A hedge fund is a type of alternative investment that collects capital from an individual or institutional investors to invest in different types of assets. These assets could be real estate, currencies, stocks, debt and more. The hedge funds often deploy complex strategies to choose the assets, as well as manage their portfolio. The primary objective of a hedge fund is to maximize the returns and eliminate the risk for the investors, irrespective of the market movement. Hedge funds are subjected to fewer regulations when compared to mutual funds and other investment vehicles, and thus, are generally accessible only to the accredited investors. If you also have an appetite to invest through hedge funds, then detailed below are the ten biggest hedge funds in the UK.

Ten biggest hedge funds in the UK

Following are the ten biggest hedge funds in the UK on the basis of assets under management (AUM):

Capula Investment Management LLP

It is a London-based hedge fund with offices in Tokyo, Hong Kong, New York and Greenwich, Connecticut, USA. Capula was founded by Yan Huo and Masao Asai in 2005. The company manages fixed income trading, enhanced fixed income products, volatility, macro trading and tail risk strategies. Capula had $45 billion in assets under management in 2018, according to hedgelists.

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Winton Capital Management

Winton Capital was founded by David Harding in 1997. It makes investment decisions by using scientific methods, as well as investment technology. The company offers investment management and advisory services to its clients globally. In 2018, this hedge fund had more than $21 billion in assets under management.

Egerton Capital

John Armitage and William Bollinger founded Egerton Capital in 1994. The company carries out its in-house research and uses a fundamental method with a bottom-up investment approach to come up with a portfolio that is “dynamic, eclectic, and uncorrelated.” Also, the hedge fund effectively follows a diversification strategy, both geographically and through sectors. Egerton Capital primarily invests in companies with attractive valuations and significant upside potential. In 2018, the hedge fund had more than $17 billion in assets under management.

Cheyne Capital

Cheyne Capital was founded in 1999 by Jonathan Lourie and Stuart Fiertz, who are currently its CEO and President, respectively. It came out with its first fund in 2000. Cheyne Capital specializes in Convertible Bonds, Social Property Impact, Event Driven Investing, Real Estate Debt, and Corporate Credit. It has offices in London, Switzerland, Bermuda and New York City. In 2018, the hedge fund had more than $16 billion in assets under management.

Alcentra

It is a global asset management firm that focuses on sub-investment grade corporate credit, which covers a wide range of investment possibilities, including Distressed Debt, Secured Loans, High Yield Bonds, Direct Lending, Structured Credit and more. Alcentra was founded in 2002 and has offices in London, Boston, New York and Singapore. In 2018, the hedge fund had more than $13 billion in assets under management.

Oxford Asset Management

This hedge fund was founded in 2004 and is based out of Oxford, UK. Oxford Asset describes itself as a quantitative research and technology company that utilizes computer-based models to make investing decisions. This hedge fund had significant investments in the information technology sector and the health care sector. In 2018, the hedge fund had about $13 billion in assets under management, compared to under $1 billion back in 2010.

Algebris Investments

Algebris Investments is an independent global asset manager focusing on long-only and alternative investment strategies. It was founded in 2006 by Davide Serra, and it has offices in London, Milan, Luxembourg, Dublin, Boston, Singapore and Tokyo. As per the company, its mission is to generate long-term stable income for investors. In 2018, the hedge fund had over $12 billion in assets under management.

Polar Capital Partners

It is a London-based investment management company founded in 2001. Polar Capital works as a subsidiary company of Polar Capital Holdings. The company offers portfolio management and advisory services to mostly all business entities, be it HNIs, charitable organizations, pooled investment vehicles, collateralized debt obligations, corporations and more. It also has offices in Tokyo, Connecticut, Jersey and Geneva. In 2018, the hedge fund had almost $12 billion in assets under management.

HSBC Alternative Investments

Founded in 1993, HSBC Alternative Investments is based out of London. It offers investment management and investment advisory services. The company works to design hedge fund, real estate and private equity solutions for institutional, as well as private investors. In 2018, the company had over $11 billion in assets under management.

