Hedge fund manager, Aberdeen Asset Management PLC, has entered into an agreement with Credit Suisse to acquire their £40 billion ($58 billion) long-only asset management arm, making Aberdeen the the UK’s largest listed fund manager.
Credit Suisse sold the fund arm for approximately 240 million shares in Aberdeen, valued at £250 million ($363 million). The closing of the deal is to take place on 30 June 2009, subject to shareholder and regulatory approval.
Aberdeen’s largest hedge fund shareholder, Martin Hughes, Chief Executive of Toscafund, said, “Toscafund has already confirmed its support for this transformational acquisition, which has been made possible by the excellent operating platform offered by Aberdeen. Toscafund believes that the transaction is of clear benefit to the clients and shareholders of Aberdeen Asset Management and Credit Suisse.”
The acquired business is a long-only traditional asset manager with a leading presence in Europe, Asia and Australasia. It offers a broad product range, diversified predominantly across fixed income, money market and equities, with a variety of investment styles that will be integrated into Aberdeen’s investment processes. Its products are sold primarily to third party clients, with a significant minority of assets sourced through Credit Suisse’s Private Banking division, one of the world’s largest wealth managers.
Aberdeen has agreed an extension of the existing distribution agreement with Credit Suisse, this will give Aberdeen greater access to the banking network of Credit Suisse.
With the new acquisition, Aberdeen has opportunity to achieve greater scale in certain markets where the Group already has a presence, such as the UK, Australia, Germany, Switzerland and Japan. The Acquisition will also strengthen Aberdeen’s offering in certain product areas
“The acquisition confirms Aberdeen’s position as a leading global asset manager and provides us with greater access to the distribution network of Credit Suisse and its Private Banking division, one of the world’s largest wealth managers." Martin Gilbert, Chief Executive of Aberdeen, said, “This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies, complementing our organic growth."
“Given our proven track record of integrating businesses, we are well placed to ensure a smooth transition of the Credit Suisse assets to Aberdeen. We look forward to welcoming our new colleagues and clients, and also to welcoming Credit Suisse as a significant shareholder in Aberdeen. We believe that this transaction will be for the long-term benefit of all our shareholders.”
31 Dec 2008
Silk Invest / Danfonds Team to Launch 2 new Hedge Funds
Specialist asset management firm, Silk Invest Ltd, has acquired Danfonds Frontier Fund SPC., a Cayman based hedge fund, in an all equity deal, Silk Invest also bought majority share in Danfonds Frontier Fund SPC, which will be renamed Silk Invest Frontier Fund SPC, Danfonds Investment Management (Cayman) Limited will be renamed Silk Invest (Cayman) Limited.
The new team will launch two Luxembourg UCITS funds, African Lions and Arab Falcons, in the first quarter of 2009. The Silk Invest Frontier Fund SPC will be relaunched in the second quarter of 2009 after finalizing the new offering memorandum and the various counterparty agreements.
Zin Bekkali, CEO of Silk Invest, comments that “the deal is a uniquely structured combination of talents that complements our new African and Middle Eastern fund platform.” Following the transaction, Daniel Broby, CEO of Danfonds, will become the Chief Investment Officer of Silk Invest.
Daniel Broby says that the deal “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets as a resultof the dramatic declines caused by the credit crisis; to which these economies are partially immune.”
Dr Heinz Hockmann, the Chairman of Silk Invest, notes that “The synergies between the Silk African Lions Fund, the Silk Arab Falcons Fund and the Danfonds Frontier Fund were immediately obvious. Our aim was always to become the most credible frontier markets specialist. With this deal we can demonstrate to our investors, more than ever, that we have an unrivalled frontier markets team, managing a unique investment offering across different asset classes.”
The new team will launch two Luxembourg UCITS funds, African Lions and Arab Falcons, in the first quarter of 2009. The Silk Invest Frontier Fund SPC will be relaunched in the second quarter of 2009 after finalizing the new offering memorandum and the various counterparty agreements.
Zin Bekkali, CEO of Silk Invest, comments that “the deal is a uniquely structured combination of talents that complements our new African and Middle Eastern fund platform.” Following the transaction, Daniel Broby, CEO of Danfonds, will become the Chief Investment Officer of Silk Invest.
Daniel Broby says that the deal “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets as a resultof the dramatic declines caused by the credit crisis; to which these economies are partially immune.”
