In the year 2022 there has been quite a bit of turbulence in the financial markets to say the least. The entire world is going through what seems to be a massive change or reset and all asset classes seem to be at risk of experiencing pain during this destabilization of assets, currency and more.
HEDGE FUNDS CLOSING
Hedge funds and banks have been in the headlines very frequency this past year for various reasons. Hedge funds like Gabe Plotkin’s “Melvin Capital” is officially shutting down. After a rough year in 2021, when the hedge fund lost billions on their meme stock short positions of GME, to 2022 as the stock market is bleeding, the company is not able to recover from the detrimental losses and stay afloat. Plotkin wrote in a letter, “The appropriate next step is to wind down the Funds by fully liquidating the Funds’ assets and accounts and returning all-cash to investors.”
SHORT SELLERS RAID
It wasn’t all that long ago that there were even hedge fund short seller’s allegedly being raided. As of months, back the Department of Justice has been increasingly probing firms affiliated with short selling stocks. This includes firms such as Melvin Capital, Orso Partners, Sophos Capital Management, and Citron Research. In 2021 federal agents reportedly raided the home of Andrew Left, the Founder of Citron Research.
BLACKROCK LOSES $1.7 TRILLION
The most shocking headline of all in our opinion might be this one. “BlackRock, world’s largest asset manager, loses record $1.7 trillion in one year” (Source QRIUS)
BlackRock which is the world’s largest asset manager is not even immune to the destruction taking place this year in the markets.
BlackRock which if you didn’t know yet is the biggest asset manager in the world recorded massive losses as of recent. BlackRock Inc. confirmed a loss of $1.7 trillion in the first half of 2022.
In times like these investors are afraid and large asset managers feel this as many investors are looking to pull money out of funds and or not invest as much as they might if things were to be more “stable”.
According to the Bloomberg report on this, “if fixed-income follows the path of equities, the divergence between passive flows and active flows will only grow.”
‘This is the early days of a major transformation of how people invest in fixed income,’ said Fink last week.
‘We expect the bond ETF industry will nearly triple and reach $5 trillion in AUM (Assets under management) at the end of the decade,’ Fink added. (Source bloomberg)