Alister Hibbert, the star money manager of BlackRock Inc., has turned bearish with sharp declines in stocks leading to his hedge fund facing the worst ever losses in recent times.
The decline of hedge fund
According to a person with information on the matter, the Strategic Equity fund of BlackRock has tumbled by 13% till April this year alone, and this is worse than its highest annual decline of 11%. The fund manager who started the fund in 2011 had a historic surge in his portfolio and became a net seller for the first time in May 2022. His portfolio was giving 35% returns by the end of 2021.
The reversal indicates the shift in the global market as rising inflations have forced central banks to ease the stimulus and raise interest rates. This has resulted in a sell-off in the market in growth stocks such as tech stocks, leading to a further fall in equity-based hedge funds.
Hibbert ran his fund with a bias toward growth stocks and held shares of companies like Mastercard Inc. and Microsoft Corp. He flagged his concern earlier this year with his cautious outlook and told his clients that the economic recovery strongest phase is over. His fund had about $9 billion in assets as of December 31.
As per Bloomberg News, Hibbert wrote a letter to his investors in March stating that the pandemic’s normalization process would not be entirely orderly.
A spokesman from BlackRock declined to comment on the matter.
Shares of BlackRock have declined by 34% this year. In a letter to his investors in March, CEO Larry Fink expressed disappointment with the stock’s performance and cited challenging times in the market for the decline.
Hibbert has a record of being one of the best risk-takers among the world’s best asset managers. He has been the key to BlackRock’s expansion into active management and performance-linked fees. His earnings ran into nine figures and more than thrice the size of Fink’s $30 million payouts in 2020.
The fund was started by Hibbert more than a decade back with $13 million. He turned the fund into one of the largest money pools and generated annualized returns of 17% until 2021. The fund saw only two annual declines since its inception. According to Bloomberg Data, Hibbert also manages BlackRock Global’s unconstrained equity fund, a long-term concentrated fund. The fund was down 20% this year.