Dr Heinz Hockmann, the Chairman of Silk Invest, notes that “The synergies between the Silk African Lions Fund, the Silk Arab Falcons Fund and the Danfonds Frontier Fund were immediately obvious. Our aim was always to become the most credible frontier markets specialist. With this deal we can demonstrate to our investors, more than ever, that we have an unrivalled frontier markets team, managing a unique investment offering across different asset classes.”
27 Dec 2008
Morrison & Foerster Hire NY Hedge Fund Lawyer Among Others
Morrison & Foerster LLP announced the election of ten new lawyers into their partnership, including specialists in venture capital, hedge funds, bio-technology, patents, corporate transactions and chapter 11 bankruptcy, among others. Their election is effective January 1, 2009.
“We have elected an exceptional group of lawyers to the partnership. This year’s newly elected partners reflect continued investment in our distinguishing practice strengths and our international reach,” said Keith Wetmore, Chairman of Morrison & Foerster. “Our new partners have demonstrated a commitment to client service and legal excellence. We are confident that they will make tremendous contributions to our clients’ success and our Firm’s progress in the years ahead.”
Elected as Partner Thomas M. Devaney, a member of the Business Department, will be resident in the New York office. Devaney specializes in private equity fund formation and investment, representing a variety of domestic and international private equity funds, including real estate funds, venture capital funds, and debt funds, in addition to hedge funds with a broad range of investment strategies.
The other lawyers elected as Partners are; Anders T. Aannestad, Jonathan Bockman, Christopher B. Eide, James M. Halstead, Rebekah Kaufman, David E. Melaugh, James J. Mullen III, Ph.D., Norman S. Rosenbaum, and Ivan G. Smallwood, a resident in the Tokyo office.
“We have elected an exceptional group of lawyers to the partnership. This year’s newly elected partners reflect continued investment in our distinguishing practice strengths and our international reach,” said Keith Wetmore, Chairman of Morrison & Foerster. “Our new partners have demonstrated a commitment to client service and legal excellence. We are confident that they will make tremendous contributions to our clients’ success and our Firm’s progress in the years ahead.”
Elected as Partner Thomas M. Devaney, a member of the Business Department, will be resident in the New York office. Devaney specializes in private equity fund formation and investment, representing a variety of domestic and international private equity funds, including real estate funds, venture capital funds, and debt funds, in addition to hedge funds with a broad range of investment strategies.
The other lawyers elected as Partners are; Anders T. Aannestad, Jonathan Bockman, Christopher B. Eide, James M. Halstead, Rebekah Kaufman, David E. Melaugh, James J. Mullen III, Ph.D., Norman S. Rosenbaum, and Ivan G. Smallwood, a resident in the Tokyo office.
24 Dec 2008
Blackstone Makes Single Manager Hedge Fund Changes to Ensure Profitability
The Blackstone Group is making changes to the single manager hedge funds businesses within its Marketable Alternative Asset Management (MAAM) segment.
Blackstone is consolidating its distressed securities fund onto a single operating platform and moving Blackstone Kailix Advisors, the investment manager of Blackstone’s long/short equities fund, which will be spun off to its management team led by Manish Mittal, who intends to form a new fund as an independent entity.
Commenting on the changes, Tony James, President and Chief Operating Officer of Blackstone, said, “We believe these measures will enable us to operate more profitably in the current environment. Although these funds have performed better than the S&P 500 and other global market averages, we expect that adverse fundraising conditions in the hedge fund industry will prevent these two initiatives from scaling up to a size where they are meaningful for our business on a stand alone basis.”
Blackstone will be an investor in the new fund and investors in the existing fund will be offered the option of investing in the new fund on a preferred basis as their interests in the existing fund are liquidated. Although the existing fund has outperformed global equities measures, its size does not make it a core strategic business for Blackstone and it is not anticipated that this will change in the near term. The fund has not imposed any gates or liquidity restrictions on investors.
“We continue to have a significant commitment to the hedge fund business," James continued, "The current market turmoil with its associated dislocation of asset prices presents us with a multitude of compelling opportunities to invest capital. It is during times like these that we need to be especially disciplined to focus both our people and our capital on the largest opportunities.”
Blackstone is consolidating its distressed securities fund onto a single operating platform and moving Blackstone Kailix Advisors, the investment manager of Blackstone’s long/short equities fund, which will be spun off to its management team led by Manish Mittal, who intends to form a new fund as an independent entity.
