This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA

(PHILIPPINES) IN.

Friday
May 27, 2016
www.bloombergbriefs.com

Ex-Brevan Howard, Moore Trader Bets on Oil for Fund NUMBER OF THE WEEK
BY WILL WAINEWRIGHT $5.5 Billion — Net investor inflows into
Luke Sadrian, a former trader at Brevan Howard Asset Management and Moore European hedge funds in April, according
Capital Management, is betting on a rising oil price with a commodities fund he’s to data compiled by eVestment, bringing
planning to start in the second half of the year. total allocations into the region for the
London-based Commodities World Capital will trade futures and options on all first four months to a net $21.4 billion.
commodities, chief investment officer Sadrian said in an e-mail Wednesday. The price
of oil will rise because of increasing tightness between the supply and demand, as well INSIDE
as the developing geopolitical and economic situation in the Middle East, he said. "Even
from these new higher prices, we see 20 percent to 40 percent upside in crude oil," he Marshall Wace's MW Eureka Fund rose
said. last month, paring this year's loss
Sadrian expects the commodities sector in general "to be much higher over the next through April to 4.5 percent: Returns in
12 to 18 months." The firm will specialize in the metals and energy sectors. "We expect Brief
base metals to become interesting from the middle of the third quarter," he said.
He is starting Commodities World Capital after four years running a separate The little short that slipped away in a
commodities fund, Sadrian Bowman Capital, alongside Andrew Bowman, who is not stampede from hedge funds: Portugal
involved in the new venture. Sadrian Bowman closed in January, according to the U.K.’s Focus
Financial Conduct Authority.
Sadrian did not specify an asset target, but said the firm was in the process of raising Emerging markets-focused hedge
money from investors. funds outperformed other parts of the
Sadrian managed money for Brevan Howard between 2004 and 2008 and Moore industry this year through April: Research
Capital between 2009 and 2012, according to his LinkedIn profile. Martin Reinke, who
was a managing director at Barclays Plc’s investment-banking unit, has joined Canada Pension's Allen is said to leave
Commodities World Capital as a partner and portfolio manager. to start his own hedge fund. Man Group
Commodities World Capital is the latest commodities startup as the sector rebounds, hires former Barclays currency head
with the price of a barrel of crude oil worth about double its low of $26 in November. Will Wynne: On the Move
Smith, a former CQS Management partner, is starting an equities fund in London named
Westbeck Capital Management to bet on oil rising. It will start trading in the first week of Odey Asset Management and
June, spokesman Jari Habib said in an e-mail. BlackRock are among money managers
that stand to gain as Banco Popular
Brent Trades Near $50 as U.S. Inventories Slide shares fall: The Short of It

Omni Event Fund CIO Melsom said the

fund is starting to allocate more capital to
Europe after seeing an increase in M&A
opportunities in the region: Spotlight

QUOTE OF THE WEEK

"It’s kind of a day of reckoning
that we face here. There will be
a shrinkage in the industry and it
will be painful. That’s going to be
pretty painful for an awful lot of
places."
Source: Bloomberg    — Blackstone Group President Tony James on
For a live version of this chart, click on image or run G #HF.BRIEF 14. the hedge fund industry in an interview with
Brent crude topped $50 for the first time since November on May 26 before also erasing gains Bloomberg TV from a conference in Toronto
as U.S. crude supplies and production declined.
— Mark Shenk
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.