Lindsell Train Limited

Lindsell Train, founded in 2000, is an equity investment manager that offers portfolio management and financial advisory services. It offers its services to insurance companies, charitable institutions, foundations, multi-manager funds and more. In 2018, the company had over $11 billion in assets under management.

Alternative asset manager Cheyne Capital Management (UK) LLP (Cheyne Capital) has provided a EUR96 million senior loan to finance the refurbishment of a large office building in Paris, France.

This investment marks the latest stage in the growth of Cheyne’s French lending platform, which has originated EUR450 million in the past 18 months.  

The property, Colisée II, comprises 11,488 sq m of office space, as well as 627 sq m of terrace, and forms part of a broader 70,000 sq m building complex which offers a number of shared services to tenants, including a restaurant and a swimming pool. It is located in Clichy, adjacent to the 17th arrondissement, and benefits from strong transport links, being located just 500m from the Réseau Express Régional (RER) and 400m from the future line 14 metro station Saint Ouen, one of the future transportation hubs of the ‘Grand Paris’.

The sponsor, Cain International, intends to carry out extensive refurbishments and to add a significant extension to the property. The newly refurbished building will meet the highest quality and environmental standards and is part of a wider regeneration scheme for the area. FREO is acting as the operating partner.

Raphael Smadja, Head of French Origination at Cheyne Real Estate, says: “We specialise in identifying senior lending opportunities in value-add or development assets in attractive locations with defensive loan-to-values. This investment is an example of this. We see Clichy as a promising area, one which benefits from proximity to Paris city centre but also offering more space – both in-and-outdoor – at a more affordable rate. We are also confident that our partners, Cain and FREO, will complete the property to the highest standards, making this a very attractive property for tenants in line with the broader regeneration of Clichy.”

The investment comes from the seventh vintage of Cheyne’s CRECH programme, the firm’s real estate direct lending strategy, which launched in 2011.

A pioneering new housing estate has risen from the ground on the site of a former school in Bristol.

Aerial images shared with Bristol Live show progress at the Elderberry Walk development in Southmead, on the site of the former Dunmail Primary School.

The 161-home development has a mix of six different types of tenure, which is said to be a UK-first, and the first residents should be moving in at the start of 2021.

Information on the scheme’s website enthuses: “The housing development is the first of its kind in the UK, bringing together a housing association, a community investment company and private sector capital to provide much needed high quality affordable homes to rent and buy.

“Whilst work had to stop on site for a brief period due to Covid-19, work has recommenced and we look forward to delivering the rest of the 161 new homes before the end of 2021.”

It describes the site as a “landmark development”, focusing on “beautiful, sustainable housing with a strong sense of community”.

United Communities is working to deliver the scheme along with Bristol and Bath Regional Capital, Cheyne Capital Investment and Bristol City Council.

The council and Housing England are helping to fund the development, which will provide 77 affordable homes (48 per cent) for rent and shared ownership.

Six types of tenure will be available to residents in total:

• Ethical market rent – Fully priced rentals with longer tenancies, and a community landlord with an ethical mission. Compliance with the Acorn Silver Standard
• Key worker rental – 10 per cent discounted rentals with longer tenancies aimed at local key workers
• Rent to buy – Fully priced rentals for five years, deposit paid for by the finance company if the tenant exercises the option to buy their home
• Affordable rent – National Planning Policy Compliant delivered through a housing association
• Shared ownership
• For sale – Cheyne will offer 25 homes for sale.

The rent-to-buy model is also said to be a first for the country’s private sector.

Homes will range in size from one and two-bedroom apartments to two, three and four-bedroom houses.

In an update shared yesterday (Monday), United Communities said the first homes should be ready to move in to from early 2021.

Contractors Engie began construction in July 2018, after planning was approved in August 2017.

An aerial image was shared by United Communities on Twitter last week, showing the buildings taking shape.