Commenting on the changes, Tony James, President and Chief Operating Officer of Blackstone, said, “We believe these measures will enable us to operate more profitably in the current environment. Although these funds have performed better than the S&P 500 and other global market averages, we expect that adverse fundraising conditions in the hedge fund industry will prevent these two initiatives from scaling up to a size where they are meaningful for our business on a stand alone basis.”
Blackstone will be an investor in the new fund and investors in the existing fund will be offered the option of investing in the new fund on a preferred basis as their interests in the existing fund are liquidated. Although the existing fund has outperformed global equities measures, its size does not make it a core strategic business for Blackstone and it is not anticipated that this will change in the near term. The fund has not imposed any gates or liquidity restrictions on investors.
“We continue to have a significant commitment to the hedge fund business," James continued, "The current market turmoil with its associated dislocation of asset prices presents us with a multitude of compelling opportunities to invest capital. It is during times like these that we need to be especially disciplined to focus both our people and our capital on the largest opportunities.”
23 Dec 2008
Hedge Funds Take Bullish Position On Gold
In the last week, leading up to today, (Tuesday) hedge funds and other "large speculators" took their largest bullish position (when compared with the number of bearish bets) since early August.
Commercial traders such as refineries, mints, wholesalers and bullion banks, took their smallest bull position in 19 weeks, as they sold the "long" contracts bought by speculative players.
This has returned the balance of bull/bear positions in December to what has been considered the norm for the last four years, with over 85% of speculative position betting on a rise.
Last week also saw the outstanding number of open contracts in Gold Futures and options rise more than 9%, but it remained one-third below the record set in Jan. 2008.
"If gold can close the year above its January 2008 open, it will be one of the few positive asset stories of the year," notes new analysis from Mitsui, the precious metals dealer in London, "from a wealth preservation perspective at least."
"With the Bernanke printing press set to move into overdrive next year," Mitsui said regarding the future of Gold in 2009, "along with the not so pretty reality of negative real interest rates, it is difficult to put together a positive thesis for the US Dollar," Mitsui said, "In such a climate, gold could flourish."
Commercial traders such as refineries, mints, wholesalers and bullion banks, took their smallest bull position in 19 weeks, as they sold the "long" contracts bought by speculative players.
This has returned the balance of bull/bear positions in December to what has been considered the norm for the last four years, with over 85% of speculative position betting on a rise.
Last week also saw the outstanding number of open contracts in Gold Futures and options rise more than 9%, but it remained one-third below the record set in Jan. 2008.
"If gold can close the year above its January 2008 open, it will be one of the few positive asset stories of the year," notes new analysis from Mitsui, the precious metals dealer in London, "from a wealth preservation perspective at least."
"With the Bernanke printing press set to move into overdrive next year," Mitsui said regarding the future of Gold in 2009, "along with the not so pretty reality of negative real interest rates, it is difficult to put together a positive thesis for the US Dollar," Mitsui said, "In such a climate, gold could flourish."
19 Dec 2008
NAZRA Hedge Fund Return Index Surges
The Ernst and Young New Zealand Absolute Return index surged to a new high in November 2008, gaining +1.502% for the month, putting year-to-date performance at +17.597%, and year-on-year performance at +21.104%.
As with October, it was the trend-following, tail risk, volatility and commodity managers that saw positive returns, whilst global equities were weaker in line with global equity indices.
New Zealand Absolute Return Association (NZARA) Chairman Anthony Limbrick, who is also Chief Investment Officer of hedge fund Pure Capital (a contributing manager), said “we are close to completing our first calendar year of record-keeping for the index and it is heartening to see such a strong ensemble performance from the constituent managers”.
The Ernst and Young New Zealand Absolute Return Index is based on a concept of simple averages i.e. each of the eight constituent managers presents an “NZARA Average”, an average of the performance of all their funds or programs that are available for new money. In some cases a manager is presenting an average of several products. This collection of averages is then compiled again as a simple average to create the index. Ernst and Young compiles the index but is not a verification agent and does not guarantee the veracity of the performance numbers presented by the individual managers.
The index documentation was compiled by law firm Minter Ellison Rudd Watts.
As with October, it was the trend-following, tail risk, volatility and commodity managers that saw positive returns, whilst global equities were weaker in line with global equity indices.
New Zealand Absolute Return Association (NZARA) Chairman Anthony Limbrick, who is also Chief Investment Officer of hedge fund Pure Capital (a contributing manager), said “we are close to completing our first calendar year of record-keeping for the index and it is heartening to see such a strong ensemble performance from the constituent managers”.