May 27, 2016 Bloomberg Brief Hedge Funds Europe 2

RETURNS IN BRIEF
Marshall Wace Asset Management's April Returns
MW Eureka Fund rose 0.6 percent in its
euro share class last month, paring this
year's loss through April 30 to 4.5
percent, according to a performance
document. The $7.7 billion fund,
managed in London by firm cofounder
Paul Marshall, rose 11.1 percent last
year. The figures were confirmed in an e-
mailed statement from a spokesman for
Marshall Wace, which bets long and
short on equities.
  — Will Wainewright  
Adrigo Hedge, a Swedish long-short
equity fund that was flat in the opening
four months of 2016, lost 0.2 percent last
month, sending returns for the year into
negative territory. It is now down 0.2
percent this year through April, according
to Chief Operating Officer Stefan
Gavelin. The $279 million fund, based in
Stockholm, rose 4.6 percent last year,  
Gavelin said in an e-mail. Adrigo Asset Year-to-Date Returns to End-April
Management’s fund invests in Nordic
companies. It is managed by Goran
Tornee, Gavelin said.
— Will Wainewright
TCI Fund Management, the activist
investment firm founded by Chris Hohn,
lost 0.3 percent in the first quarter as its
holdings in carmakers Volkswagen AG
and its Porsche unit hurt performance.
The firm’s investment in Porsche fell 1.1
percent and its stake in Volkswagen
dropped 1 percent, according to a
spokesman. Reuters reported the returns
earlier. The firm’s main fund rebounded
last month, gaining 4 percent, the
spokesman said. Volkswagen’s stock
has dropped about 6 percent this year
after an emissions-cheating scandal that
erupted in 2015. The firm admitted to
rigging software on as many as 11 million Funds not mentioned in the accompanying text on this page were reported in other issues of the
diesel cars worldwide to pass emissions BRIEF. For questions, e-mail mkarsh@bloomberg.net. 
tests. TCI, in a letter to Volkswagen *Returns through April 19
board members, this month slammed
management for excessive executive pay consecutive monthly loss in April, paring very trying markets.” The Systematica
in light of the poor stock performance. this year’s return to 0.1 percent, fund also recorded losses in metals even
according to a letter to investors obtained as it switched strategy by the end of April
— Jesse Riseborough and Nishant Kumar by Bloomberg. In March, the fund from betting that prices would fall to
Systematica Investments, the $10 dropped 2 percent. Wagers against the wagering on gains. The jump in silver in
billion hedge fund run by Leda Braga, price of oil were the biggest detractor the month was countered by “choppy
slumped 7 percent in its main fund in from performance as crude rallied 20 conditions in palladium and copper,”
April on bets in energy and bonds, percent in April “putting extreme pressure according to the letter. A spokesman for
virtually wiping out gains for the year. on short positions,” Systematica said in Systematica declined to comment.
The firm’s $5 billion BlueTrend fund, the letter. In debt investing, the fund said — Jesse Riseborough and Saijel Kishan, with
which relies on complex computer U.K. and Italian government bonds “were assistance from Will Wainewright
models to make investments, posted its certainly
second
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.

May 27, 2016 Bloomberg Brief Hedge Funds Europe 3

FOCUS: PORTUGAL BET

The Little Short That Slipped Away in Stampede From Hedge Funds    
BY TOM BEARDSWORTH AND ALASTAIR
MARSH    
Toby Dodson waited six months for
his bet against a fragile Portuguese bank
to pay off.
But before the reckoning, word came
down from his hedge fund bosses at
Achievement Asset Management in
Chicago: get ready to clear out your desk
and unwind your trades, we’re shutting
down. They’d lost too much on U.S.
energy companies and so became one of
the 979 firms to announce their closure
last year.
That’s how the 29-year-old Dodson,
who specializes in financial companies,
and the firm lost out on a $40 million
payday, according to people with
knowledge of the matter. He learned
about his missed windfall from clients
who called him on Dec. 30 as the
Portuguese notes cratered — proving investors in his New York-based firm Pactual’s billionaire founder Andre
he'd bet right. Third Point LLC. Esteves. He was accused of trying to
“My phone had all these missed calls Dodson wasn’t alone in missing out on obstruct a corruption investigation, which
from former colleagues, brokers and the Portuguese bet. Scott Wilson, 49, a he denied, and was later released.
sales guys who knew I’d shorted them,” money manager in London for Grupo In the upheaval, Wilson had to dump
the London-based Dodson said. “The BTG Pactual’s hedge fund unit, was the trade to return investors’ cash.
timing was frustrating, but all you can do forced to unwind the same trade. Still, in some cases, and with a bit of
is smile.” He declined to comment on the Like Dodson, who is now raising luck, there was money to be made.
size and timing of the trade. money for a new fund focusing on Take Daniel Gish of Chicago-based
Missing out on a multi million-dollar win distressed debt, Wilson placed bets that Balyasny Asset Management LP who
only adds insult to injury for traders would pay out if bonds of Portuguese also shorted Novo Banco’s senior bonds.
caught up in the ongoing hedge fund lender Novo Banco SA fell. The senior He kept its position open through Dec.
convulsion. It’s a reminder of how being securities plunged 80 percent on Dec. 30 29, netting the firm a $15 million profit,
right is only half of the challenge for after Portugal’s central bank imposed according to two people familiar with the
those handling other people’s money. losses on bondholders, a move that matter. Gish declined to comment and an
Keeping investors onside for long blindsided some of the world’s largest official for Balyasny didn’t respond to a
enough to profit from trades that money-managers including BlackRock request for comment.
sometimes take months to pay off can be Inc. and Pacific Investment Management Dodson still gets a certain satisfaction
as challenging as being right these days. Co. from being right even if the trade was
Investors put off by disappointing Wilson’s firm could have made about unwound.
returns and high fees at hedge funds $28 million overnight, according to a “No-one was pushing the bear case
pulled their money out in 2015 at a rate person familiar with the matter. But it because they were all long the bonds,”
not seen since 2009, according to Hedge didn't. he said. “I wasn’t quiet about my position
Fund Research Inc. Insiders say it’s just The BTG fund, for which Wilson no because I wanted to make the case no
getting started. longer works, saw its assets drop to one else would, and it was nice to be
“There is no doubt that we are in the about $250 million in February from more vindicated.”
first innings of a washout,” Dan Loeb than $4 billion in November as investors — With assistance from Chris Yerkes