Mayor of Bristol Marvin Rees attended the ground-breaking ceremony with others including Grand Designs presenter Kevin McCloud, whose company HAB Housing is based in Bristol.

Many of the homes in phase one of the scheme, which will be first to be finished, have already been reserved.

However, a United Communities spokesperson said there is still availability across the wider scheme and people can register their interest here.

Cheyne Strategic Value Credit, part of investment fund Cheyne Capital, is said to have concluded its acquisition of Italian packaging company Irplast.

In tandem with the takeover, which Irplast said allows it to further boost its international development, the injection of new funds will also increase the firm’s capital structure. These include a bond for EUR 39m, entirely subscribed by Cheyne, as well as a short-term credit line of EUR 20m from Banca IFIS (Venice / Italy; http://www.bancaifis.it). In addition, another EUR 3m of capital funds is being invested, ensuring new liquidity to strengthen the firm’s assets.

Development plans include optimising Irplast’s film manufacturing process, which will progressively incorporate renewable raw materials and those from chemical recycling to cut CO₂ emissions and close the loop on packaging products.

Irplast added that its goal is also to maintain the sales growth of recent years and accelerate further margin improvement. The company generated turnover of EUR 97.1m in 2019 and is forecasting a small growth in sales in 2020 and a 12% rise in EBITDA.

Employing 350 people, Irplast has three production sites in Italy – one in Empoli and two in Atessa – producing 44,000 t/y of BOPP film.

A London house builder has announced that it has secured £75m of funding for the transformation of a former car factory into a residential development.

Strawberry Star, an international house builder based in London, has secured the funding from Cheyne Capital to support its ‘Lu2on’ development.

Lu2on is set to be the first mixed use development in Luton, and will see the former Vauxhall Motors factory provide 877 residential units.

The development is set to be completed by the end of 2021.

Santhosh Gowda, chairman of Strawberry Star Group, commented, “Lu2on by Strawberry Star is the first mixed-use development in Luton, providing attractive, high-quality homes as well as retail and commercial facilities.

“The development is supporting the regeneration of the area and contributing to the economic growth of the town.

“We are working closely with the local community and the council, to support inclusive growth. We are delighted about our new partnership with Cheyne Capital, and it signifies confidence in us both as a developer and our vision for the scheme.

Richard Howe of Cheyne Capital added: “At Cheyne, we capitalise on opportunities in direct real estate lending; the investment approach combines a comprehensive valuation of the property assets with a detailed analysis of the debt structure in order to identify investments offering attractive yields and robust downside protection.

“By transacting on this debt recapitalisation we have further demonstrated our ability to source and provide innovative financial solutions in an ever changing and challenging market.

“We were impressed with Strawberry Star’s track record as a developer in the UK property market and are delighted to support them in bringing to market this fantastic mixed-use development to Luton.”

Strawberry Star, a London-based international house builder, has secured GBP75 million in funding from Cheyne Capital, for its mixed-use development Lu2on, which is on track for completion by the end of 2021.Lu2on is located in one of London’s top commuter towns, owing to its connectivity and value for money. The 6.8 acre site was formally part of the Vauxhall Motors factory where some of Britain’s most iconic and best-loved cars were built. Once complete, the development will bring forward 877 residential units, including studios, one and two-bedroom apartments, and first-class facilities such as private roof gardens and 24-hour concierge. Santhosh Gowda, Chairman, Strawberry Star Group, says: “Lu2on by Strawberry Star is the first mixed-use development in Luton, providing attractive, high-quality homes as well as retail and commercial facilities. 

The development is supporting the regeneration of the area and contributing to the economic growth of the town. We are working closely with the local community and the Council, to support inclusive growth. We are delighted about our new partnership with Cheyne Capital, and it signifies confidence in us both as a developer and our vision for the scheme. Richard Howe of Cheyne Capital, says: “At Cheyne, we capitalise on opportunities in direct real estate lending; the investment approach combines a comprehensive valuation of the property assets with a detailed analysis of the debt structure in order to identify investments offering attractive yields and robust downside protection. By transacting on this debt recapitalisation we have further demonstrated our ability to source and provide innovative financial solutions in an ever changing and challenging market. We were impressed with Strawberry Star’s track record as a developer in the UK property market and are delighted to support them in bringing to market this fantastic mixed-use development to Luton”. 

