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When major investors like hedge funds and public pensions stampede in any one direction, it sends major ripple effects through the financial markets. History tells us that in many cases, such stampedes have served as signals or warnings about what’s right around the corner. A recent report highlighted on a couple of interesting trends involving hedge funds and pensions, and historically, similar trends have signaled a rough ride in the near future. Hedge fund redemptions have soared In a report released in the end of December, Deutsche Bank analyst Masao Muraki and team identified several signals observed in 2018 and explained what they could mean for 2019. Specifically, they warned investors to prepare for a “critical” phase of the credit cycle, pointing out that 2018 finally brought a deviation from the Goldilocks market of 2017. if (typeof jQuery == ‘undefined’) { document.write(”); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Series in PDF Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. Q3 hedge fund letters, conference, scoops etc The DB team noted that liquidity is declining, which is pressuring several segments of the financial market. One factor related to this falling liquidity is the growing number of hedge fund redemptions. Redemptions have been rising steadily as investors increasingly prefer passive funds over actively-managed ones. Hedge fund redemptions came to a head in October, based on data from multiple sources, but they’ve only gotten worse since then. The DB team noted that noted that several factors have made it difficult for hedge funds to produce strong returns. “The sustained high

Article From: "Michelle Jones"   Read full article