wrote last month in a quarterly letter to pulled money following the arrest of BTG
 
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.
May 27, 2016
BREXIT
Hedge Funds Seek Brexit Trading Advantage Before Voting Closes    
BY ROBERT HUTTON     result is typically tight and to use that data to estimate how each
Hedge funds and banks are seeking to cash in on the outcome
of next month’s referendum on British membership of the
European Union hours before the first results are known.
Staff at two opinion-polling companies, speaking on the
condition of anonymity because discussions are private, report
approaches from financiers looking to glean insights into June
23's so-called Brexit vote and any possible last-minute shift in
public opinion.
The need for information is great because no official exit poll is
being conducted for release once voting ends at 10 p.m., it’s
unclear how soon early results will show a clear trend, and a
final tally isn’t due until the next morning.
Given that the pound is predicted to rise on a vote to stay in
the EU or tumble if Britons back leaving, any hint as to whether
the margin of victory is closer or wider than expected could
provide a trading advantage in the 24-hour foreign-exchange
market.
“It’s widely anticipated that one of the financial houses will be
running something on the day,” John Curtice, the professor of
politics at Strathclyde University in Glasgow who ran last year’s
general-election exit poll for broadcasters, told reporters this
week. Curtice won’t be involved in any such effort; He said he’ll
be asleep during the day on June 23, in preparation for staying
up all night to analyze the referendum results for the BBC.
Unpredicted Victory
Polling companies and the $2.9 trillion hedge-fund industry
could both do with a break. Last year’s election victory by Prime
Minister David Cameron’s Conservatives went largely
unpredicted, while hedge funds are suffering their worst start to
a year in performance and investor withdrawals since the
financial crisis.
While major banks including JPMorgan Chase & Co. are
virtually unanimous in warning against Brexit, hedge-fund
managers are divided. Manny Roman of Man Group Plc and
David Harding of Winton Capital Management endorse
staying, while Crispin Odey of Odey Asset Management and
Paul Marshall of Marshall Wace want out.
Four weeks from referendum day, polls are split over how
close the vote will be. Some show a clear lead for “Remain,”
while others suggest the race is neck-and-neck. For investors
such uncertainty spells a money-making opportunity.
Still, even if cash were no object, there are many difficulties
with producing a proper exit poll. Such surveys typically work by
returning to the same carefully chosen polling stations for each
election, interviewing a sample of voters, and measuring how
vote shared have shifted over the years.
Extrapolating Data
The aim is to predict the results in electoral districts where the
Bloomberg Brief Hedge Funds Europe 4
party will fare nationwide.
Predicting the result of a referendum is more difficult because
every vote matters regardless of where it’s cast. There’s also no
way to measure the change in vote share at individual locations,
because it’s 41 years since the last plebiscite on EU
membership.
That doesn’t mean there’s nothing polling companies could do
for those willing to sign them up. A simple on-the-day poll would
give an indication of the result. Even better would be a callback
poll, in which a group of perhaps 5,000 people are asked for
their opinion a week before they vote and then again on voting
day to detect any change in sentiment.
Callback Quote
Such a survey on the day of the 2014 Scottish referendum
allowed YouGov Plc to declare that turnout was high and that
voters were shifting against independence. One company
quoted 15,000 pounds ($22,000) as the approximate price it
would charge for a callback poll this time around, without saying
how large a sample that would buy.
“This gets rid of some of the problems with polling — you’ve
only got actual voters in your sample,” said polling analyst Matt
Singh of Number Cruncher Politics. “But you still have the
problem that you’re dealing with a regular opinion poll, with all
the problems of whether you have a representative sample.”
One polling company said it hadn’t yet decided what it would
offer, and that potential clients were still debating whether the
referendum result was likely to be close enough for them to profit
from a private poll.
Scottish Experience
Two years ago, as Scotland debated breaking with the U.K.,
pollsters said hedge funds would call them for clues into what
they were finding, especially after one poll showed a lurch
toward a vote for independence two weeks before referendum
day.
The ideal money-maker would be a private poll that correctly
predicted the opposite result from what published reports had
suggested ahead of the vote. To profit from that, investors would
have to be confident that their information was better than the
public data.
There is a question of legality. Section 66A of the 1983
Representation of the People Act makes it illegal to publish
information based on how people have voted while polling
stations are still open. The question is whether passing
information to a client in a financial institution would count as
publishing.
The client would also have to be careful about who they
passed the information to — anyone breaking the law is liable for
a 5,000-pound fine and six months in prison.
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.

