Blockchain. Machine learning. Alternative data. Climate change. 

It seems like Arbol Market, a new insure-tech platform, is hitting every buzzword, and the startup's quick growth is proving there's a market for its products. 

Arbol was founded by Sid Jha, a former quant at Ken Griffin's Citadel who brought a machine-learning approach to trading commodities, and his brother Osho Jha, the firm's chief data scientist who has worked at data shops like M Science and asset managers like BlackRock and J. Goldman & Co. The start-up began in 2019, after Sid and Osho left Citadel and J. Goldman & Co., respectively. 

The platform operates in a pretty straightforward way: It connects people and businesses, like farmers and cruise ship operators, most at risk of climate change hurting their bottom lines with investors like hedge funds and reinsurers willing to offer protection. Unlike most insurers here is no back-and-forth between the two parties, and Arbol never handles the money. Arbol is not technically an insurer yet, though it is in the process of becoming one so it can develop more products and expand to more jurisdictions.

See more: Billionaire Ken Griffin's Citadel has a sprawling alumni network of more than 80 hedge funds. Take a look at our exclusive list.

Instead, policies are triggered if certain weather events — say not enough rain falls in a season to grow a certain crop — occur. Arbol uses smart contracts, or self-executing contracts, on blockchain technology, which cut out the middleman and automatically pays out money to the insured once a specified event occurs. 

For Sid Jha, the utility of this platform is obvious, and solves a big problem.

"The way traditional insurance works is someone goes to your business or farm and accesses the damage and determines if your claim is legitimate," he said. "It's lengthy and often leads to disputes."

The firm's products, all based on certain weather events, prevent any back-and-forth, and "we do not control the escrow, the escrow is locked in a smart contract between the two parties."  

The platform is able to cater to smaller claims — they've had premiums as low as $500 — because it's not as resource-intensive, giving smaller farmers a chance to protect their investment. Agricultural insurance is usually given by the acre, and in 2019 premiums for just corn alone amounted to more than $3 billion. 

Research from the American Farm Bureau Federation shows that a majority of staple crops like corn, soybeans, and wheat are insured, but Sid Jha said insurers focus on the big agriculture conglomerates and small farms often go unprotected. 

"When we looked at this landscape, we saw users that could use this product and weren't being served."

Read more:A crypto exchange wants to list futures contracts tied to the outcome of NFL games to help sportsbooks hedge their risks

The explosion of data, particularly alternative datasets on weather, made Arbol possible though. When Sid Jha was trading commodities, he put these datasets to work to determine what the price of corn or soybeans should trade at, using machine-learning techniques to predict future changes. 

Without this granular data – Jha says he is able to see rainfall data down to three-mile tracts — a platform like this would be near impossible to bring to life.

The firm wrapped up its Series A fundraising round at the end of last year to give it $7 million in funding, and hopes to have $1 billion in risk capacity on the platform early this year. At the end of 2020, it had surpassed $15 million in notional risk. 

The next step is getting in front of industries other than agriculture, where it already has tens of thousands of users. Travel companies are the immediate thought for possible expansion, though Jha said all companies that have supply chains impacted by climate chain could be a target, mentioning coffee sellers and energy companies. 

"We can hedge any kind of weather or non weather risk as long as there is a dataset with a long enough history."

SEE ALSO: A crypto exchange wants to list futures contracts tied to the outcome of NFL games to help sportsbooks hedge their risks

SEE ALSO: Opendoor just hired a top quant researcher from $34 billion hedge fund Citadel to oversee home pricing and data as the iBuyer gears up to go public via a SPAC

SEE ALSO: Billionaire Ken Griffin's Citadel has a sprawling alumni network of more than 80 hedge funds. Take a look at our exclusive list.

Join the conversation about this story »

NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America

Every financial institution in the world is constantly searching for new, unique datasets that can give them an edge. A new peer coming in May plans to find them and put them to use at record speed.

Red Cedar, a new Stamford, Conn.-based quant fund set to launch in May, is run by CEO Alexander Chernyy, a Russian-born academic who has worked as a quant at Jefferies, WorldQuant, and DE Shaw, and Christopher Dean, the new fund's president who worked with Chernyy at Jefferies and helped start the bank's proprietary trading desk. It is being backed by hedge-fund-seeder New Holland Capital.

While Red Ceder declined to disclose how much New Holland Capital had invested, sources tell Insider that its investment will let the new fund run a portfolio worth at least $1 billion. However, it is unclear how much leverage is being used in the portfolio.

Chernyy and Dean told Insider they believe their fund can perform in any market condition thanks to their aggressive hedging of common factors that nearly investor uses as well 70 proprietary factors. Chernyy said the portfolio the pair ran at Jefferies avoided a large drawdown in March of last year when many quants were slammed by the impact of the pandemic.

"Much of the drawdown was avoided but the bounce was retained," Dean said. 

Quants struggle to recover from the tough first quarter, with managers like Bridgewater, Renaissance Technologies, and Winton Group losing money for the year. Credit Suisse shut down its more-than-$500-million QT fund, and Coatue returned outside capital in its quant strategy.

Meanwhile, the big winners of last year in the hedge fund space were concentrated, human-run funds, like Dan Sundheim's D1 Capital and Bill Ackman's Pershing Square.

See more: Inside the rapid rise and fall of Coatue's quant fund: How a 23-year-old Wharton wunderkind seized power, alienated employees, and blew a $350 million opportunity

The goal of Red Cedar consistently on the cutting edge thanks to new datasets. 

"We are concentrating on alternative and new datasets with an emphasis on new," Chernyy said.

The manager is working ExodusPoint's former data buyer Chris Petrescu's new company CP Capital to source new datasets that are not already in use by other players in the space. 

The firm plans to research and test 50 datasets by year-end and hopes to use 35 of the datasets producing alpha in their portfolio by 2022's start — with the near-term goal of having both datasets in the portfolio and assets double every year.

When asked about a possible cap for assets, Chernyy said "infinity." 

Chernyy, who came to the States to work DE Shaw, ran WorldQuant's Moscow and St. Petersburg teams of roughly 35 people when he worked Igor Tulchinsky, and his new fund plans to tap into talent in his home country. Red Cedar is planning to open a Moscow office by mid-February with possible expansions to St. Petersburg, Ukraine, and former Soviet Union countries. 

Read more: POWER PLAYERS: Meet the 24 quants driving the future of hedge funds, from well-known billionaire founders to under-the-radar data chiefs

Chernyy said the goal is to have "anything that can be outsourced should be outsourced," including research, though he will lead the research efforts from Stamford, Conn. 

"We want to take advantage" of the cheaper labor and untapped potential in these countries, he said. 

The missions statement, Chernyy and Dean reiterated several times, is to not take the easy trades and focus on building a portfolio that can't be found anywhere else.

"We don't take the easy way," Chernyy said. 

SEE ALSO: A rising star from billionaire Philippe Laffont's Coatue is starting his own hedge fund and has at least $300 million lined up from investors

READ MORE: Here are under-the-radar hedge fund managers who crushed 2020, including a new launch from a former Viking Global portfolio manager and a comeback from a one-time Goldman partner

DON'T MISS: Inside the rapid rise and fall of Coatue's quant fund: How a 23-year-old Wharton wunderkind seized power, alienated employees, and blew a $350 million opportunity

Join the conversation about this story »

NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence

Demand from big-name tech and finance firms looking for pricey, newly built office space in South Florida is igniting a commercial real estate boom.

As major companies, C-suite executives, and startup founders migrate to the Sunshine State at an accelerated pace — thanks to the migration of businesses away from urban centers like New York City set off by the coronavirus pandemic as well as alluring tax incentives — competition to lease prime office space is growing fierce.

Out-of-state companies are close to inking deals for prime office space in Miami and West Palm Beach, lending more support to the claims that Florida is ascending to rival Wall Street.

Insider has learned:

• Seattle-based Microsoft is in advanced negotiations to take up 30,000 square feet at a brand-new office building in the Downtown Miami neighborhood of Brickell called 830 Brickell Plaza.
• Hedge fund giant Citadel has shortlisted 830 Brickell Plaza in its search for an office of up to 80,000 square feet in Miami. Its head office sits in Chicago.
• Law firm Baker McKenzie, also headquartered in Chicago, is also said to be in talks for space at 830 Brickell Plaza.
• Elliott Management is close to inking a roughly 40,000 square foot lease at at 360 Rosemary Avenue in West Palm Beach, a new office building from mega-developer Related.
• Maryland-based mortgage company New Day USA is finalizing a lease for about 50,000 square feet at 360 Rosemary.
• Local private equity firm H.I.G. Capital recently signed on for a little over 20,000 square feet of office space at The Plaza, a mixed-use development in the Miami neighborhood of Coral Gables.

'The overall activity in the market is beyond anything I have ever seen'

Miami has seen only a handful of new office projects in recent years.

The raft of big-name tenants clamoring to take space at 830 Brickell Plaza, a 55-story, under-construction office tower that is scheduled for completion late next year in the Brickell section of Downtown Miami, shows how gleaming new commercial spaces are capturing the interest of newcomers and local tenants alike.

"Right now we have 12 full-floor proposals," said Brian Gale, a vice chairman at Cushman & Wakefield, who leads a Miami team overseeing leasing at 830 Brickell. "The overall activity in the market is beyond anything I have ever seen, and this is my 27th year in commercial real estate."

None of the deals have been signed yet and could fall still through, sources warned.

Gale declined to confirm or comment on any specific transactions that were being negotiated at 830 Brickell. Citadel, Microsoft, and Baker McKenzie all declined to comment.

Major out-of-state tenants are about to sign in West Palm Beach

In West Palm Beach, another prominent office market in South Florida about 80 miles north of Downtown Miami, new office tower 360 Rosemary Avenue is drawing attention from out-of-state firms that are either relocating or setting up outposts in the area.

Maryland-based mortgage company New Day USA is finalizing a lease for about 50,000 square feet at 360 Rosemary, a roughly 300,000-square-foot office building scheduled for completion in the second quarter of 2021. A spokeswoman for New Day USA said the company could not yet comment on the pending deal.