The funding will finance the construction of Phase 1 of Lu2on, comprising 401 units. Lu2on has generated interest among buyers, with 60 per cent of the residential units under Phase 1 already sold. Lu2on has won two awards – Best Mixed Use Development in the UK with a 5-star rating at the International Property Awards 2019 and the Best Offplan Development Award at the First Time Buyers Readers Award 2019. The average house price in Luton is GBP261,124 making it one of the most affordable commuter towns for London, with house price growth of 13 per cent since 2016 – which is almost 3 per cent greater than London, where houses prices have increased by only 5 per cent in the same time. Investors will also be encouraged by yields of approximately 5 per cent in the buy to let market. The area also benefits from the Luton Airport Enterprise consisting over 395 acres of land. The total number of jobs created by the Enterprise Zone is expected to exceed 10,000, adding further housing demand in the city. With off-plan sales soaring, Lu2on’s future community is beginning to take shape with phase one of Lu2on expected to be complete by Q4 2021.

The London-based investment company Cheyne Capital has taken over the Italian plastic film manufacturer Irplast. According to a press release published by Irplast, the transaction was closed in early September. However, no information is available on the exact amount of the company shares controlled by Cheyne Capital and on the financial details of the transaction. The entry of Cheyne Capital is intended to strengthen Irplast’s capital structure and enable further investments in the company’s development. For this purpose, the issue of a bond with a volume of 39 million euros, which will be fully subscribed by Cheyne SVC, as well as the taking out of a short-term loan of 20 million euros with Banca IFIS are already planned. Irplast plans, among other things, to invest in the increased use of recycled and recyclable materials in film production in order to contribute to a further reduction in CO2 emissions and to the establishment of a circular economy in the packaging industry. Irplast CEO Fausto Cosi stated: “This entry will enable Irplast to make some key investments that are necessary for our development plans, particularly in the area of environmentally sustainable products, as well as for the confirmation of our market-leading position in international special markets. The trust and confidence of our new investors shows this outstanding Potential of our company and are a very strong incentive to continue our growth strategy. ” Irplast produces and processes BOPP foils, the range primarily includes printed foil products as well as labels and adhesive tapes. In three plants at Empoli near Florence and Atessa in the Abruzzo region, the company has capacities for 44,000 tons of film and over 500 million square meters of film products per year. More than three quarters of the production is exported. In the 2019 financial year, Irplast achieved sales of EUR 97.1 million.

Backstop says its new offering introduces an ‘unprecedented level of self-service dashboard configuration capabilities’, bucking the industry norm of requiring users to submit a ticket for each instance of their pipeline views, which can take developers weeks, or months, to fulfil. In addition, capital raising teams will also now have immediate access to embedded analytics, with the ability to create new visualisations of data on the fly.

“At Cheyne, we have always invested in the highest-quality systems and technology to provide the best service and infrastructure to our clients,” says Sean Macdonald, Partner & Chief Operating Officer at Cheyne Capital. “As our firm has continued to grow, we’ve evolved our processes and platforms to better serve our clients and, as part of this, we leverage the Backstop platform to inform our business decisions every day. Being able to see performance data the way we want to ‘in the moment’ is crucial, but to have efficient, intuitive dashboards that can present high-level information and more in-depth data as required, helps us make better decisions.”

Backstop’s Capital-Raising Dashboards provides business development leads at alternative asset management firms with quick, easy and intuitive access to real-time KPIs and performance data on their teams, such as their team’s progress toward quota, pipeline health, win rates, deal velocity, and a clear, comprehensive view of which investors should be prioritised with the enhanced ability to focus on the right opportunities at the right time. New visualisation tools within Capital-Raising Dashboards also offer users the flexibility to slice and dice data by geography, expected close date, opportunity stage and probability, as well as seamless report generation for management and other stakeholders.