May 27, 2016 Bloomberg Brief Hedge Funds Europe 5

RESEARCH BY WILL WAINEWRIGHT

Investors Put Money Into European Funds; Emerging Market Funds Post Gains
 
European Hedge Funds See Another Month of Inflows in April  

Europe's hedge funds attracted a net

$5.5 billion from investors in April while
other regions suffered redemptions,
according to industry tracker eVestment.
Hedge funds based in North America
lost a net $5.4 billion while $1.4 billion
was pulled from the Asia (ex-Oceania)
region overall last month, the Atlanta-
based firm said in an e-mailed statement.
The April numbers extend Europe's
inflows for 2016, with a net $21.4 billion
allocated to the region's hedge funds in
the first four months, while funds in North
America and Asia saw net outflows of
$33.3 billion and $3.8 billion,
respectively, over the same period.

 
EM-Focused Funds Outperformed This Year Through April 30  

Hedge funds focused on emerging

markets, including Latin America, Russia
and Eastern Europe, outperformed other
parts of the industry this year through
April 30, according to Hedge Fund
Research Inc.
Latin American hedge funds led the
gains, averaging a 15 percent return in
the first four months of the year after a 5
percent rise in April, the Chicago-based
data provider said. Its index for Russian
and Eastern European-based hedge
funds rose 5 percent in April and 12
percent in the first four months.
Hedge funds in all emerging markets
rose an average 1.7 percent over the
latter period compared to a 0.4 percent
gain by all hedge funds.

 
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.