360 Rosemary is also where the $40 billion investment management firm, Elliott Management, is close to inking a roughly 40,000 square foot lease, several people familiar with its negotiations say. Both Elliott and a spokeswoman for 360 Rosemary's developer, Related, didn't respond to a request for comment.

Competition for Miami office space ramps up 

Area companies are adding to the demand for new office space, especially in Miami.

In Coral Gables, an area southwest of Downtown Miami, local private equity firm H.I.G. Capital recently signed on for a little over 20,000 square feet of office space at The Plaza, a mixed-use development that includes two office buildings, one of which was recently completed.

Shay Pope, a senior vice president at CBRE, said that he is representing a financial firm that is also in negotiations to take a roughly 30,000 square foot space at The Plaza. The tenant, Pope said, had previously been looking at 600 Brickell Avenue, a roughly decade-old office building in Downtown Miami, but hadn't been able to complete a deal because direct space at the property was scarce.

Read more: Hedge funds tour Florida office space 'one to three times a day' amid 'torrential' interest from out of state, broker says

That's a key indicator that the Miami market has become increasingly tight as both in-state and out-of-state interest in new office space has picked up in recent months.

"The challenge is finding space like that in Miami right now," Pope said. "It pushed our search to new development."

More deals are pending at The Plaza, according to Tere Blanca, the chairman and CEO of the commercial real estate services firm Blanca Commercial Real Estate, who is handling leasing at the property. 

The Plaza's office component, located at 245 SE 1st Street, consists of two towers totaling roughly 450,000 square feet. The second of the two is scheduled to be completed by the end of the year, Blanca said.

"They're trophy assets for the new-to-market tenants streaming into South Florida," Blanca said. "We certainly are engaged in active negotiations to lease more space."

Commercial real estate developers are betting on migration to the Sunshine State

The transactions are part of a wave of office deals in the South Florida market. Low taxes, year-round warm and sunny weather, and an influx of wealthy corporate and financial industry executives have made it a rare bright spot of activity in an otherwise moribund office leasing market nationally.

"There's around 1 million square feet of new-to-market tenants roaming around for space right now," Gale said. "This week alone we have received over 100,000 square feet of new inquiries."

The activity has caught the notice of developers, who are eager to tap into the demand.

Hines, for instance, is marketing a new 600,000-square-foot office tower in Downtown Miami called Miami WorldCenter in the hopes of securing an anchor tenant and breaking ground on the project.

Related, the developer of 360 Rosemary, has multiple development sites in Downtown Miami it has been shopping to tenants, according to market experts, and in West Palm Beach has announced plans for a roughly 300,000 square foot ground-up office building on the waterfront at One Flagler Drive.

Read more: How Florida is winning over Wall Street firms and tycoons

"For years, the Florida office market was a game of musical chairs, where tenants would move around with small incremental growth, but there wasn't a lot of net new absorption of space," said Alan Kleber, a managing director at JLL in Miami. "Now there's so many new users coming in that you're beginning to see potentially enough demand to drive new construction."

Demand drives Miami office rents up

Recent entrants to the Miami market have shown a preference for top-tier, newly built spaces — and a willingness to pay premium rents to have them.

The nearly $600 billion alternative asset management Blackstone, for instance, recently signed on for 41,000 square feet 2 Miami Central, a Downtown Miami tower finished roughly four years ago.

"This is a new building close to Miami's transportation hub with efficient floors and a lot of light coming in," said Kleber, who represented Blackstone in the transaction. "The quality mattered to Blackstone. This wasn't a stale corporate office tower."

Asking rents at 2 Miami Central range as high as $60 per square foot, sources familiar with the property said, about 50% higher than average office asking rents across the city of Miami, according to data from CBRE.

Asking rates at 830 Brickell — where Microsoft, Citadel, and Baker McKenzie are near deals — are in the upper $70s per square foot, among the highest ever sought by an office project in the city.

Florida notches wins as New York struggles

The vibrancy of the South Florida office market is an outlier nationally at a moment when few other major metropolitan centers are entertaining the prospect of new office development.

In once-booming office markets like Manhattan, for instance, the pandemic has nearly frozen leasing activity and prompted tenants to cast record amounts of office space on the market for sublease. In the fourth quarter of 2020, sublease space made up 24.2 percent of Manhattan's total availability, according to Colliers.

In Miami, by contrast, the sublease availability rate was at modest 2.2% at the end of the third quarter, according to CBRE. Less than 600,000 square feet has been cast on the market since the beginning of the pandemic through the third quarter, CBRE data showed, a fraction of the roughly 20 million square feet in Manhattan that's hit the market.

Remote work and a migration of businesses and residents to secondary cities across the country has clouded the timeline for a recovery in onetime office strongholds like New York City and San Francisco even as the ongoing rollout of vaccines has brought an end in sight to the pandemic.

Read more: How $35 billion hedge fund Citadel rented out a five-star Palm Beach resort to pull off an in-person internship 'bubble'

South Florida, however, has been a beneficiary of the upheaval. The area's climate has made it an alluring escape for those tired of lockdowns and social isolation. The state's absence of an income tax and low corporate tax rate are also a magnet for high earners, such as financial executives, who have begun to relocate from New York City or set up ancillary offices.

Though accelerated by the pandemic, finance titans' predilection for the Sunshine State does predate it. In 2019, investor Carl Icahn, for instance, moved his company's operations from Manhattan to Miami. Citadel's chief executive, Ken Griffin, purchased nearly $200 million of residential property in South Florida that same year.

Join the conversation about this story »

NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence

For the second year in a row, the "Oracle of Boston" failed to make double-digit returns.

Billionaire Seth Klarman, the longtime head of $30 billion Baupost Group, returned just under 5% in 2020, according to sources familiar. Last year, he told investors he made less than 10%. The average hedge fund, according to Hedge Fund Research, made more than 11% last year, and Eurekahedge stated this was the best year for hedge fund performance since 2009. 

The firm had lost money in a hectic March, despite big hedges paying off, Bloomberg reported at the time. For the first time in years, Baupost also opened to new capital in March, and the firm — which often holds billions of assets in its portfolio in cash — raised $1.8 billion in commitments by June, according to Institutional Investor. 

Baupost declined to comment on performance. 

See more: Here are the 8 'long-lasting implications' of the pandemic hedge-fund billionaire Seth Klarman lays out to investors in a new letter

Klarman made waves last year for his midyear letter to investors, criticizing the Federal Reserve's response to the pandemic. 

The billionaire, one of the world's most well-known value investors, wrote that "investors are being infantilized by the relentless" relief efforts from central banks. He said the extraordinary measures caused the stock market to decouple from fundamentals. 

"It's as if the Fed considers them foolish children, unable to rationally set the prices of securities so it must intervene," he wrote to investors. 

The Federal Reserve decided to create emergency lending facilities similar to how the central bank responded to the mortgage crisis in 2008 in order to combat the pandemic. It helped fuel explosive stock growth, particularly growth names like Elon Musk's Tesla, while value managers were left behind again. BlackRock's iShares Value ETF was up a little more than 1% in 2020 while its Growth counterpart made more than 33%. 

While value managers continued their struggles, some investors like Lone Pine Capital believe that value investments can still perform — they will just look like one-time growth companies such as Facebook.  

Read more: Seth Klarman has a rabid following that's stuck with him through thick and thin. Here's why fans of the publicity-shy billionaire investor are so obsessed.

That doesn't mean Baupost isn't looking into new financial products. Late in 2020, regulatory filings showed a new bet from the Boston-based manager: SPACs.

Klarman pumped money into several well-known holdings, including a $400 million investment into fellow hedge-fund-billionaire Bill Ackman's Pershing Square Tontine Holdings. He also made a $52 million bet on former Oakland Athletics' general manager Billy Beane's SPAC. 

SEE ALSO: Seth Klarman has a rabid following that's stuck with him through thick and thin. Here's why fans of the publicity-shy billionaire investor are so obsessed.

SEE ALSO: We got a look at billionaire investor Seth Klarman's super-rare book that sells for thousands. Here are the predictions he nailed, and where he missed.

Join the conversation about this story »

NOW WATCH: Here's what it's like to travel during the coronavirus outbreak

When it comes to consumer banking, the offerings and services involved run the gamut from the most basic of checking accounts to highly-personalized home loans and specialty vehicle auto loans. Accessing them all in one place via a seamless, online user experience, however, isn't always easy.

That's one of the new focuses of digital-lending startup Blend.

On Wednesday, San Francisco-based Blend announced a new fundraising round that brought the company's valuation to $3.3 billion, a near doubling of its valuation since it last raised money five months ago in August.

See more:Machine-learning powered mortgage startup Blend overshot its expectations with a $130 million fundraise. Their CFO explains how they pulled it off.

Blend works with traditional lenders — such as Wells Fargo, US Bank, and Navy Federal Credit Union — to streamline their process of offering and managing mortgages and loans via digital channels. 

The $300 million Series G round was led by Coatue Management and Tiger Global, whose past experience investing in software companies like Hinge Health and Rapyd appealed to Blend's founder and CEO, Nima Ghamsari.

Previous investors include Canapi, who joined the company's Series F round in August. 

"We are a software company and so I wanted to get people who understood software. This was just the right round. It was a right time for somebody like that in the late enough stage," Ghamsari told Insider. 

"We're excited because they're both very long-term oriented investors," he added.

A common system

Ghamsari said that a key part of Blend's growth since the startup was founded in 2012 has been the increasing success of digital strategies at fintechs and challenger banks, placing pressure on traditional banks and lending companies to upgrade their online experience.

The COVID-19 pandemic, meanwhile, has only accelerated the "digital transformation banks and lenders are undergoing," he said.

Read more:Blend, a startup that's building a 'one tap' mortgage-application tool, is now jumping into the auto-loan market

Ghamsari said that the new capital will go primarily towards deepening existing customer relationships and further building out Blend's suite of new consumer-banking tools used by banks like BMO Harris. 

"These banks are built product line by product, even fintechs are built product line by product line. We're going to build this common platform that can underlie all those products."