The Ernst and Young New Zealand Absolute Return Index is based on a concept of simple averages i.e. each of the eight constituent managers presents an “NZARA Average”, an average of the performance of all their funds or programs that are available for new money. In some cases a manager is presenting an average of several products. This collection of averages is then compiled again as a simple average to create the index. Ernst and Young compiles the index but is not a verification agent and does not guarantee the veracity of the performance numbers presented by the individual managers.
The index documentation was compiled by law firm Minter Ellison Rudd Watts.
18 Dec 2008
Lawfirm Examines Hedge Fund Misrepresentation for Investors Benifit
Class action law firm Bernstein Liebhard LLP said that dozens of investors, who have lost hundreds of millions of dollars by investing in Madoff Investment Securities through hedge funds and other collective investment funds, have consulted and sought the advice of the firm.
Bernstein Liebhard is investigating whether, among other things, these investment funds conducted proper due diligence before investing heavily in Madoff Securities, and whether these funds ignored the warning signs that Madoff was conducting a large-scale fraud. Bernstein Liebhard is also investigating whether these funds misrepresented to investors the concentration of the funds' investments in Madoff Securities.
On December 11, 2008, Madoff was arrested by federal authorities who say Madoff admitted to operating a $50 billion Ponzi scheme in which Madoff used the principal investments of new clients to pay fictitious "returns" to other clients. The criminal action against Madoff is pending in the Southern District of New York, 08-Mag-2735. Although Madoff had only a few individual clients that invested directly with him, individuals and institutions across the world invested indirectly and sometimes unknowingly in Madoff's scheme through "feeder funds" - such as Fairfield Sentry Ltd. (run by the Fairfield Greenwich Group), Rye Select Fund (run by Tremont Group Holdings), and Kingate Global Fund (run by FIM Advisers LLP) - whose sole purpose was to funnel money to Madoff Securities. Hedge funds and funds of funds invested heavily with Madoff's feeder funds (including Fairfield) despite many warning signs that the consistent returns Madoff delivered were too good to be true.
"Hedge fund, fund of funds managers, or other collective investment fund that lost money as a result of its investment in Madoff Securities, may have a right of action to recoup losses," Bernstein Liebhard says "We has assembled a team of former government prosecutors, former SEC trial attorneys, and investigators to analyze the various legal claims available to investors injured by the Madoff scheme.
Bernstein Liebhard is one of the preeminent plaintiffs' class action law firms in the country, having pursued hundreds of securities and consumer cases and recovering approximately $2 billion for its clients. It has been named to The National Law Journal's "Plaintiffs' Hot List" in each of the last six years.
Bernstein Liebhard is investigating whether, among other things, these investment funds conducted proper due diligence before investing heavily in Madoff Securities, and whether these funds ignored the warning signs that Madoff was conducting a large-scale fraud. Bernstein Liebhard is also investigating whether these funds misrepresented to investors the concentration of the funds' investments in Madoff Securities.
On December 11, 2008, Madoff was arrested by federal authorities who say Madoff admitted to operating a $50 billion Ponzi scheme in which Madoff used the principal investments of new clients to pay fictitious "returns" to other clients. The criminal action against Madoff is pending in the Southern District of New York, 08-Mag-2735. Although Madoff had only a few individual clients that invested directly with him, individuals and institutions across the world invested indirectly and sometimes unknowingly in Madoff's scheme through "feeder funds" - such as Fairfield Sentry Ltd. (run by the Fairfield Greenwich Group), Rye Select Fund (run by Tremont Group Holdings), and Kingate Global Fund (run by FIM Advisers LLP) - whose sole purpose was to funnel money to Madoff Securities. Hedge funds and funds of funds invested heavily with Madoff's feeder funds (including Fairfield) despite many warning signs that the consistent returns Madoff delivered were too good to be true.
"Hedge fund, fund of funds managers, or other collective investment fund that lost money as a result of its investment in Madoff Securities, may have a right of action to recoup losses," Bernstein Liebhard says "We has assembled a team of former government prosecutors, former SEC trial attorneys, and investigators to analyze the various legal claims available to investors injured by the Madoff scheme.
Bernstein Liebhard is one of the preeminent plaintiffs' class action law firms in the country, having pursued hundreds of securities and consumer cases and recovering approximately $2 billion for its clients. It has been named to The National Law Journal's "Plaintiffs' Hot List" in each of the last six years.