May 27, 2016 Bloomberg Brief Hedge Funds Europe 6

ON THE MOVE
Canada Pension’s Allen Said to Depart to Start Fund DIRECTORS
David Allen, a money manager in London at the $212 billion Canada Pension Plan
Investment Board, is leaving to start his own hedge fund, according to a person with
knowledge of the matter. Allen, who is a managing director responsible for credit
Winton’s 11 Hedge Fund
investments, left Canada’s largest pension fund last Friday and will start his own Directors Share $453M
investment firm later this year, said the person. Directors at David Harding’s
The money manager established and managed a credit opportunities fund that has Winton Capital Group hedge fund
invested more than 9 billion Canadian dollars ($6.9 billion) since he joined the firm in shared dividends totaling 311 million
2010, the person said. The fund returned an annualized 15.3 percent over the last six pounds ($453 million) for 2015 after
years, they said. the payout was boosted by 145
Allen declined to comment, while Mei Mavin, a spokeswoman for the pension firm, percent from a year earlier as assets
confirmed his departure. “We thank David for his many contributions to CPPIB and wish under management rose.
him all the very best on his new endeavors, ” she said in an e-mailed statement. The firm’s 11 directors also
Allen was a partner and head of European investments at GoldenTree Asset received a total of 23.1 million
Management in London before joining the pension fund. pounds in pay, with the best
— Nishant Kumar
rewarded receiving 11 million
pounds, according to accounts filed
Capula Said to Hire Ex-BlueCrest Manager Escobar  by the quantitative hedge fund
manager in London. Dividends for
Capula Investment Management LLP has hired Daniel Escobar, a former money one of the directors was paid to a
manager at BlueCrest Capital Management in London, according to a person with family trust, the filing published last
knowledge of the matter. Escobar started at the London-based hedge fund firm on Thursday shows. A spokesman for
Monday, the person said. Escobar and a spokesman for Capula declined to comment. London-based Winton declined to
Escobar was among money managers who left BlueCrest earlier this year after the identify the highest-paid director and
firm’s billionaire founder, Michael Platt, decided to return client money in December. He to comment on the accounts.
joined BlueCrest in 2013 as the firm built up its credit-derivatives unit after previously Harding owns about 54 percent of
working for hedge fund Arrowgrass Capital Partners LLP and Deutsche Bank AG. the hedge fund’s total shares,
Started in 2005, Capula oversees about $13.5 billion of client assets in global fixed- according to a separate filing by the
income hedge funds. firm in October. Assets overseen by
— Nishant Kumar
the firm increased to $33.8 billion
from $28.4 billion a year earlier as
Aylward Said to Leave Highbridge to Start Credit Fund   investor inflows rose and trading
performance was positive, according
John Aylward, a portfolio manager at Highbridge Capital Management LLC in to the accounts. The company’s
London, is leaving the firm at the end of the month to set up his own credit fund, headcount rose to 420 from 339, and
according to a person familiar with the matter. a further increase is planned this
Aylward will start Sona Asset Management in September, said the person. Sona, year, the filing shows.
which takes its name from the Irish word for fortunate, will make long and short The group received a dividend of
investments in European credit, the person said. 125 million pounds from its Winton
Aylward joined Highbridge in 2014 after four years managing money at Claren Road Capital Management unit in March.
Asset Management LLC. He was previously head of high-yield trading at Deutsche Harding founded Winton Capital in
Bank AG. A spokesman for Highbridge declined to comment on Aylward’s departure. 1997.
— Luca Casiraghi, with assistance from Nishant Kumar
He has given at least $5.1 million to
a group campaigning for the U.K. to
Man Group Hires Ex-Barclays Currency Head Wynne remain part of the European Union in
the June 23 referendum on
Man Group Plc, the world’s largest publicly traded hedge fund firm, hired Jose membership of the 28-member bloc.
Wynne as a money manager on the emerging-markets fixed-income team.     — Will Wainewright
Wynne started at Man Group’s GLG unit last month, and focuses on discretionary
macro themes, particularly emerging-market dollar and local-currency debt. A
spokesman at Man Group confirmed the hire. Wynne had been head of foreign-  
exchange research North America at Barclays Plc in New York since 2010. He has a Ph.  
D. in economics from University of California, Los Angeles.
Man Group, which had $78.6 billion in assets as of March 31, has been hiring money
managers to diversify its business, benefitting from a mounting regulatory burden that’s
forcing traders to abandon plans to start their own funds and instead join existing firms.
    — Andrea Wong
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.