Blend said it added more than 200 employees in 2020, a 60% increase, and facilitated $1.4 trillion in mortgages through its online tools.

Mortgage roots

Even as Blend looks to develop what it calls its new end-to-end service for digital banking, it's also remained true to its lending roots by continuing to innovate the online mortgage process.

Blend's lending technology, specifically, is currently used by Wells Fargo – one of Blend's first partnerships in the mortgage space – and US Bank, among others.

"We've gone really, really deep in the home buying and home-financing process," Ghamsari said, including developing a new offering that tries to improve on the "closing table" stage of taking out a mortgage — when the borrower must sign page after page of paperwork and meet with their lender, an escrow agent, a real estate agent, and lawyers.  

Ghamsari also added that he believes Blends benefits from operating in the relatively confined industry of consumer banking and lending.

"One of the benefits of being in a vertical is that you have a small number of customers. We have a small number of customers that we can spend a lot of time on, and I want to spend more time on them, not less, as we become more successful," Ghamsari said.

Read more:Smaller banks have been forced to evolve in the wake of the pandemic. Insiders explain how fintechs are playing a key role in the future plans of regional and community banks.

SEE ALSO: Julian Robertson's Tiger Management is at the center of a quarter-trillion-dollar web linking billionaires, the Pharma Bro, and a 'Big Short' main character

SEE ALSO: Inside the rapid rise and fall of Coatue's quant fund: How a 23-year-old Wharton wunderkind seized power, alienated employees, and blew a $350 million opportunity

SEE ALSO: Smaller banks have been forced to evolve in the wake of the pandemic. Insiders explain how fintechs are playing a key role in the future plans of regional and community banks.

Join the conversation about this story »

NOW WATCH: We took a 1964 Louisiana literacy test and failed spectacularly

7Park Data, a darling of the alternative-data boom feeding quantitative hedge funds, is shuttering as a standalone business just two years after being acquired for $100 million by private-equity juggernaut Vista Equity Partners.

Sources told Insider that Bellevue, Washington-based Apptio, another Vista portfolio company, will absorb 100% of 7Park's business. 

A spokesperson for 7Park confirmed the deal, citing the strength of its tech. An Apptio spokesperson said in a statement that the company is "poised to enhance our robust IT Benchmarking solution as well as provide additional machine learning-driven data cleansing and auto classification capabilities" with the purchase. 

A spokesperson for Vista declined to comment. The terms of the deal were not disclosed. 

New York-based 7Park has seen challenges in recent months including client defections, losing access to key data streams, and a precipitous drop in revenues, according to sources familiar with the matter who spoke under the condition of anonymity to preserve relationships. Details regarding how 7Park, and its offerings, will be integrated into Apptio were not immediately clear.

Annual revenue has fallen by more than 50% since Vista purchased the company, according to sources familiar with the company. 

See more:PE shop Vista Equity Partners paid $100 million for 7Park to get in on the alt-data craze. Insiders describe the management turnover, amped up sales pressure, and change in strategy that followed.

The alt-data company's plummeting fortunes mark a rare miss for Vista. In recent months, the private-equity firm, which has $73 billion in assets under management, has also been rocked by billionaire co-founder Robert Smith's admission to years-long tax evasion and the exit of Brian Sheth, Vista's No. 2.

7Park, founded in 2012, rose to prominence amid Wall Street's embrace and shift toward novel data streams, such as retail foot traffic, credit-card statements, email receipts, and website and app traffic. 

The company made most of its money selling this data to many of the world's top hedge funds, which cleaned it up and packaged the intel into algorithms to inform potential investments. The firm in 2017 produced roughly $15 million in revenue and had more than 140 clients, including Balyasny, Citadel, Coatue, Tiger Global, and SoftBank, according to a pitch deck presentation viewed by Insider.

7Park had ambitions of growing that revenue stream to more than $200 million, according to the presentation. 

In 2018, a breakout year for alternative-data providers, Vista bought the company for $100 million, adding a data up-and-comer to its portfolio of technology investments.  

See more: The alt-data industry is having growing pains after its sudden glow up — and insiders are looking at new pricing models and unlikely customers

But 7Park has encountered an array of obstacles since, including a slew of staff exits and leadership changes in 2019, Insider previously reported.

More importantly, the company had lost access to data streams throughout 2020.

Jumpshot, a data stream collected and sold by cybersecurity firm Avast before being shut down in January 2020 following concerns over data privacy, was one such example. Jumpshot's data was a part of 10-15% of 7Park's offerings at the time, a source familiar with the situation had told Business Insider. While some 7Park's products that included Jumpshot data were salvageable, other were not, the source added.

7Park had previously faced issues around data streams going dark, a somewhat common peril of operating in the world of alternative data.

In 2015, two of 7Park's critical data vendors were acquired nearly simultaneously, the source familiar with the situation had previously told Business Insider. One of the acquiring companies wasn't interested in working with 7Park, while the other was a competitor. As a result, the company was forced to quickly switch to new offerings essentially overnight in order to salvage the business, the source said. 

One former employee, who spoke under the condition of anonymity in order to speak freely, said the company was left scrambling in early 2019 when Google changed its policy to limit email receipt data. 

The company's feed on email receipts, at the time, was one of its most accurate and a best seller, the source said. 

To be sure, 7Park's view of the market, and its place in it, changed following the Vista acquisition, the source familiar with the situation had previously told Insider. A key consideration of the company following the deal was the value it could provide Vista's other portfolio companies when it came to their own internal data, whether that be selling it or for other purposes, the source said.

But its eight-year run as a standalone firm has come to an end, and it will now be folded into Apptio, a software provider that Vista purchased for nearly $2 billion in 2018. 

SEE ALSO: 7 alt-data leaders at big-name investors like Point72, Bridgewater, and Man Group explain the best way to pitch them on new feeds

SEE ALSO: Vista Equity Partners CEO Robert Smith is looking to move beyond his $140 million tax-evasion settlement. An escalating political scandal involving a one-time protégé could complicate things.

SEE ALSO: Vista Equity Partners lost a $100 million pension-fund investment after Robert Smith's tax-evasion investigation came to light

Join the conversation about this story »

NOW WATCH: Epidemiologists debunk 13 coronavirus myths

In a reflection of the overall industry's 2020, the humans at $6 billion Schonfeld Strategic Advisors outperformed the machines.

Schonfeld's $2.3 billion Fundamental Equity fund, which includes dozens of stock-trading teams but no quant strategies, made 14.% in 2020 thanks to a 4.4% return in December, according to a fact sheet the firm sent to investors seen by Insider. The only month the fund lost money was in March, when it fell by 4.3%. 

This performance beats Schonfeld's flagship fund, the Strategic Partners fund, which runs nearly $4 billion. That fund returned 9.8% in 2020, according to a recent Bloomberg report, and made 4.8% in December. 

The firm declined to comment on performance. 

See more: Here are under-the-radar hedge fund managers who crushed 2020, including a new launch from a former Viking Global portfolio manager and a comeback from a one-time Goldman partner

The Strategic Partners fund includes the firm many quant strategies as well as fundamental stock-pickers. The firm was not immune to some of the troubles that quant funds ran into last March, when it fell by more than 10% thanks to the volatility from the pandemic. Major quants like Bridgewater, Renaissance Technologies, and Winton Group never recovered from the tough first quarter, and lost money on the year. 

Human-run stock-picking strategies had a banner year though. Managers like D1 Capital, Coatue, Tiger Global, and more put up massive returns, fueled by gains in growth stocks and private market companies. 

Schonfeld's Fundamental Equity fund, which the firm was fundraising for last year, beat the average hedge fund, which made 11.6% on the year, according to Hedge Fund Research.

Between its flagship fund and the fundamental-only strategy, Schonfeld raised $1 billion, according to a Bloomberg piece from last summer. 

Insider obtained a copy of the fundraising pitchdeck the firm was using for the Fundamental Equity fund last year, and the 24-page pitch ran through fees, team composition, and strategy goals. The fact sheet sent to investors recently does show a small difference from the pitchdeck — the sector with biggest chunk of the portfolio now is financials at 18% followed by information technology, which used to be the largest sector exposure.  

SEE ALSO: Schonfeld is raising money for its $2.2 billion fundamental equity fund. Here are the highlights of its 24-page pitch to investors laying out fees, performance, and personnel.

SEE ALSO: Billionaire Seth Klarman's Baupost returned less than 5% in 2020, failing to break double-digits returns in what's been called the best year for hedge funds since 2009

Join the conversation about this story »

NOW WATCH: A cardiologist revealed the truth behind red wine's health benefits

Nancy Davis once won an award as a "rising star" in the hedge fund world. Now her star is rising in the exchange-traded-fund world, which is rapidly eclipsing that of hedge funds.

Davis' Quadratic Interest Rate Volatility and Inflation Hedge ETF, or IVOL, recently surpassed $1 billion in assets. It's been less than two years since Davis converted her firm, Quadratic Capital Management, from a hedge fund to an ETF.

IVOL is designed to protect against volatility in interest rates and hedge against inflation, and it's benefited from a couple of major trends at once. One is investors' growing appetite for ETFs, which offer lower fees and easier trading access than older strategies. Thanks in part to their lower cost to investors, many ETFs have delivered better returns.

That combination has pushed some hedge funds to close up shop in recent years, but Davis wasn't going to do that — she only founded Quadratic in 2013 after ten years of stints at Highbridge Capital and AllianceBernstein. Earlier, she had worked at Goldman Sachs for nearly a decade.

Another factor that's helped IVOL is inflation-phobia. A lot of investors and experts are afraid of higher interest rates and inflation in much the same way people are afraid of snakes or flying. And even though rates have been very low for a long time, that fear has delivered more buyers for the ETF.

The Federal Reserve has repeatedly vowed to keep its benchmark interest rate at zero for a long time. But if anything, investors are getting more worried about inflation brought on by a post-pandemic recovery along with enormous economic stimulus efforts that could increase prices.

Finally, the fund boasts strong returns. Morningstar says Davis' IVOL has returned 19.5% to investors since its inception in May 2019, and it's beaten more than 90% of inflation-protected bond funds over that stretch.

