Julie Segal

Biotech doesn’t typically fail in the lab. It fails later — after early promise and before approval — when the cost of proving a drug works comes up against a funding system built for an earlier stage.

The sharp reversal in global equity markets in April posed a familiar challenge for quantitative hedge funds as markets did a flip from crisis mode to a more optimistic view faster than most models are designed to adapt.The PivotalPath Equity Quant Index rose 0.9 percent last month. While that performance was a tiny fraction of the gains for directional equity strategies, the fact that quants finishing the month in positive territory was a good signal of the funds' resilience.

Barings wasn’t just looking for capital — it was looking for a partner that fit its model.Mike Freno, chairman and CEO of Barings, says asset managers now need capital to keep growing — to seed funds, make acquisitions, and compete in a business where fees keep getting squeezed.

When Jonathan Grabel, the CIO of Los Angeles County Employees Retirement Association since 2017, was bringing the management of co-investments in-house, he had part of his team travel to meet with private equity firms, institutional investors, and investment banks to learn about their approaches to internal investment committees, including voting on decisions.

As asset managers consolidated, Liolis believed Guardian faced a choice. It could continue trying to build a traditional in-house investment organization, competing for talent and directly originated deals against much larger firms. Or it could rethink the model, particularly as scale in asset management began to move beyond what a firm this size could realistically replicate.

The sharp reversal in global equity markets in April posed a familiar challenge for quantitative hedge funds as markets did a flip from crisis mode to a more optimistic view faster than most models are designed to adapt.The PivotalPath Equity Quant Index rose 0.9 percent last month. While that performance was a tiny fraction of the gains for directional equity strategies, the fact that quants finished the month in positive territory was a good signal of the funds' resilience.

Hedge funds have had a quite a streak in delivering on their promises to investors in recent years, but they’re not invincible.Few strategies have emerged unscathed after the Iran war and the skyrocketing price of oil sent markets reeling last month. Both the Nasdaq and the Dow Industrials fell into correction territory and all sectors of the S&P 500 fell, except energy. Treasurys also dropped right along with stocks. Traders with bets that interest rates would fall were stymied by the prospect of higher inflation from snarled supply chains and soaring gas prices.

Technology hedge funds just had their strongest month in 26 years.But that return was almost a perfect match with the S&P 500’s performance.

Nick Liolis came to an uncomfortable conclusion after taking over Guardian Life’s investment portfolio. Even with roughly $85 billion in assets, the insurer was losing ground.As asset managers consolidated, Liolis believed Guardian faced a choice. It could continue trying to build a traditional in-house investment organization, competing for talent and directly originated deals against much larger firms. Or it could rethink the model, particularly as scale in asset management began to move beyond what a firm this size could realistically replicate.

In episode 18, I speak with Stuart Fiertz, co-founder and president of Cheyne Capital. Our conversation comes at an important time for private credit as individuals flood retail-oriented funds with redemption requests and as institutions become more cautious about new investments. With the spotlight on private credit, managers are tightening their standards, raising lending rates, and offering fewer goodies to borrowers, such as allowing them to defer interest payments.