New York (HedgeCo.Net) – Halbis Capital Management of HSBC is upping the exposure in their European Alpha hedge fund thanks to cheap stock prices. Bill Maldonado, head of alternative investments, believes it is finally the right time to buy.
"Lots of stocks are trading on increditbly low multiples of 4 to 5 times 2009 earnings," Maldonado said in an interview with Reuters. "They’re pricing in quite a bad recession.”
The $300 million market neutral hedge fund takes both long and short positions. After cutting the gross exposure in recent months, the fund is now buying back into stocks after recent market turmoil made the prices even more attractive.
“We’re rebuilding now because we think the opportunities are definitely there, but we’re being very cautious,” he explained. Even if we see opportunities that are very, very appetizing, they can easily go against you another 10, 20, 30 percent.”
This move comes at a time when hedge funds are trying to recover from one of their worst years ever and when hedge funds across the board are freezing redemptions in hopes of staying afloat. Just last week, Deephaven Capital Management halted withdraws on two of their funds. Other reputable names that have imposed recent restrictions include Drake Capital Management, Citadel and Pardus Capital.
Maldonado explained that while returns on his European Alpha are already admirable at 3 percent, they are likely to improve because there is less hedge fund money competing for profitable trades thanks to reduced leverage and redemptions.
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