That backs up her belief that interest-rate markets are "the smartest markets" and that her fund will help investors profit from their intelligence.

"They typically move before the credit markets, and definitely before the equity markets," she told Business Insider in May 2020.

The ETF lets investors profit when the yield curve steepens, something that usually means inflation expectations are rising. It also protects them against the potential for volatility in interest rates. Few investors expect that kind of volatility today because of the Fed's low rates and stimulus efforts, but Davis argues that that means it's a very cheap option.

"The asymmetry of owning inflation expectations is quite high because everyone expects deflation," Davis said. "It's very cheaply priced relative to other asset classes."

Read more:

• Renowned strategist Tom Lee says to buy these 29 stocks that were ravaged by the pandemic but now poised to boom as the world reopens — and they're all top-rated by 3 different investing strategies

• Legendary investor Bill Miller compared marijuana legalization to the early days of gambling and shares the one pot stock he's betting on to soar

SEE ALSO: A former journalist who worked his way up to become one of Wall Street's best tiny-company stock pickers tells us the 4 pillars of the approach that's beating 98% of his competitors

SEE ALSO: The world's largest wealth manager dismisses a major fear about taxes under a unified government — and pinpoints the sustainable investment you should make with more stimulus on the way

Join the conversation about this story »

7Park Data is shutting off its data streams to investors, its CEO informed clients on Friday, a day after Insider reported the firm would be absorbed by a fellow Vista Equity Partners portfolio company.

The company, which provided an array of novel data sets to prominent hedge funds, said that following its acquisition by software provider Apptio it would shift its focus to "accelerating our acquirer's core product roadmap" and would wind down or divest products that didn't fit with that mission, according to a memo to clients from CEO Brian Lichtenberger that was viewed by Insider.

"Effective today, 7Park Data will discontinue products we deliver to clients in the investment vertical," Lichtenberger wrote. "I recognize that this may be disruptive information for you, your workflow, and your organization."

A spokeswoman for 7Park Data did not immediately respond to a request for comment. 

The foundering firm was once a mainstay in Wall Street's alternative-data world, providing intelligence on cloud-services spending, email receipts, transactions from business and consumer vehicle insurance purchases, and cancer treatments given to patients by specialty clinics.

7Park at one point had more than 140 clients, including marquee hedge funds like Balyasny, Citadel, Coatue, and Tiger Global.

Read more: Vista Equity Partners is folding alt-data shop 7Park into another one of its portfolio companies just 2 years after buying it for $100 million

But since being purchased by Vista for $100 million in 2018, the company has hit roadblocks. In recent months it has struggled with client defections, losing access to key data streams, and a steep decline in revenues, Insider previously reported.

The company confirmed this week its sale to Apptio — which Vista also bought in 2018 — primarily for its technology. But it didn't immediately reveal what would become of the data streams investors were using to feed algorithms and inform stock picks. 

But on Friday, Lichtenberger wrote that its products were going dark right away, a hasty wind-down that caught some off guard, according to industry sources.

"I am thankful for the support from you, our deeply valued clients and apologize again for the disruption this news may cause for your business," he said in the memo. 

SEE ALSO: Vista Equity Partners is folding alt-data shop 7Park into another one of its portfolio companies just 2 years after buying it for $100 million

SEE ALSO: Vista Equity Partners lost a $100 million pension-fund investment after Robert Smith's tax-evasion investigation came to light

SEE ALSO: PE shop Vista Equity Partners paid $100 million for 7Park to get in on the alt-data craze. Insiders describe the management turnover, amped up sales pressure, and change in strategy that followed.

Join the conversation about this story »

NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America

Consolidation and invasion by heavy hitters are the dominant themes for the alternative-data space as the new year begins. 

Data giant Bloomberg ended the year with an acquisition of Second Measure, an alternative data company that analyzes credit card data, roughly a month after S&P Global unveiled plans to buy IHS Markit in a monster deal worth $44 billion. 

While Bloomberg did not publicly announce what the company paid for Second Measure, two sources tell Insider that the deal was worth more than $100 million, and Bloomberg paid close to a double-digit multiple on revenue. Bloomberg declined to comment on the price. 

Meanwhile, Blackstone is looking to not just use data but sell it: The world's largest alternative investment manager said in an SEC filing in December that it is looking into selling data generated by its portfolio companies. 

Data usage by investors and even corporations is expected to continue to surge — more than half of hedge funds surveyed by SS&C and the Alternative Investment Management Association last year said they were using alternative data, though 75% of them had only just begun in the last five years.

Conferences run by alt-data providers like Battlefin are expanding corporate tracks to help companies understand how to use alternative data to better understand their customers — and keep an eye on their competitors. 

But even with all the high-profile interest, it can be a tough business for unproven names to crack into. 

See more:Vista Equity Partners is folding alt-data shop 7Park into another one of its portfolio companies just 2 years after buying it for $100 million

"There's going to be consolidation," said Justin Zhen, cofounder of the web-scraping data company Thinknum. 

"Over the last few years, we had too many vendors. I think there'll be a lot less noise this year."

Already, the year has seen one major player exit the space. 7Park Data, which Vista Equity Partners paid $100 million for in 2018, is being folded into another Vista portfolio company, Apptio. 

That consolidation could look like a push by more traditional data heavyweights into the space that was once full of smaller players with specific expertise in niche offerings. 

"The business models are getting proven out. I think you'll continue to see M&A. That wouldn't surprise me. Even if it's a distressed situation or a strong situation, for that matter," said Austin Burkett, head of quant and feeds, investing and advisory at Refinitiv, a financial data and technology infrastructure company jointly owned by Blackstone and Thomson Reuters.

2020 proved to be a volatile year for alt data 

After a rough end to 2019 that saw some alt-data companies forced to restructure or reconsider their offerings, 2020 started with plenty of uncertainty.

However, the pandemic provided a great opportunity for the industry to step up, offering real-time insight to investors that wasn't accessible via traditional data, such as web traffic to retailers and how that compared to the loss of in-store visitors. 

At the same time, the way these unique datasets are being accessed has evolved. Snowflake, which in 2020 had the biggest-ever software IPO, rolled out a data exchange that serves as the go-between for consumers and data providers. Data giant FactSet and hedge fund Coatue were among the exchange's early adopters.

Meanwhile, long-established go-betweens in the alt data space that previously served as gatekeepers for the niche data providers struggled towards the end of the year. These kinds of data venues, like Nasdaq-owned Quandl, vet data sources and connect buyers and sellers, but as hedge funds build out their own sophisticated data science teams, the most popular datasets on these platforms become less valuable.

Historically, it's been a useful service of filtering out the noise of hundreds of data companies often pitching information that was interesting but not necessarily useful. Smaller, but well-known, players in the space have experienced some shakeups over the last few months as bigger players are moving in. 

See more: Hedge funds' secret sauce is obscure data like satellite images. Here's how the people in charge of spending millions on this data find the stuff worth buying.

Emmett Kilduff, who founded Eagle Alpha eight years ago, is stepping down as CEO to become the executive chairman of the board and "pursue other interests," according to a statement on LinkedIn.  

London-based data platform Neudata is down two New York-based employees that were hired to boost the company's presence in the US in 2020. Suen Ng and Micheal Gillman both left in the fall, leaving in-house counsel Donald D'Amico as the only US-based staff member.

"We're currently covering US account management and [business development] from the UK and have hired four more [account management and business development] staff in London since the fall," said Sondra Campanelli, Neudata's head of communications, in an email to Business Insider. 

She explained that the company is hoping to expand the US team this year, and currently "have 29 people on staff and are hiring for six open positions at the moment, so expect our headcount to be up to 35" in the first quarter. 

Traditional players are eyeing alt data more seriously 

At the same time, companies that have long dominated the world of data are giving more attention to their alternative offshoots. 

Some have had the pieces in place for years. FactSet, for example, launched Open:FactSet, a marketplace for alt data, in April 2018. Bloomberg, on the other hand, started its own alt data marketplace in early 2019.

Both firms took additional steps in the second half of 2020 to broaden their offerings. 

FactSet announced plans to acquire Truvalue Labs, a leader in AI-driven ESG data, in October. The deal, of which the terms were not disclosed, closed later that year.

Truvalue had already partnered with FactSet via its marketplace since 2018, allowing the data provider a chance to see what type of response it would get from customers. 

"Open:FactSet has actually been a wonderful, almost incubator, for us to test out different data ideas in a very low-risk, low-cost way by forming these partnerships," Lauren Stevens, senior vice president of Open:FactSet strategy, told Insider. 

"It's very kind of low friction to onboard these partners and then really we can get a lot of great valuable feedback from our clients," she added.

Bloomberg's more-than-$100-million purchase of Second Measure was a big bet: The alt-data company, which uses Yodlee data, was valued at $80 million roughly two years ago when it last fundraised. Sources tell Insider that Second Measure, which is not yet profitable, had multiple suitors in the M&A market, affecting the price Bloomberg ended up paying. 

"We see rich possibilities for innovations that simplify the process of extracting actionable insights from those data sets and putting them into practical application, and we believe this acquisition will help us accelerate these solutions," said Shawn Edwards, chief technology officer at Bloomberg, in a statement.

To be sure, not all data providers are looking to make acquisitions in the alt-data space just yet. Refinitiv, for one, has partnered with alt-data marketplace BattleFin, providing its own data to the venue since 2019.

The sheer breadth of the industry, and its relative infancy, makes working with a more established player in the space a better option, Refinitiv's Burkett said. BattleFin, started by Tim Harrington in 2012, has gone from hosting conferences connecting data buyers and sellers to running a platform called Ensemble and offering software-as-a-service tools to clients. 

"It's very difficult to kind of pick and choose winners in the space," Burkett said. "Partnering is typically the lightweight option, from a data vendor perspective, and makes sense in early days."

Companies are realizing the power of their data as well

And while the importance of data isn't lost on any company these days, more firms are considering just how valuable that information is and, in some cases, what third parties would pay for it.

Some, like CBRE, the world's largest real estate services firm, has talked about how they're focusing more on leveraging the internal data they have. 