17 Dec 2008
Hedge My Job
It looks like the market for financial `dream jobs´ may have actually perked up amidst the financial turmoil of the past few months.
Investment managers saw a 22% increase in job offers as rival firms take advantage of the increasing number of financial services workers looking for a job by "snapping up the cream of the crop on much less than they would have been able to 6 months ago," according to Powerchex Limited.
Hedge fund and insurance companies also made more employment offers than 6 months ago as those companies who have been able to remain stable through the turmoil prepare to put themselves at the head of the pack to take advantage of any economic recovery.
Here is another site I came across, it looks pretty new, but I'll keep tabs on it through this blog as I think it has potenital; www.hedgemyjob.com
Investment managers saw a 22% increase in job offers as rival firms take advantage of the increasing number of financial services workers looking for a job by "snapping up the cream of the crop on much less than they would have been able to 6 months ago," according to Powerchex Limited.
Hedge fund and insurance companies also made more employment offers than 6 months ago as those companies who have been able to remain stable through the turmoil prepare to put themselves at the head of the pack to take advantage of any economic recovery.
Here is another site I came across, it looks pretty new, but I'll keep tabs on it through this blog as I think it has potenital; www.hedgemyjob.com
Conference in Brussels on Carbon Capture & Storage
Platts 3rd Annual European Carbon Capture and Storage (CCS) conference is assembling the CCS community to discuss and review CCS projects in their various stages and look to uncover opportunities in what will become a changed regulatory environment to ensure CCS lives up to its potential.
Some of the issues to be covered include, delivering EU Regulatory Framework, finance and investment, public perception, international CCS case-studies and storage selection and liability among others. Some leading companies are also planning to highlight their latest CCS projects.
Carbon Capture and Storage has developed in a short space of time from coal-fired power’s much-heralded saving grace, to Europe’s energy policy catchphrase to real, on-the-ground pilot project status.
With these first-stage investments underway, the energy industry is closer than ever to a genuine assessment of CCS’ viability. CSS says they are looking for updates from the major actors - how are the pilot projects progressing? Is there an adequate spread of projects in the pipeline to test all potential technologies?
Some of the issues to be covered include, delivering EU Regulatory Framework, finance and investment, public perception, international CCS case-studies and storage selection and liability among others. Some leading companies are also planning to highlight their latest CCS projects.
Carbon Capture and Storage has developed in a short space of time from coal-fired power’s much-heralded saving grace, to Europe’s energy policy catchphrase to real, on-the-ground pilot project status.
With these first-stage investments underway, the energy industry is closer than ever to a genuine assessment of CCS’ viability. CSS says they are looking for updates from the major actors - how are the pilot projects progressing? Is there an adequate spread of projects in the pipeline to test all potential technologies?
16 Dec 2008
AIMB Launched by Hedge Fund Restructuring Advisors
Alternative money managers and hedge fund restructuring advisers, Grisons Peak and IGS, have formed a joint venture to launch the Alternative Investment Merchant Banking (AIMB). The AIMB is to advise on M&A and restructuring deals for firms in the alternative assets industry, the business will be co-led by Paul Sullivan, Partner of Grisons Peak, and John Godden, CEO of IGS Group..
“With a 30% decline in AUM and an expected 50% decrease in the number of Fund managers and no incentive fees for 2008," John Godden, CEO of IGS Group, said, "we will see a continuing surge in merger and acquisitions activity as the Hedge Fund industry goes into an accelerated Darwinian phase. The alternative assets industry has traditionally been formed of boutiques which make for particular and complex merger issues requiring specialist knowledge of both Hedge Funds and M&A expertise.”
“The reduction in AUM in 2008 and the expected continuation of this trend in 2009 will increase the pressure on the owners and managers of alternative investment firms. Many of these firms will seek partners in order to improve profitability and increase their attractiveness to investors.” Paul Sullivan, Partner of Grisons Peak, concluded.
The 50:50 joint venture AIMB targets UK and European deals deal involving single fund managers with AUM of between $250m to $750m or Fund of Hedge Fund managers with AUM of between $400m and $1bn.
“With a 30% decline in AUM and an expected 50% decrease in the number of Fund managers and no incentive fees for 2008," John Godden, CEO of IGS Group, said, "we will see a continuing surge in merger and acquisitions activity as the Hedge Fund industry goes into an accelerated Darwinian phase. The alternative assets industry has traditionally been formed of boutiques which make for particular and complex merger issues requiring specialist knowledge of both Hedge Funds and M&A expertise.”
