- Advertisement -
- Advertisement -

Related

Hedge Funds Anticipating French Elections Differently

Industry Report

- Advertisement -

Stockholm (HedgeNordic) – Hedge funds are displaying incongruent stances ahead of the first round of the French presidential elections in two weeks, according to Lyxor’s latest weekly brief. Following the electoral surprises of 2016 and an unpredictable race that has just been shaken up by an insurgent challenge from the far left, strategies are having different reactions.

Global Macro funds are taking a cautious approach, according to Lyxor, de-risking portfolios and favouring relative value trades, their total net exposure (USD) to equities and FX lying below the 20% mark. Event-driven funds have marginally increased European exposures, albeit that portfolio additions have been company-specific, including merger, post-merger and recapitalisation scenarios.

As for equity funds, non-European L/S funds have been steadily increasing allocations to Europe over the past half-year, seemingly oblivious to poll trends and playing to the overall European recovery. European L/S funds are doing the same, but with the addition of protective layers. These have raised net exposure since the beginning of the year, favouring cyclical sectors such as industrials, tech and materials and small caps. They have, however, also reduced financials and EU-domestic stocks since the election season kicked in, and have reinforced defensive sectors and repositioned towards non-EU/EMU European markets. Amid slightly negative global equities last week, L/S Equity funds succeeded in extracting excess returns through relative trades in Europe.

CTAs appear to the most aggressively exposed to Europe, according to Lyxor, with long equities accounting for the bulk of current directional exposure, a third of which is in Europe and which is hedged in part with long Euro-bond, short EUR and short U.S. duration.

 

 

Picture: (c) PHOTOCREO-Michal-Bednarek—shutterstock.com  

 

 

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Glenn Leaper, PhD
Glenn Leaper, PhD
Glenn W. Leaper, Associate Editor and Political Risk Analyst with Nordic Business Media AB, completed his Ph.D. in Politics and Critical Theory from Royal Holloway, University of London in 2015. He is involved with a number of initiatives, including political research, communications consulting (speechwriting), journalism and writing his post-doctoral book. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in English and a BA in International Relations.

Latest Articles

Formue Highlights Private Credit’s Role in New Economic Era

Nordic wealth manager Formue has long prided itself on delivering institutional-grade investment solutions to high-net-worth individuals. As global economic conditions shift, Formue sees an important role...

Chelonia Select Builds on Solid 2024

Stock-picking hedge fund Chelonia Select is off to a strong start in 2025 with an 8.3 percent gain through the end of May, building...

CABA Capital Expands the Flex Series

Danish fixed-income boutique CABA Capital has launched the third vintage of its leveraged, closed-end fixed income strategy: CABA Flex3. The fund aims to deliver...

Aegon AM Launches Capital Call Finance Fund

Aegon Asset Management has launched the Aegon Capital Call Finance Fund, providing institutional investors with access to the capital call finance market – a...

Evli’s Co-Investment Strategy: Opening the Door to Direct Private Equity Deals

Co-investing alongside private equity funds has become increasingly important for institutional investors seeking greater control, reduced fees, and selective deal exposure. Once reserved for...

From Loans to Layers: Navigating the CLO Capital Stack

Collateralized Loan Obligations (CLOs) play an important role in credit markets by bridging the capital needs of corporate borrowers with the return objectives of...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.