"We operate at a massive scale, we manage 7 billion square feet of real estate and we process over $400 billion in transaction volume," CBRE's chief digital and technical officer Sandeep Davé said in an interview with Insider this summer. 

"So we have access to unparalleled data, and we want to continue to mine that data."

Others, like Blackstone, are taking more formal steps to actually create products off the back of information their company already collects.

That strategy provides opportunities for data providers, who have experience cleaning, selling, and managing data sets. 

FactSet is supplementing its aforementioned Truvalue Labs acquisition with a big-time partnership. One of its newest Open:FactSet partners is Credit Suisse, which is offering a data set to help investors benchmark corporate profitability. 

And while it's easy to think of an alt-data company as just "three guys sitting in San Francisco creating something," Stevens said, there are plenty of opportunities to find data sets at established firms.

It's a trend Stevens expects to see more of 2021. 

"They're realizing they're sitting on some pretty cool, unique, valuable data assets. What they need is a big firm, a redistributor like FactSet, to help them get buy-side clients to sign up," she said.

"If you are Credit Suisse and you have a really fantastic, strong data-science team that's pumping out interesting signals and factors, keep them focused on that. Use someone like a FactSet to sign up, and deal with all the legal agreements, and the invoicing and support, and if a feed breaks on a Sunday morning." 

SEE ALSO: 7 alt-data leaders at big-name investors like Point72, Bridgewater, and Man Group explain the best way to pitch them on new feeds

SEE ALSO: Hedge funds are overhauling the way they use alt data to find winning stocks as the crisis forces even quants to think big-picture like macro investors

SEE ALSO: PE shop Vista Equity Partners paid $100 million for 7Park to get in on the alt-data craze. Insiders describe the management turnover, amped up sales pressure, and change in strategy that followed.

Join the conversation about this story »

NOW WATCH: We tested a machine that brews beer at the push of a button

• Hedge funds enjoyed strong gains in 2020 as risk markets swiftly rebounded on recovery hopes and unprecedented stimulus.
• The average fund returned 12.3% in 2020, the largest annual return since 2009, according to analytics firm HFM.
• The hedge-fund industry's assets under management ballooned 7.7% to a record $3.5 trillion.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Hedge funds closed out 2020 with their best average return in more than a decade as unprecedented fiscal stimulus and Federal Reserve support lifted fueled markets' rapid-fire rebound.

The average fund returned 12.3% throughout last year, marking the largest average annual return since 2009, according to a report by fund analytics firm HFM. The average equity fund outperformed the S&P 500, though the overall average return lagged the index by 4 percentage points.

HFM's index of equity funds returned an average 19.4% in 2020, handily beating out its event-driven, managed-futures and macro indexes. European funds lagged with a 9.8% gain on average, while North American and Asia-Pacific funds rose 14.6% and 11.5%, respectively.

Read more:GOLDMAN SACHS: Buy these 25 stocks best-positioned to juice profits in 2021 as stimulus and vaccine progress spur economic growth

Strong fund gains mirror the bullish trends seen around the world. The coronavirus's initial hit dragged risk assets lower in spring 2020 before trillions of dollars in stimulus and widespread central-bank easing restored healthy market functioning. Hopes for a swift economic reopening quickly drove stocks back to pre-pandemic highs by August. More recently, steps toward widespread vaccination and the likelihood of additional stimulus boosted prices to fresh records.

The broad rallies pushed swaths of investor capital into the hedge fund industry. Assets under management swelled 7.7% to a record $3.5 trillion. Bullish investor sentiment fueled inflows of roughly $32 billion in November alone. HFM estimates that hedge funds could manage more than $4 trillion as early as the first quarter of 2021.

Credit and fixed-income funds were the only ones to see net inflows in 2020, likely buttressed by the Fed's backstopping of the corporate credit market.

While existing funds thrived, fund openings almost completely froze. Just 274 new funds launched last year compared to the 373 openings seen in 2019. Only 90 funds opened in the second half of 2020, and fewer funds opened in the fourth quarter than in any quarter on record.

The inability to easily hold face-to-face meetings and the typical holiday-season halt likely contributed to the slowdown, according to HFM.

Now read more markets coverage from Markets Insider and Business Insider:

Goldman Sachs reveals the 8 'green energy majors' that are set to shoot up in value in a sector worth trillions of dollars as the renewables race heats up

AMC soars 37% after issuing $100 million in debt to stave off bankruptcy

Shares 'look cheap': Here's what 4 Wall Street banks expect from Netflix's 4th-quarter earnings report

Join the conversation about this story »

NOW WATCH: This incredible animation shows how deep the ocean really is

New York hedge-fund executive Dan Loeb has picked up a Miami Beach mansion for $20 million, Katherine Kallergis reported for The Real Deal. 

Loeb, the founder and CEO of New York-based hedge fund Third Point, is worth about $3 billion, according to Forbes.

His new waterfront home has seven bedrooms and nearly 14,000 square feet of living space, according to the listing. It features a home theater, a rooftop deck, a private boat dock, and separate guest quarters. Loeb bought the house from developer Peter Fine, per the Real Deal.

The waterfront home sits on North Bay Road, a coveted residential area that millionaires and celebrities. Luxury real-estate agent Nelson Gonzalez, who calls it "the Park Avenue of Miami Beach," told Insider in 2019 that he's sold homes on the road to the likes of Cher and Billy Joel. Last summer, Karlie Kloss and Joshua Kushner paid $23.5 million for a home on North Bay Road. At the end of December, supermodel Cindy Crawford and husband Rande Gerber paid $10 million for a teardown.

Jills Zeder Group, who brokered the deal, declined to comment or share any photos of the property.

A spokesperson for Loeb's company, Third Point, also declined to comment.

Everyone is moving to Florida

South Florida has seen a flurry of real-estate activity during the pandemic, as politicians, celebrities, executives, and financial firms move to the Sunshine State.

Former President Trump and his wife Melania are reportedly moving to his Mar-a-Lago Club now that his term has ended. In December, Ivanka Trump and Jared Kushner bought a $32 million lot on Indian Creek, the private island known as Miami's "Billionaire Bunker." That same week, it was reported that Kushner's brother, Joshua Kushner, had bought a home in Miami Beach with wife Karlie Kloss earlier in the year. In January, Tom Brady and Gisele Bündchen joined Trump and Kushner as homeowners on Indian Creek, paying $17 million for a home they plan on demolishing.

Loeb's reported purchase, which is about a 15-minute drive from Indian Creek, is the latest sign of an apparent finance migration from New York to Florida. 

As Insider recently reported, recent moves by finance industry giants indicate that a big chunk of Wall Street could be moving to Florida.

Manhattan-based hedge fund Elliott Management plans to move its headquarters from Manhattan to West Palm Beach, Bloomberg and the Financial Times reported in October. And last month it was reported that Goldman Sachs was considering shifting its asset management operations to Florida. Blackstone, the world's largest private equity firm, also plans to open an office near Miami. 

In December, an unnamed private equity executive from New York dropped $33 million on a Miami Beach penthouse, and a former Goldman Sachs executive paid $11 million for a Miami Beach home.

SEE ALSO: Is Florida the new Wall Street?

DON'T MISS: What it's like in Miami's famed financial district

Join the conversation about this story »

NOW WATCH: Why electric planes haven't taken off yet

Ray Dalio lost $12.1 billion for investors in his firm Bridgewater Associates in 2020, a year when the world's top 20 hedge funds reaped their best returns in a decade thanks to the rapid rebound in stocks in the spring.

Nonetheless, Dalio is still the best-performing hedge fund manager of all time, with net gains of $46.5 billion since inception, according to the latest rankings from LCH Investments, which is part of the Edmond de Rothschild group.

The top 20 managers of all time made $63.5 billion for investors in 2020, LCH said, the best returns for the group in 10 years. That was half of the $127 billion the industry as a whole made for investors, which was down from $178 billion in 2019.

"In 2020 the best hedge fund managers generated substantial returns while limiting downside risk, which is exactly what they are meant to do," LCH's chairman, Rick Sopher, said in a statement. "2020 was the year of the hedge fund."

Read more: Michael Saylor has invested over $1 billion of MicroStrategy's funds in Bitcoin. He explains why he is making such a massive bet on the digital asset.

The most successful hedge funds profited massively from the sharp rebound in equities. Stock markets recovered rapidly from March's crash, as central banks such as the US Federal Reserve took unprecedented measures to prop up economies.

The S&P 500 has risen about 70% since its low at the end of March, powered by technology "growth" stocks such as Amazon, Netflix, Apple and Google.

Despite the best gains in a decade for the top 20, hedge funds on average returned 11.6% in 2020, according to Hedge Fund Research data cited by Reuters. That was less than the 16% return of the S&P 500.

Dalio's Bridgewater suffered hefty losses after failing to position adequately during the downturn and the subsequent rebound.

"We have never had a significant downturn, all positive years, but we knew that there would come a day," Dalio told Bloomberg TV in September. "We missed the pandemic going down, and that is the reality."

Yet Bridgewater still has the most assets under management of any hedge fund with available data, LCH's annual report said, at $101.9 billion.

Renaissance Technologies also suffered a bad year, causing it to drop out of LCH's annual list of the top 20 hedge fund managers of all time.

"Conditions favored man over machine, and it was notable that Renaissance Technologies, a machine-driven manager, has dropped out of the top 20," Sopher said.

Read more: Cathie Wood's ARK Invest runs 5 active ETFs that more than doubled in 2020. She and her analysts share their 2021 outlooks on the economy, Bitcoin, and Tesla.

Chase Coleman's hedge fund, Tiger Global, entered LCH's all-time top 20 with gains of $10.4 billion. That was more than any of the other top 20 funds made last year.

Israel Englander's Millennium made $10.2 billion in 2020. Steve Mandel's Lone Pine was not far behind at $9.1 billion, while Andreas Halvorsen's Viking fund brought in $7 billion for investors.

Sopher said Tiger Global's gains were "generated substantially from its net long biased equity strategy."