“The reduction in AUM in 2008 and the expected continuation of this trend in 2009 will increase the pressure on the owners and managers of alternative investment firms. Many of these firms will seek partners in order to improve profitability and increase their attractiveness to investors.” Paul Sullivan, Partner of Grisons Peak, concluded.
The 50:50 joint venture AIMB targets UK and European deals deal involving single fund managers with AUM of between $250m to $750m or Fund of Hedge Fund managers with AUM of between $400m and $1bn.
FactSet Anounces 2008 Global Revenues
FactSet Research Systems Inc. announced the first quarter results ending November 30, 2008, showed revenue increase to $155.6 million, an increase of 16% compared to the prior year.
Operating income for the first quarter advanced to $51.3 million, up 21% from $42.5 million in the same period of fiscal 2008. Net income rose to $35.6 million as compared to $29.4 million a year ago. Diluted earnings per share increased to $0.73, up from $0.58 in the same period of fiscal 2008. Included in the just completed first quarter were income tax benefits of $1.4 million or $0.03 per diluted share related to the reenactment of the U.S. Federal R&D credit in October 2008, retroactive to January 1, 2008. The first quarter of fiscal 2009 marked the first full quarter of operations for FactSet Fundamentals. FactSet Fundamentals increased revenues by $0.8 million and reduced diluted earnings per share by $0.03 per share.
Philip A. Hadley, Chairman and CEO said, "Our earnings results in the first quarter clearly demonstrate the strength of FactSet's business model. In the most turbulent three moths for our clients in decades, FactSet was able to find productivity solutions for them and grow both our ASV and EPS."
ASV increased $7.0 million when excluding currency effects during the first quarter and rose 14.5% or $78.4 million over the prior year. Including foreign exchange, ASV increased $5.2 million during the quarter.
ASV was $620 million at November 30, 2008. Of this total, 79% of ASV is derived from buy-side institutions and the remainder derives from the sell-side firms who perform M&A advisory work and equity research. Many sources are predicting that the current market turmoil will result in a reduction of the number of hedge funds. The contribution from hedge funds to FactSet's total ASV is 6%. ASV at any given point in time represents the forward-looking revenues for the next 12 months from all annual subscription services currently being supplied to clients.
The Company will host a conference call today, December 16, 2008 at 11:00 a.m. (EST) to review the first quarter fiscal 2009 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
About FactSet
FactSet Research Systems Inc. combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations from more than twenty-three locations worldwide.
Operating income for the first quarter advanced to $51.3 million, up 21% from $42.5 million in the same period of fiscal 2008. Net income rose to $35.6 million as compared to $29.4 million a year ago. Diluted earnings per share increased to $0.73, up from $0.58 in the same period of fiscal 2008. Included in the just completed first quarter were income tax benefits of $1.4 million or $0.03 per diluted share related to the reenactment of the U.S. Federal R&D credit in October 2008, retroactive to January 1, 2008. The first quarter of fiscal 2009 marked the first full quarter of operations for FactSet Fundamentals. FactSet Fundamentals increased revenues by $0.8 million and reduced diluted earnings per share by $0.03 per share.
Philip A. Hadley, Chairman and CEO said, "Our earnings results in the first quarter clearly demonstrate the strength of FactSet's business model. In the most turbulent three moths for our clients in decades, FactSet was able to find productivity solutions for them and grow both our ASV and EPS."
ASV increased $7.0 million when excluding currency effects during the first quarter and rose 14.5% or $78.4 million over the prior year. Including foreign exchange, ASV increased $5.2 million during the quarter.
ASV was $620 million at November 30, 2008. Of this total, 79% of ASV is derived from buy-side institutions and the remainder derives from the sell-side firms who perform M&A advisory work and equity research. Many sources are predicting that the current market turmoil will result in a reduction of the number of hedge funds. The contribution from hedge funds to FactSet's total ASV is 6%. ASV at any given point in time represents the forward-looking revenues for the next 12 months from all annual subscription services currently being supplied to clients.
The Company will host a conference call today, December 16, 2008 at 11:00 a.m. (EST) to review the first quarter fiscal 2009 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
About FactSet
FactSet Research Systems Inc. combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations from more than twenty-three locations worldwide.
