Broadway Technology, and is a board member at Salt Financial LLC.