May 27, 2016 Bloomberg Brief Hedge Funds Europe 7

THE SHORT OF IT

Odey and BlackRock Stand to Gain as Banco Popular Shares Plummet    

BY WILL WAINEWRIGHT AND MACARENA
Popular Shares Slump
MUNOZ    
Odey Asset Management and
BlackRock Inc. are among money
managers standing to gain from betting
against Banco Popular Espanol SA after
the bank’s shares plummeted as much
as 26 percent on Thursday.
The Spanish lender triggered the selloff
by saying it will raise about 2.5 billion
euros ($2.79 billion) selling new shares
because it needs to write down more
distressed real estate assets and repair
its balance sheet.
Crispin Odey’s London-based hedge Source: Bloomberg
fund has the biggest short against the For a live version of this chart, click on image or run G #HF.BRIEF 11.
bank. Its position covers 20.4 million
shares, or 0.93 percent of stock declined to comment. A spokeswoman Popular will issue 2 billion new shares
outstanding, according to the Spanish for Oceanwood did not immediately at 1.25 euros each, compared with its
regulator. comment while AQR did not immediately closing price yesterday of 2.356 euros,
BlackRock is short 13.2 million shares, answer an e-mail seeking comment, sent the Madrid-based lender said in a filing to
while London-based Oceanwood out of hours. regulators.
Capital Management LLP's bet covers Bets against the Spanish lender Popular pared losses to trade down 20
18.4 million and AQR Capital account for 6.5 percent of its 2.2 billion percent to 1.893 euros at 11.35 a.m. on
Management is short 15.1 million. shares outstanding, according to Markit May 26 in Madrid. The bank is down 38
Spokeswomen for Odey and BlackRock Ltd. data. percent this year.
 