15 Dec 2008
Hong Kong Hedge Fund Triples Investor Relation Technology
Hong Kong-based hedge fund manager PMA has chosen to more than triple the number of users of PerTrac CMS in the company's Hong Kong, Tokyo, New York, London, and Dubai offices.
PerTrac CMS is an alternative investment workflow management solution used for investor relations, capital raising and investment management workflows.
"PMA's marketing reach has expanded significantly over the last 12 months and we now has marketing teams based in our Dubai and London offices as well as representations in New York," noted PMA Chief Technology Officer Shane McPherson.
PMA was established in July 2002 to provide investment advisory and investment with assets over $2 billion, PMA currently has over 70 professionals employed in Hong Kong, Sydney, London and Dubai, and became a member of the SPARX group in April 200, the largest publicly listed asset manager in Asia.
PerTrac CMS is an alternative investment workflow management solution used for investor relations, capital raising and investment management workflows.
"PMA's marketing reach has expanded significantly over the last 12 months and we now has marketing teams based in our Dubai and London offices as well as representations in New York," noted PMA Chief Technology Officer Shane McPherson.
PMA was established in July 2002 to provide investment advisory and investment with assets over $2 billion, PMA currently has over 70 professionals employed in Hong Kong, Sydney, London and Dubai, and became a member of the SPARX group in April 200, the largest publicly listed asset manager in Asia.
Salus Alpha Hedge Funds Not Exposed To Madoff Strategy
Vienna based hedge fund manager Salus Alpha Group Services GmbH said that any exposure to Madoff funds were systematically prevented by the proprietary investment approach of their funds at all times.
"I am not shocked that Madoff did blow up but I am shocked that so many obviously unqualified naive fund of hedge fund managers who are obviously doing no due diligence nor do they understand hedge fund strategies do manage so much amounts of money and wonder why this happened to them" said Oliver Prock, CIO of Salus Alpha.
"We never invested into US and UK hedge funds which work under the rules of 'don’t ask, don’t tell'," the hedge fund manager said, "We always scrutinized this model by one simple question to the biggest hedge fund manager?. A 'No' always meant that there are problems behind such as in the Madoff situation."
The investment approach of Salus Alpha consists of state of the art due diligence and executing investments as managed accounts only, which the fund manager says has prevented and will prevent the company at from investing into Illusion Alpha.
"We did not get any inquiry form existing investors since they know that all funds Salus Alpha manages are fully regulated under UCITS III and do invest in liquid alpha strategies through managed accounts only and are therefore protected at all times," Salus Alpha concluded.
"I am not shocked that Madoff did blow up but I am shocked that so many obviously unqualified naive fund of hedge fund managers who are obviously doing no due diligence nor do they understand hedge fund strategies do manage so much amounts of money and wonder why this happened to them" said Oliver Prock, CIO of Salus Alpha.
"We never invested into US and UK hedge funds which work under the rules of 'don’t ask, don’t tell'," the hedge fund manager said, "We always scrutinized this model by one simple question to the biggest hedge fund manager?. A 'No' always meant that there are problems behind such as in the Madoff situation."
The investment approach of Salus Alpha consists of state of the art due diligence and executing investments as managed accounts only, which the fund manager says has prevented and will prevent the company at from investing into Illusion Alpha.
"We did not get any inquiry form existing investors since they know that all funds Salus Alpha manages are fully regulated under UCITS III and do invest in liquid alpha strategies through managed accounts only and are therefore protected at all times," Salus Alpha concluded.
Dow Jones Hedge Fund Strategy Benchmark Review
West Palm Beach (HedgeCo.net) - In the monthly report from Dow Jones Indexes on the performance of Hedge Fund Strategy Benchmarks, only one of four strategies, merger arbitrage, posted net-of-fee gains in November.
After hedge funds experienced two of the most volatile months in market history, merger arbitrage emerged with a small positive net-of-fee gain in November, returning 0.15%. The small gain held YTD performance for merger arbitrage at approximately the same level as last month, down about -9%.
Convertible arbitrage was hit the hardest with a loss of -4.80%, followed by event driven and distressed securities, which were down -6.35% and -7.47%, respectively, for November.
The equity market neutral and equity long/short benchmarks were suspended at the start of the month as a result of the temporary risk mitigation measures taken by the investment manager of the managed account platform that supports the Dow Jones Hedge Fund Strategy Benchmarks. It has not been determined when calculation of these benchmarks will resume.