Tiger Global, Viking, and Lone Pine are all spinouts of the Tiger Management family of funds founded by Julian Robertson.

Join the conversation about this story »

NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America

How do you follow a 74% performance in 2020? For Dinakar Singh, founder of $400 million Axon Capital, it has been returning 7% so far in the first month of 2021. 

"This is a good time to focus on fundamentals," he said in an interview with Insider. The markets have been overwhelmed by momentum factors, pushing quant and retail investor favorites through the roof, making true alpha hard to find.

"You have to think about not just what will make you money, but what will make you money differently," he said.

"A good idea goes nuts" because of momentum chasers, he said, forcing investors like himself to find great ideas. 

Singh, a former Goldman Sachs partner who relaunched his hedge fund two years ago, walked Insider through where he sees opportunities in 2021 and beyond, highlighting companies, sectors, and themes he is high on or avoiding altogether.  

Last year was Singh's comeback moment, as he dwarfed the returns of the average manager, which finished the year up just under 12%, according to Hedge Fund Research. He originally founded his fund in 2005 and grew it to more than $13 billion before his performance slumped and investors withdrew. Two years ago, he relaunched, with 17% returns in 2019. 

See more:Here are under-the-radar hedge fund managers who crushed 2020, including a new launch from a former Viking Global portfolio manager and a comeback from a one-time Goldman partner

For Singh, 2021 ideas include "value-growth" companies like Facebook and Google, American Express and other travel-linked stocks, and financial companies, while avoiding cyclical stocks like copper and railroad and durable goods companies like Best Buy. He foresees a "reversion" of what happened in the market last year, where parts of the economy soared while others fell into a recession.

"It is simply unprecedented and extraordinary — goods (and particularly durable goods) SURGED at a historic rate, even as spending on everything else (services) plunged at a historic rate. Goods spending rose 8% even as services spending fell 7% — durable goods rose even more — 14%! That type of skew is simply incredible," he wrote to investors at the end of November. 

Put differently, he does not expect people to be buying computer monitors and home goods at nearly the rate they were in 2020, while he does expect spending on things like travel, concerts, and dining out to surge when the vaccine reaches most parts of country. 

"I can't think of a good reason why leisure travel would be depressed. The next Christmas, it's going to be impossible to get a flight and a warm resort somewhere," he said. Madison Square Garden is set to have the "most densely packed concert schedule in history" in the second half of this year. 

Because of this, he is high on American Express — "I could see a world where for a number of years their earnings are higher than ever before"— while continuing to bet on "value-growth" tech companies like Facebook and Google. 

Facebook as a value investment would have sounded absurd five years ago, but investors like Singh and Lone Pine Capital's Mala Gaonkar have been arguing that the social media giant should be considered as such. Singh sees constant, but not explosive, growth at a good price without the risk of some of the big pandemic tech bets, like Zoom. 

See more: Billionaire Seth Klarman's Baupost returned less than 5% in 2020, failing to break double-digits returns in what's been called the best year for hedge funds since 2009

"If you can buy companies with growing earnings at a not-too-bad price, you're going to do ok."

This is all working toward a more defensive stance over the next six months, he said. "This party is getting into the later hours," he said about the market's surging performance, and you don't want to be the one to clean up after the party is over.

"It wouldn't shock me if you saw a recession in durable goods stocks," he said, but the typical response to a recession won't make sense — an advantage he believes he and other human-run funds have over quants that might be rolling out their playbook from 2008. 

Typically, cyclical stocks that are in-demand during a recession include utility companies with constant earnings, but Singh is avoiding these bets because the recovery over the next year will be so uneven compared to the past — and top investors will avoid the temptation to follow the crowd.

"Smart investors are going to need to leave some money on the table over the next 12 months," he said. 

SEE ALSO: Here are under-the-radar hedge fund managers who crushed 2020, including a new launch from a former Viking Global portfolio manager and a comeback from a one-time Goldman partner

DON'T MISS: How humans outperformed the machines in 2020 at $6 billion Schonfeld Strategic Advisors

Join the conversation about this story »

NOW WATCH: We tested a machine that brews beer at the push of a button

Retail investors — especially from the infamous subreddit WallStreetBets — helped force one of the top-performing hedge funds of the last half-decade to secure billions in emergency funding from two ultra-competitive peers. 

Now, funds are planning to keep as close of an eye as possible on the social media platform, angling to not just avoid getting burned but also to extract insights and capitalize on other shifts in stocks in the Reddit crowd's crosshairs. 

One data scientist at a fund told Insider they created a scraping tool this weekend to monitor tickers being discussed on the site to make sure their fund's short book isn't caught in the next YOLO trade. Thinknum, the web-scraping data provider, is in the process of building a Reddit-specific dataset after "insane client demand," according to cofounder Justin Zhen. The new tool will track ticker mentions in certain subreddits including WallStreetBets.

The rapidly growing subreddit, now with over 2.4 million members, maintains a dashboard of data insights, and other users have created tools of their own to make sense of the metadata from Reddit's stock-investing community. 

Eagle Alpha, which connects hedge-fund clients to alternative-data providers, meanwhile has noticed an increase in demand for data on retail investors this month, with a specific focus on Reddit. Interest in this data originally started in the fourth quarter of last year, in part because Robinhood cut off the trading data that many funds were using, but Hugh O'Connor, the firm's global director of data sourcing and partnerships, said "there's been a surge in interest in requests that have come in the last month." 

See more: Bloomberg just paid more than $100 million for an upstart alt-data player. Here's why that marks a huge turning point for a once-fringe business.

The talk of Wall Street this week has been the meteoric rise of shares in GameStop, the video-game retailer that had been struggling thanks to the pandemic and a shift to buying games directly on consoles, and a big stumble by Melvin Capital, led by one-time golden boy Gabe Plotkin.

Plotkin's fund had big bets against GameStop, which became a favorite of the WallStreetBets crowd thanks in part to Chewy.com founder Ryan Cohen's addition to the company board. Melvin's puts against GameStop were revealed in regulatory filings, putting his fund and select others like short-seller Citron Research in the crosshairs of the subreddit. GameStop has soared, and Cohen personally has seen his 12.9% stake in the company swell to more than $1.3 billion as of Tuesday's trading close. 

Melvin is down at least 30% this year, according to the Wall Street Journal, thanks in part to GameStop but also a slew of other losing short bets, including National Beverage and Bed Bath & Beyond.

Plotkin, whose fund made more than 50% last year and managed $12.5 billion heading into the year, received $2.75 billion on Monday for a non-voting revenue stake in his manager from Citadel founder Ken Griffin and Plotkin's former boss Steve Cohen. 

The swift reversal of fortunes for Melvin at the hands of a horde of contrarian day traders has captivated the investment community, which is now looking to profit from a new stream of alternative data: which stocks Redditors are coalescing around and plowing their growing pile of capital toward. 

The WallStreetBets ranks have ballooned this year, especially as its wager on GameStop has produced eye-popping returns — the stock is up over 750% in 2021 — and upended pedigreed finance professionals. The subreddit has added more than half a million members in January, growing from 1.8 million to 2.4 million as of Tuesday. 

It has added more than 25,000 users in the past 24 hours, according to the metadata dashboard ran by the subreddit, which shows insights on the most-discussed companies, comments and posts, and top users posting about individual companies. 

Another live feed dashboard created months ago by Reddit user Eric Schwelgin, whose handle on the website is weare808, monitors stock ticker mentions across the website and filters them by shifts in popularity and includes a drop-down menu for each stock showing the latest Reddit comments about the company.

Schwelgin, a developer based outside of Cleveland, Ohio, told Insider he first built the tool, called "Dayminer," back in October as a quarantine side project, receiving positive initial reviews and feedback from the Reddit community. He refreshed the app about a month ago and added requested features, the most demanded being toggles to filter out the noise coming from WallStreetBets.

"It takes a lot of comments and a lot of upvotes to hit the top spots," said Schwelgin, whose scoring formula accounts for the number of comments, the age of the comments, and how many upvotes or downvotes the comments receive. 

Before the GameStop saga took off in mid-January, he was seeing a hundred visitors a day; now on some days he's seeing spikes of nearly 2,000 users. Dayminer has even caught the attention of some hedge fund professionals eager to keep tabs on community's trading sentiment, industry sources told Insider. 

See more: Albourne Village — a quirky online hedge fund community — is getting ready for a revamp. We took a look at the 20-year history of a site that lists billionaire founding fathers like Izzy Englander.

Alternative data — a booming industry thanks to hedge funds desperate for an edge — has become the lifeblood of many managers, and changes to data streams and feeds can throw models and algorithms off. This month, Vista-owned 7Park Data shut down its feeds to clients abruptly after it was folded into another Vista portfolio company. 

Steve Cohen's fund, Point72, was sent scrambling last year, as reported by Insider, when day-trading app Robinhood limited access to data on the most popular stocks on their platform. Data on the mood of WallStreetBets users, many of whom trade on Robinhood, may be the next best thing. 

SEE ALSO: Steve Cohen's Point72 and other hedge funds are sending urgent requests to find a replacement after Robinhood data on hot stock trades suddenly went dark

SEE ALSO: 7Park Data is killing off the data streams it sells to hedge funds after being sold to another Vista Equity Partners portfolio company

SEE ALSO: Inside the rapid rise and fall of Coatue's quant fund: How a 23-year-old Wharton wunderkind seized power, alienated employees, and blew a $350 million opportunity

Join the conversation about this story »

NOW WATCH: Here's what it's like to travel during the coronavirus outbreak

In early 2019, GameStop's stock value fell off a cliff: It dropped from about $16 per share to under $4.

And it stayed in that range for just shy of two years.

Even in 2020, while the video-game business (including GameStop) had huge gains during coronavirus lockdowns, GameStop's stock price remained in the gutter. As recently as August — just under five months ago — the largest video-game retail chain had a stock value of less than $5 per share. 

But in the second half of 2020, with big financial names like Michael Burry and Ryan Cohen buying up shares in the ailing retailer, things started looking up. The company's share value gradually increased until it outright surpassed its pre-collapse value in late 2020. 