Takata Surge Unwelcome for Short-Sellers Including Lansdowne    

BY SREE VIDYA BHAKTAVATSALAM    
Takata's One-Day Surge Comes After Prolonged Slump
Takata Corp.’s record 21 percent surge
is unwelcome news for short-sellers
including Lansdowne Partners, the
London-based hedge fund wagering on a
decline.
A widening global recall crisis at air-
bag maker Takata has drawn investors
betting on a slump, with short interest on
the shares at 4.6 percent of outstanding
stock as of May 24, according to data
compiled by Markit Ltd. Lansdowne had
a short position equivalent to 2.6 percent
of outstanding shares as of May 6,
according to filings with the Japan
Exchange Group. Lansdowne declined to
Source: Bloomberg
comment.
For a live version of this chart, click on image or run G #HF.BRIEF 13.
Takata shares soared by the daily limit
Thursday in Tokyo trading as the supplier
The air-bag maker’s shares are still passengers. Automakers led by Honda
to the world’s largest carmakers was said
down 43 percent this year as at least 13 Motor Co. had recalled at least 60 million
to be in talks with potential buyers
deaths in the U.S. and Malaysia have air bags globally before U.S. regulators
including KKR & Co. Talks are at a
been linked to defective inflators that can this month ordered the replacement of as
preliminary stage and KKR isn’t the only
deploy too forcefully, rupture and spray many as 40 million more.
candidate, said a person familiar with the
plastic and metal parts at drivers and    — With assistance from Nishant Kumar
matter.
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.
May 27, 2016
SPOTLIGHT
Omni Event Fund CIO Melsom Sees Opportunities in European M&A
John Melsom, chief investment officer of the
$150 million Omni Event Fund, said the fund is
starting to allocate more capital to Europe after
seeing an increase in merger and acquisition
opportunities there. He spoke with Bloomberg
Brief's Melissa Karsh in a telephone interview this
month. His comments have been edited and
condensed.
Q: How has your fund performed?
A: We had a pretty big year for M&A last
year and managed to capitalize on that.
We were up about 16.6 percent last year.
So far this year it's more of the same in
terms of year on year compared to Q1 in
2015. M&A levels seem to be about the
same. We're down from Q4 in 2015. We
didn't have a great April — we were
down about 50 basis points, but we've
already made that back and then some
so far in May. On the year right now
we're right around 6 percent.
Q: What occurred in May to spur the
performance increase?
A: One of our large positions is Baxalta-
Shire, so that’s come in significantly. The
spread widened out over the new rules
from the U.S. Treasury on inversions.
This isn’t an inversion, but people were
nervous of anything that had any kind of
non-U.S. buyer. There's also concern
after the Pfizer-Allergan deal fell apart
that perhaps Shire would become a
target for one of them, but I think that
fear has now disappeared. So that
spread has come in. The Recall Holdings-
Iron Mountain situation has given us
some profit this month. There was an
index reweight in Australia, which
allowed us to take a short position in Iron
Mountain at levels quite a bit higher than
it’s traded for a long time in the U.S. And
those positions are completely fungible.
So those deals are the two main
contributors so far this month.
Spreads had generally widened a little
in April, in part due to the fact that one of
the largest deals, Allergan-Pfizer, got
effectively blocked by the Treasury. This
caused some pain for many merger
arbitrage funds, which in turn can cause
other spreads to widen. With some big
deals closing in May, we started to see
Bloomberg Brief
money being put to work again, which
caused spreads to tighten somewhat.
Q: What sectors do you like?
A: We're fairly sector agnostic. The nice
thing about the hard catalyst style of
investing is we're not trying to predict the
future in terms of where deals are going
to be, so we can react to the environment
as it happens. Inversion or no inversion,
we're still seeing a lot of activity in the
medical sector, in the pharmaceutical
sector and biotech. The problem with
some of the health-care deals is that
politics often gets involved and
sometimes that's harder to price risk. It's
hard to know how much of a haircut to
give that. It also leads to wider spreads,
which provides opportunity for us. The oil
and gas sector will be interesting this
year. There's a lot of stress in the smaller
exploration-type companies so that could
lead to some consolidation there.
Q: Wider spreads, how so?
A: Right now you’ve got a big divergence
in spreads where the very straight
forward deals are trading at not tight, but
much smaller annualized spreads.
Anything with a bit of risk is trading much
wider, but that can provide some
opportunities for us. The other thing
we're seeing is an increase in buyers out
of Asia, in particular China. That comes
with its own set of risks from a regulatory
side, especially when they are buying U.
S. companies and in sensitive sectors.
The main one for the U.S. seems to be
the technology sector, so anything where
they think they are buying intellectual
property, especially any IP that is in
some way used for national security,
which can cause issues from a U.S.
approval standpoint.
Birthplace: U.K.
Based in: Orange County, California
Education: University of Newcastle upon Tyne
Hobbies: Skiing, automotive enthusiast
Favorite vacation spot: Lake Como
Hedge Funds Europe 8
We’ve seen a pick up in outbound
investment from China. But it's across
sectors really.
Q: Are you following regional trends?
A: In Europe, we look at when
companies refinance. Often it’s through
rights issues, so there's a trend right now
where the European steel companies are
all refinancing to shore up their balance
sheets and those rights issues provide
opportunities for us both on an arbitrage
and a directional point of view. In Asia,
it's been more sporadic in terms of the
hard catalyst events. In the last 12
months in Australia, we've been involved
in a lot of REIT-type deals. In the U.S.
the biggest sector has definitely been
health care. But we focus where the
deals are happening as opposed to
looking in certain sectors. After a very
dead period in terms of European M&A
we're seeing a big pick up, so we’re
starting to allocate some more capital to
Europe. You might also see a further pick
up in European M&A once there's some
clarity around the Brexit referendum in
the U.K. 
Q: What's your allocation to Europe?
A: We’re seeing more opportunities so
more capital is flowing into Europe, but
that was from a very low level throughout
2011-2012. Right now, we're probably
about 30 percent in Europe, 10 percent
in Asia and 60 percent in the U.S.
Because we're a very liquid fund and
most of the activity has been in the U.S.,
that's nearly always the largest
proportion. The global aspect for us is
good because when we feel like things
are getting a bit crowded or spreads are
too tight in the U.S. we’ll look to other
geographic regions for opportunities.
This document is being provided for the exclusive use of ROLANDO CAPERINA at SUN LIFE OF CANADA
(PHILIPPINES) IN.

