Balyasny Looks To Build The Amazon Of Hedge Funds, But Can He?

Hedge fund managers have two “unappetizing” choices in today’s market environment, Dmitry Balyasny, Managing Partner and Chief Investment Officer of the $12.1 billion hedge fund that bears his name wrote in the fund’s first quarter letter to investors reviewed by ValueWalk. They can slim down and focus on a niche strategy or, like Amazon.com, bulk up and build a diverse business. Balyasny Asset Management, from one perspective, appears to have chosen components of both strategies. Balyasny looks to Amazon for the hedge fund future, but will institutional investors give hedge funds the same latitude they have afforded Amazon’s Jeff Bezos?

75% of Balyasny alpha comes from the long end of the Long / Short strategy

Balyasny appears to be growing a large and diversified hedge fund that is comprised of many noncorrelated niche strategies with a prudent if potent dose of long stock selection in his formula. On the quarter Atlas Global was higher by 1.56% while Atlas Enhanced delivered 2.51%.

As if to exemplify the fund’s future, the significant first quarter performance driver, generating 75% of alpha through the Atlas Strategy that built the firm. But 20% of returns were driven by new portfolio managers.