And that's when it got really weird: Between January 20 and January 26, GameStop's stock value leaped from just over $35 per share to north of $140 per share. By January 27, it hit new highs of over $325 per share — an over 8,000% increase from just a few months ago.

But why?

The answer has little to do with GameStop, nothing to do with video games, and a lot to do with a Reddit forum dedicated to playing the stock market.

Read more:One GameStop shareholder got $2.7 billion richer in one week, and the rally isn't over yet

The forum, named Wall Street Bets, has over 2 million members, and it's the collective action of those members that appears to be driving up the value of GameStop's stock. Simply put: As more people buy the stock, its price increases. And there's no signs of that collective action stopping anytime soon.

"GME has bounced and is once again at $225," one thread in the Reddit forum said on Wednesday morning. "Hold strong boys ... we will take GME to $1,000."

Another thread urged users not to sell and to remove their $1,000 price limit, which would automatically trigger sales.

"GME will stay going until WE sell. Do not f---ing sell boys, $1,000 was the original target but nothing is stopping this from getting to $5,000 but us," it said. "It sounds like a meme but it isn't. Hold on tight and make father Musk proud!"

More than anything else, the prevailing theme in Wall Street Bets is collective power — enough collective power to push back on the hedge funds and analysts that predicted GameStop's stock would never reach such heights.

"FOR ALL THE BIG F---ING HEDGE FUNDS MONITORING US, THIS IS A MESSAGE FROM US TO YOU, WE F---ING OWN YOU NOW, F---. YOU. GO BUY THE F---ING NEWS. LIKE AND COMMENT SO THEY SEE THIS POST. F--- YOU MELVIN CAPITAL. F--- YOU CITRON RESEARCH. YOU HAVEN'T CLOSED S---. THIS IS GONNA GO DOWN IN HISTORY,"one such post said.

But that doesn't mean the value will hold in the long run or that GameStop is worth its stock value to its shareholders. 

The explosion in GameStop's stock value is "just a cult phenomenon," Michael Pachter, Wedbush Securities' managing director, told Insider. "They don't currently have the earnings power to support a price this high," he added.

Read more:How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped tank Melvin Capital's short positions

That's because, like Blockbuster and Tower Records before it, GameStop faces major challenges to its business model from the internet. As more people buy video games through digital storefronts, fewer buy games on physical discs. And GameStop is in the business of selling physical discs.

Despite a shake-up to the company's C-suite and the addition of Cohen to the company's board, GameStop hasn't revealed a long-term plan to stave off oblivion.

"The market appears to believe Ryan Cohen has a strategy that will take earnings up by a lot," Pachter said. "I can't give him credit for his genius until I see what the strategy is."

Got a tip? Contact Business Insider senior correspondent Ben Gilbert via email (bgilbert@businessinsider.com) or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a nonwork device to reach out. PR pitches by email only, please.

SEE ALSO: How Reddit day-traders are using the platform to upend the stock market and make money in the process

Join the conversation about this story »

NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid

• Chris Sacca celebrated day traders, but warned them against using borrowing money in a Thursday tweet.
• The billionaire investor and former "Shark Tank" star ended up $4 million in debt that way.
• "From someone who has been there ... don't trade what you can't afford to lose," he said.
• Visit Business Insider's homepage for more stories.

  ---

Billionaire investor Chris Sacca is cheering on the army of day traders boosting stocks such as GameStop and squeezing short-sellers, but fears they'll get burnt if they're relying on debt.

"It's fun to read about home traders making bank," the former "Shark Tank" star and Lowercase Capital founder tweeted on Thursday.

"20 yrs ago, I was one of you," he continued. "Today I'm here to tell you: *Don't trade with money you don't own.*"

Read more: Value investor Adam Mead shares 7 key insights into Warren Buffett's Berkshire Hathaway after writing its complete financial history

"I know because I did that," Sacca said in a follow-up tweet. "I kited my student loans, YOLO'd them to $12m, and then, in an f'ing blink, I woke up $4m in debt."

Sacca, who made a fortune in the early 2000s then lost a big chunk of it when the dot-com bubble burst, pointed out that hedge funds are risking their clients' funds, not their own.

"The hedgies you're torching? They are losing other people's money," he said. "You're making them sad AF, but they're not going to be picking up extra shifts and taking on a second job. They will never get calls from debt collectors."

Read More: 'We're very surprised we didn't underperform in the 4th quarter': Cathie Wood and her analysts break down their stock-selection process and the top 10 picks that contributed to the outperformance of ARK ETFs in Q4 2020

The early investor in Uber, Twitter, and Instagram voiced his support for the current buying frenzy, which has been attributed to the Reddit forum Wall Street Bets. He indicated he owns at least one of the stocks that has spiked as a result.

"Keep doing what you're doing. You've shattered so many deserving egos, and I've been lucky to wet my beak along the way," Sacca tweeted.

However, Sacca — who turned his focus from investing to battling climate change, voter suppression, and an unfair justice system in 2017 — underscored the dangers of trading with borrowed money.

Read More: A Wall Street firm tweaked the Shiller PE ratio to create a superior gauge of the strongest stock-market returns — and broke down why the beloved metric won't cut it anymore

"I just shudder thinking that what happened to me back then is going to happen to a lot of you," he said.

"I have axes to grind against a lot of the guys you're wrecking, and I love to hear about real people stacking chips," Sacca added. "But, please, from someone who has been there ... don't trade what you can't afford to lose."

Join the conversation about this story »

NOW WATCH: A cardiologist revealed the truth behind red wine's health benefits

Another of Wall Street's most revered and successful hedge fund managers has been stung this month, as an array of popular short bets have been pummeled by a mob of traders connected to Reddit's Wall Street Bets forum. 

D1 Capital, the hedge fund run by billionaire investing phenom Dan Sundheim, has been bitten by a pricing surge in cinema chain AMC Entertainment, which the company had a short position in, according to people familiar with the matter.

Shares in the theater operator have risen nearly 900% this month, and that wrong-sided bet has contributed to a roughly 20% loss for D1 in aggregate, including its private-market capital, according to a source familiar with the matter. Its public-market bets were down closer to 30% by Wednesday, other sources told Insider. 

Bloomberg first reported that the firm had suffered losses. A spokesman for D1 declined to comment to Insider. 

See more: How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped tank Melvin Capital's short positions

D1, which manages $20 billion in capital, has been one of Wall Street's hottest funds since its 2018 launch, and it came into the year riding a high, producing 60% returns in 2020 amid the pandemic. Sundheim, the former chief investment officer of Viking Global Investors, deftly navigated the chaos last year, reducing short exposure and wagering heavily on several companies that benefited from the outbreak such as Chinese e-commerce company JD.com and car e-retailer Carvana.

The firm's 10 largest long positions accounted for 77% of its net assets as of September, according to an investor letter seen by Insider, but Sundheim wrote to investors that the firm was starting to spread out exposure in its portfolio more equally across different names, as three months prior the firm's largest ten positions made up 87% of the firm's public equities' portfolio value.

"Our absolute number of positions has increased to 141 names. This compares to our average position count of 107 names from the start of the year to June 1st, 2020," the letter reads. 

The fund came into 2020 positioned with significantly more exposure in its short book, sources told Insider. 

Short-selling has proven a minefield so far this year, with floundering stocks not only failing to fall, but rising precipitously amid feverish bidding by retail traders.

While GameStop has stolen the show this month, rising to previously unfathomable stock prices and derailing esteemed funds like Melvin Capital and Maplelane Capital, other dreary stocks popular on WallStreetBets have been jolted with life as well, including Bed Bath & Beyond, Blackberry, Nokia, and AMC. 

The beleaguered movie theater chain, which was struggling prior to the Covid-19 crisis, has been forced to fend off bankruptcy several times over the past year as its theaters sat wholly or partially shuttered. Most recently, on Monday it raised $917 million to continue funding operations. 

That helped nudge its stock — which was trading at under $7 a share before the pandemic this time last year — from under $3.51 a share to $4.42 on Monday. But then it gained steam among Reddit traders — it has been one of the most discussed stocks according to dashboards that track stock mentions and sentiment on the website — driving shares to $19.90 as of Wednesday's close.

AMC shares gave up some of those big gains on Thursday morning, and platforms like Robinhood and TD Ameritrade have restricted access to the stock. 

Sundheim is known to be close to Gabriel Plotkin, the founder of Melvin Capital, with whom he shares partial ownership of the NBA's Charlotte Hornets; the pair appeared on a panel together at the 2019 Ira Sohn conference. It wasn't immediately clear whether D1 had any short exposure to GameStop, which has whacked Plotkin's firm to the tune of more than 30% this year as the video game retailer's stock has risen nearly 2,000%. 

Read more: The rise of Dan Sundheim: How a Wharton whiz kid became the LeBron James of investing, launched one of the hottest hedge funds on earth, and minted a billion-dollar fortune in the process

SEE ALSO: The rise of Dan Sundheim: How a Wharton whiz kid became the LeBron James of investing, launched one of the hottest hedge funds on earth, and minted a billion-dollar fortune in the process

SEE ALSO: How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped tank Melvin Capital's short positions

SEE ALSO: Wall Street is betting AMC is in a downward spiral. Here's the inside story of how the world's biggest movie-theater chain is battling for a comeback.

Join the conversation about this story »

NOW WATCH: What would happen if you jumped off the International Space Station

With last week's news that Goldman Sachs was considering moving part of its business to Florida, the whispers about Florida's ascendance as a financial capital have turned into hollers.

Driven by lower taxes, the pandemic's remote work ease, or quality of life, tristate-area financial services firms are increasingly looking to Florida as a prime location for at least an outpost — or, at most, a total relocation. 

Top office brokers are seeing this migration firsthand. Stephen Rutchik, Colliers' executive managing director of office services for the South Florida region, told Business Insider that interest from out of state firms is "torrential."

"We're touring hedge funds on our agency side one to three times a day," Rutchik said. "They're not just from New York anymore, and they're not just the pre-pandemic 2,000 to 5,000-square-foot satellite offices, they're 5,000 to 100,000 square feet."