May 27, 2016 Bloomberg Brief Hedge Funds Europe 9

CALENDAR TO SUBMIT AN EVENT E-MAIL MKARSH@BLOOMBERG.NET

The "organizer" and "event" columns link to websites, where available. "Attendees of note" links to the individual's BIO page, where
available, on the Bloomberg terminal.
DATE ORGANIZER EVENT SPEAKERS/ATTENDEES OF NOTE LOCATION
Hotel Vier
Philippe Jordan, Capital Fund Management; Christian Frei, Swiss Capital
June 1-2   Terrapinn   Quant Invest 2016 Jahreszeiten
Alternative Investments; David Jessop, UBS.  
Kempinski, Munich
Opal Financial European Family Office & Institutional Tom Caddick, Santander Asset Management; Jakob von Ganske,
June 1-2   Amsterdam  
Group   Investment Forum Deutsche Oppenheim Family Office; Tim Tate, Citi Private Bank.
Christian Hammes, ETA Family Office; Michael O'Sullivan, Credit Suisse; InterContinental,
June 6-8 ICBI FundForum International 2016
Oliver Bilal, UBS Asset Management. Berlin
Mitsu Adachi, Basel Committee; Gerald Sampson, U.K. Financial Conduct London Victoria
June 13-16 Operational Risk OpRisk Europe 2016
Authority. Park Plaza
Michael Micko, Napier Park Global Capital; Jenna Collins, BlueCrest
June 14-16 Afme/IMN 20th Annual Global ABS Barcelona, Spain
Capital Management; Craig Scordellis, CQS.
Storm-7 Hedge Funds: Regulatory, Risk and Sessions include an overview of key regulatory frameworks in the U.S. and
June 16-17 London
Consulting Compliance EU, business continuity and disaster recovery and third-party administration.
Luke Ellis, Man Group; Peter Coates, Omni Partners; Michael Hart,
Hotel Okura,
June 20-22  ICBI   GAIM 2016 Amundi; Max Rijkenberg, Paamco; Lawrence Berner, Morgan Stanley
Amsterdam  
Alternative Investment Partners.  
Sept. 13 Risk.net Risk Hedge Europe 2016 TBD London
Corporate Governance & Activist Gordon Singer, Elliott Advisors; Lauren Taylor Wolfe, Blue Harbour Group;  Waldorf Hilton,
Sept. 19 The Deal
Investing in Europe 2016 Anne-Sophie d'Andlau, CIAM. London
Family Office 10th Annual Family Office Leadership Heather Maizels, Victoria Private Investment Office; Alexandra Altinger, Marriott Grosvenor
Sept. 20
Intelligence Summit Sandaire Investment Office. Square, London
Pensions and
Lifetime
Oct. 19-21 Annual Conference & Exhibition 2016 Gregg McClymont, Aberdeen Asset Management. Liverpool
Savings
Association
Managed Funds
Nov. 2 Global Summit 2016 TBD London
Association
DISCLAIMER: The information on this page was compiled by Bloomberg from multiple sources, public and private, and is deemed to be accurate, but not definitive or exhaustive.
Questions about events should be addressed to the event organizer.
 

Bloomberg Brief: Hedge Funds Europe

Bloomberg Brief Managing Editor Reporter Marketing & Partnership Director
Jennifer Rossa Will Wainewright Johnna Ayres
jrossa@bloomberg.net wwainewright@bloomberg.net jayres1@bloomberg.net
+1-212-617-1833
Bloomberg News Managing Contributing Reporters
 
Editor Hema Parmar Reprints & Permissions
Elisa Martinuzzi hparmar6@bloomberg.net Lori Husted
emartinuzzi@bloomberg.net lori.husted@theygsgroup.com  Interested in learning more about
Suzy Waite +1-717-505-9701 x2204
the Bloomberg terminal? Request a
Hedge Funds Editor swaite8@bloomberg.net
free demo here.
Melissa Karsh Advertising
mkarsh@bloomberg.net Nishant Kumar Christopher Konowitz
nkumar173@bloomberg.net ckonowitz@bloomberg.net
Contributing Editor +1-212-617-4694
Nathaniel E. Baker
nbaker14@bloomberg.net

This newsletter and its contents may not be forwarded or redistributed without the prior consent of Bloomberg. Please contact our reprints and permissions group
listed above for more information. © 2016 Bloomberg LP. All rights reserved.