The flacks for AQR Capital Management have been working overtime, denying reports of redemptions, losses and a scrapped IPO.
Last week, the Wall Street rumor mill was abuzz with speculation about AQR. There was widespread suspicion that a large market-neutral hedge fund might be unwinding some of its positions, and many fingers pointed at AQR. On Thursday, the New York Post reported that AQR had shelved its plans for an initial public offering after poor performance had left it’s flagship fund down 3% for October and down 6% for the year. Investors were reportedly withdrawing their cash. The Post speculated that the fund could be forced to sell positions to raise cash for the redemptions.
The next day DealBook reported that a spokesman for AQR had told them the Post story wasn’t true. You will be forgiven for thinking that denying the Post story indicates that AQR is moving ahead with an IPO. They aren’t. Because they are not only denying that they shelved the IPO, they are denying that they were ever planning one to begin with. Never mind all those stories dating at least as far back as April—we think we first read about this in the Financial Times—reporting on that AQR was eyeing on IPO. Shove that all down the memory hole. There’s no IPO, there never was one…at least, not since late July...although there might be someday, AQR insists.
More on AQR after the jump.
DealBook explains the double-edged denial.
In his e-mail to DealBook, AQR spokesman Brian Maddox denied that a planned I.P.O. was on the rocks. He pointed out that AQR hasn’t even filed a registration statement with the Securities and Exchange Commission, much less withdrawn one. (He didn’t comment on whether the firm had been planning an I.P.O.)
AQR also note that the stock market is a pretty rough and tumble place these days. “Plainly, marketing turmoil does not favor the IPO of any firm just now, and certainly not in AQR’s industry,” Maddox tells DealBook.
We won’t argue with that last statement but there’s something odd about the IPO denial. For some reason Maddox is talking about whether or not AQR has withdraw a registration statement but no-one—certainly not the Post—ever said anything about the registration statement. His denial is a non-sequitur.
This was actually the second time AQR was said to have delayed or scrapped this totally non-existent IPO. Back on July 31st, the Financial Times reported that AQR had, at the last minute, delayed its plans to file a registration statement with the Securities and Exchange Commission. To be fair to AQR for no particular reason, as best we can tell what they are saying now is that they haven't been seriously considering since then.
Oh, and while we’re at it, we might as well mention that AQR also denies that it has suffered from big trading losses, claiming that it is performing "reasonably well in a volatile market." Last week there was a lot of speculation that AQR had suffered losses and may have been de-levering some of its funds and contributing to the sell-off in stocks.
"In our long-only funds, all funds are up, in the single digits or double," said AQR in a statement. "Among our hedge funds, some are up in the double digits, while are few are down but only in the single digits, though one hedge fund, which represents less than 1 percent of our AUM, is for the moment down in the double digits."
Which still doesn't tell us whether they were selling off positions last week.
AQR Disputes Report That I.P.O. Was ‘Shelved’ [DealBook]
Hedge fund AQR denies big trading setbacks [Reuters]