Before the pandemic, Rutchik said that a lot of local office demand from financial services firms was either because a firm wanted an office for its Latin American business line or because a partner had moved down to Florida, and so the company set up a satellite office to support their work.  

READ MORE: Is Florida the new Wall Street?

The data bears this out. In August of 2019, the Business Development Board (BDB) of Palm Beach County reported that 70 hedge funds, private-equity firms, and wealth-management businesses from New York City opened offices in Palm Beach County during the prior three years.

"It started about eight years ago, when CEOs were buying homes along the ocean as taxes increased in New York, specifically, and Greenwich," said Kelly Smallridge, who helms the BDB as its president and CEO.

That trend began to morph with last year's news that Carl Icahn was relocating the whole Icahn Group to Miami, but the major uptick came months into the pandemic.

"Then comes COVID-19," Smallridge said. "It was very quiet in March, April, May, and June." 

Rutchik said demand suddenly increased "overnight." It first kicked off with "undisclosed" clients who are searching without revealing their names, but it soon developed into a "critical mass of inquiries,"

"That level of activity has been unabated, and just incredible, giving our clients the understanding that this is Miami's time," Rutchik said.

Most of the demand came from New York, but he noted that companies from California and the Chicago area were also office-hunting. Smallridge has seen the same boom on her side.

"It's been the biggest uptick in inquiries that we've seen," she said. 

SEE ALSO:I moved my family from NYC to Miami this year, and it was the best thing I could've done

Rutchik said that the biggest interest has been in subleases and pre-built offices, or "ready to go space," in the 50,000 to 70,000 square foot range. This is a signal that companies are looking to make change rapidly, without the months-long delay of constructing and furnishing office space.

"They want to make the move now for tax purposes, and do it before the end of the year," Rutchik said.

New York City is facing its first major snowstorm of the winter. Inclement weather, Rutchik added, is another factor driving his clients' haste to find new space. Chilly New York temperatures dampen the allure of outdoor dining and, as Mayor Bill de Blasio has warned, more lockdown-style restrictions are likely to follow, including the prohibition of indoor dining as of December 14.

The interest in putting down residential and commercial roots is occurring even as widespread vaccinations hover on the horizon, offering a glimmer of hope for normalcy in New York.

New Floridians make it official

Companies aren't just looking — they're signing leases and preparing to physically move employees in before the end of the year to shave dollars off their tax bills. Last year, Florida dropped its corporate tax rate from 5.5% to 4.458% for 2019, 2020, and 2021 returns. In New York, that rate is 6.5%. And in Connecticut, where many hedge funds are based, it's 7.5%. Despite Florida's lower rate, a 2019 investigation by the Orlando Sentinel found that about 99% of all businesses in the state pay no corporate income tax at all. 

Top Palm Beach broker Dana Koch, of Corcoran, said he was seeing an influx of people who work in private equity and hedge-fund management seeking permanent residency in South Florida.

"They can enjoy their lives 365 days a year," said Koch, ranked by Real Trends as the top-selling agent in Palm Beach and the 32nd in the US with $149 million worth of sales in 2019. 

A lot of these prospective buyers have entertained the idea of moving to South Florida for a few years, Koch told Business Insider, but the pandemic accelerated their timelines. House hunters Koch meets like that Florida and New York share the same time zone, making coordination of remote work or even school schedules easier.

Joining the southern trend are Jared Kushner and Ivanka Trump, who reportedly spent $30 million on an empty lot in Indian Creek Village, an exclusive private island in Miami. Also this week, former NFL quarterback Tom Brady and his supermodel wife Gisele Bündchen paid $17 million for a house in the same tiny enclave.

READ MORE: Inside Miami's exclusive 'Billionaire Bunker,' where Jared Kushner, Ivanka Trump, Tom Brady, and Gisele Bündchen are moving

And with big-name firms signaling their intention to move to Florida, Rutchik said he believes another wave will follow. As the region evolves into a more accepted — and expected — home base for finance, he added, a "herd mentality" will kick in.

If you build fancy offices, they will come

Of course, there are limits to leasing growth. For one, there's only about 67.4 million square feet of Class A office space in the area, compared to 337.6 million square feet in Manhattan alone, according to Colliers research. And that Manhattan figure doesn't include the neighboring finance hotbeds in affluent NYC suburbs, such as Fairfield County, Connecticut, which contains cities and towns like Stamford, Greenwich, and Westport that are popular among firms and funds.

However, according to Smallridge, new office development in South Florida has boomed over the last decade.

"Eight years ago, we had an issue where there weren't many 'Class A' office buildings with water views to accommodate the requests," she said.

One standout result of the construction spree is 360 Rosemary in West Palm Beach, a 20-story, 300,000-square-foot office tower that is being developed by Related Cos, which is also behind the Hudson Yards complex in New York City.

Private-equity firm Comvest Partners (also in Chicago), investment firm Norwest Equity Partners (also in Minneapolis), and a coworking space operated by IWG's Spaces brand (headquartered in Switzerland) are already lined up as tenants for the project, which is slated for a grand opening in 2021.

"The influx may be coming even faster than we expect," Gopal Rajegowda, a senior vice president at Related who is overseeing the project, wrote in an October op-ed in the Palm Beach Post. "West Palm needs to be ready."

360 Rosemary promises a futuristic "hands-free" environment, with motion sensors and facial recognition technology for a touchless entry, for example, and bathroom faucets that operate with sensors.

Another example of an NYC-worthy office space is the DiVosta Towers, an 11-story luxury office complex in Palm Beach Gardens that was completed in 2019 and boasts high-profile tenants including JPMorgan. South Florida office space is looking like a good investment: In September, the Palm Beach Post reported, DiVosta towers sold for $80 million to Gatsby Enterprises, a real-estate firm based in — where else — New York.

Join the conversation about this story »

NOW WATCH: Sarah McBride made history becoming the first openly trans person elected to a state Senate seat. In 2018, she explained why the Trump administration wouldn't discourage her work.

Two more senior leaders are leaving Fannie Mae, marking the latest shift in leadership at the mortgage giant whose future now lies with an administration unlikely to immediately prioritize a possible path out of government control.

The status of the company and its counterpart Freddie Mac, which together are cornerstones of US housing and guarantee roughly half of the $11 trillion US mortgage market, has been something of a political football for more than decade, since the government took them over after nearing collapse during the 2007-2009 global financial crisis.

Head of corporate strategy and vice president Fernando Correa Arango has left the firm and Desmond Smith, senior vice president and chief customer officer for the large single-family business line, is set to exit, according to people familiar with the plans.

They are the latest in a wave of senior leaders who are set to leave or have left Washington, DC-headquartered Fannie Mae in recent months. Arango, Smith, and representatives for Fannie Mae did not return requests for comment.

Arango was with the organization since June 2019, and was previously with Navigant Consulting, according to LinkedIn. Smith has been with Fannie Mae since 2016, and previously held roles at Capital One, Citi, and JPMorgan, according to LinkedIn. 

Smith has been overseeing a newly reorganized group of teams within Fannie Mae's single-family business line, which is its largest segment that sits alongside multi-family.

Customer strategic insights, community lending and engagement, customer care and solutions, and single-family business solutions have been reporting into Smith, Insider reported in October. 

Read more: Mortgage giant Fannie Mae is shaking up leadership in its largest business, with 2 top execs leaving

At least six senior leaders, including Smith and Arango, have now left or plan to leave Fannie Mae.

Andrew Bon Salle, who was with the firm for nearly three decades and rose to head the single-family housing business as one of the most senior leaders at Fannie Mae, left at the end of 2020, Insider previously reported. Jeffrey Walker, who was chief strategy officer of that business, left in October.

Henry Cason, the former head of digital products for single-family housing, left at the end of 2020 and Renee Schultz, who was the division's head of capital markets, is set to leave in the second quarter. Both were with the firm for more than two decades, according to a spokesperson who in November confirmed those exits. 

Read more: Mortgage giant Fannie Mae, which has been trying to plot a way out of government conservatorship, just saw another round of top leader exits

The exits come at a crucial moment for Fannie Mae, officially called the Federal National Mortgage Association, and its counterpart Freddie Mac, or the Federal Home Loan Mortgage Corporation.

Former President Donald Trump's administration had sought to find a viable way to take the two organizations out of government control. Trump had appointed Mark Calabria, the former chief economist for Vice President Mike Pence, to run Fannie and Freddie's regulator, the Federal Housing Finance Agency (FHFA). His term is set to end in 2024. 

But they remain in conservatorship, a state of play that bodes poorly for the big investors who have billions of dollars riding on their return to private hands. 

"Initially, we think the Biden administration will put this on hold," said Bose George, an analyst with Keefe, Bruyette & Woods, referring to the fate of Fannie and Freddie as the new team decides its priorities. 

The Wall Street Journal reported in mid-January, citing advisors close to then-President-elect Biden, that he would be in "no hurry" to privatize the two government sponsored-enterprises. Biden will instead likely focus on using the GSEs to boost housing affordability and homeownership, the WSJ reported. 

Shareholders also await a decision from the US Supreme Court around the FHFA's structure, which could in turn decide Calabria's control of the agency he leads. In early December, justices considered a financial crisis-era case where Fannie and Freddie shareholders argued that the single director of the FHFA can wield too much power.

Read more:Fannie Mae is asking key employees to be prepared to work through the holidays as the mortgage giant plots a potential 11th-hour release from government control

In December, Insider reported that Fannie Mae had alerted some strategy-focused employees to prepare for work over the winter holidays as the company appeared to try and plan an exit from government control.

That overall plan appeared unlikely, as former Treasury Secretary Steve Mnuchin suggested in an interview with the Wall Street Journal in December. 

SEE ALSO: Mortgage giant Fannie Mae, which has been trying to plot a way out of government conservatorship, just saw another round of top leader exits

SEE ALSO: Mortgage giant Fannie Mae is shaking up leadership in its largest business, with 2 top execs leaving

Join the conversation about this story »

NOW WATCH: Sarah McBride made history becoming the first openly trans person elected to a state Senate seat. In 2018, she explained why the Trump administration wouldn't discourage her work.