“Capital-Raising Dashboards is not a generic pipeline management tool,” says Adam Hoit, VP of Product, Backstop Solutions Group. “It is built specifically to meet the needs of fund-raising teams at alternative asset management firms. This means no more static tools resulting in stale data, problematic issues with version control, confusion that results from data living in different applications, or users having to attempt to retrofit their workflows into limited, out-of-the-box platforms. With Backstop’s Capital-Raising Dashboards, heads of business development teams now have a single source of truth that provides a comprehensive picture of the entire pipeline, allowing them to focus their team’s efforts on the most impactful opportunities and make decisions informed by up-to-the-minute data.”

Cheyne Capital Management (U.K.) closed European credit hedge fund Cheyne European Strategic Value Credit Fund SCS SICAV-SIF at €1 billion ($1.13 billion), spokesman Ryan FitzGibbon said in an email.

The firm closed the fund at €1 billion, even though there were investors with €400 million more that wanted to invest in the fund, Mr. FitzGibbon said.

The fund was launched a year ago by Cheyne Capital as a value-oriented, credit strategy seeking to take advantage of the sale of legacy midmarket corporate loans by European banks as well as the increased dislocation and illiquidity in subinvestment-grade credit.

“With crowded positioning in large-cap situations and unattractive valuations in mainstream subinvestment-grade credit markets, we believe this midmarket segment represents an attractive opportunity,” CIO Anthony Robertson said in a statement.

Investors in the fund include the $29.1 billion Texas County & District Retirement System, Austin.

Alternative asset manager Cheyne Capital Management (Cheyne Capital) has closed its inaugural European Strategic Value Credit Fund (SVC) having scaled back subscriptions to the Fund’s capacity limit of EUR1 billion.

The Fund, launched one year ago and managed by veteran credit investor Anthony Robertson, employs a value-oriented, opportunistic credit strategy which seeks to capitalise on the accelerated sell-down of legacy mid-market corporate loans by European banks, and to take advantage of increased dislocation and heightened illiquidity in sub-investment grade credit markets as the current late-stage credit cycle advances.

The Fund’s investor base comprises a wide range of institutional investors across Europe, the Nordics, North America and the Middle East, including public and corporate pension plans, insurance companies, endowments and foundations, and a sovereign wealth fund.

“SVC’s strategy is a perfect fit with Cheyne’s mission to seek to uncover attractive, uncrowded investment opportunities presented by dislocations and to identify the best ways of delivering their value to investors,” says Jonathan Lourie (pictured), CEO and co-Founder of Cheyne Capital. “The strong demand we have seen from investors across geographies reflects the growing need and desire to diversify their fixed income and private credit investment portfolios into opportunistic strategies that will address the dynamics presented by changing market cycles.”

The Fund’s focus is on acquiring the debt of stressed middle-market businesses, with average transaction sizes of EUR10 – 50 million, which fall below the radar and mandate of larger distressed and special situations funds. It will aim to hold between 25 and 30 positions and has already deployed capital into eight investments across continental Europe.

“With crowded positioning in large-cap situations and unattractive valuations in mainstream sub-investment grade credit markets, we believe this mid-market segment represents an attractive opportunity for those with sufficient depth of expertise and origination capability in the relevant European markets,” says Anthony Robertson, CIO of Cheyne Strategic Value Credit. ?”We are delighted to have assembled such a collectively high profile and diverse group of investors as partners in this endeavour, and we are looking forward to a long and successful collaboration.”

The successful close follows Robertson’s establishment of the Cheyne Strategic Value Credit business last year, which has seen him build a 12-strong team and extensive origination platform covering public and private debt markets. Robertson joined Cheyne from BlueBay, having previously headed the firm’s EUR14 billion Global Leveraged Finance group.

Source: HedgeWeek