On a float-adjusted basis, the Dow Jones Wilshire 5000, the only broad measure of the domestic equity market, lost -8% (-8.15% on a full-cap basis) in November decreasing its YTD return to -38.30% (-38.37% on a full-cap basis).
The fixed income asset class, as measured by the Dow Jones Corporate Bond Index was up 4.88% this month and its cumulative return is down -5.99% for the year. Finally, the Dow Jones Wilshire Global Index, the broadest measure of global equity market, lost -6.73% for the month decreasing its YTD return to -44.68% for 2008.
November 2008 figures for the Dow Jones Hedge Fund Strategy Benchmarks are based on daily estimates net of fees.
After hedge funds experienced two of the most volatile months in market history, merger arbitrage emerged with a small positive net-of-fee gain in November, returning 0.15%. The small gain held YTD performance for merger arbitrage at approximately the same level as last month, down about -9%.
Convertible arbitrage was hit the hardest with a loss of -4.80%, followed by event driven and distressed securities, which were down -6.35% and -7.47%, respectively, for November.
The equity market neutral and equity long/short benchmarks were suspended at the start of the month as a result of the temporary risk mitigation measures taken by the investment manager of the managed account platform that supports the Dow Jones Hedge Fund Strategy Benchmarks. It has not been determined when calculation of these benchmarks will resume.
On a float-adjusted basis, the Dow Jones Wilshire 5000, the only broad measure of the domestic equity market, lost -8% (-8.15% on a full-cap basis) in November decreasing its YTD return to -38.30% (-38.37% on a full-cap basis).
The fixed income asset class, as measured by the Dow Jones Corporate Bond Index was up 4.88% this month and its cumulative return is down -5.99% for the year. Finally, the Dow Jones Wilshire Global Index, the broadest measure of global equity market, lost -6.73% for the month decreasing its YTD return to -44.68% for 2008.
November 2008 figures for the Dow Jones Hedge Fund Strategy Benchmarks are based on daily estimates net of fees.
11 Dec 2008
UAE Asset Manager Launches Hedge Funds
US-based Stream Asset Management announced the launch of a credit dislocation fund and a multi-strategy credit hedge fund, the company said in a press statement.
The move is part of Gulf Stream's aggressive expansion strategy to capitalise on current market opportunities. To further support the firm's growth, Gulf Stream has also opened a New York City office, the statement added.
Earlier this year, Istithmar World Capital, the private equity and alternative investment arm of Istithmar World, acquired a majority stake in Gulf Stream. Gulf Stream Asset Management is majority owned by Istithmar World Capital.
The move is part of Gulf Stream's aggressive expansion strategy to capitalise on current market opportunities. To further support the firm's growth, Gulf Stream has also opened a New York City office, the statement added.
Earlier this year, Istithmar World Capital, the private equity and alternative investment arm of Istithmar World, acquired a majority stake in Gulf Stream. Gulf Stream Asset Management is majority owned by Istithmar World Capital.
10 Dec 2008
Africa Roundtable Hedge Fund Update
The Opalesque South Africa Roundtable was held November 10th 2008 in their Cape Town Office. There, the participants also discussed the particularities of investing in Africa (ex-South Africa).
South Africa's equity and fixed income markets displayed exemplary robustness during 2008. Many global allocators may not be aware that the South African financial market infrastructure matches or exceeds its "first world" counterparts in many respects.
The equity and fixed income markets demonstrated exemplary robustness throughout the turbulences of 2008: no short-selling ban, no trading halt and no failed trades. Offshore investors can benefit from efficient and proven ways to get pure South African alpha without taking currency risk.
During the Roundtable, portfolio managers explained new ways to construct hedges, and informed on new and upcoming products. How global investors can benefit from the "Africa story", which is probably the largest opportunity set in the new investment paradigm called "frontier investing"? How do you deal with restricted liquidity, and is Africa really uncorrelated?
The following experts participated in the Opalesque South Africa Roundtable: James Gubb, Founding Partner of Clear Horizon Capital St. John Bungey, Partner, Praesidium Capital Management James Addo, Portfolio Manager, Finch Asset Management Simone Lowe, Portfolio Manager, Thames River Capital Andy Pfaff, Founding Partner of Trendline Funds Ian Hamilton, Founder, IDS Group Ryan Proudfoot, Co-Head RMB Prime Broking Warren Chapman, Head of Peregrine Prime Broking Kevin Ewer, Portfolio Manager, Blue Ink Investments.
South African hedge fund managers and hedge fund investors share surprising insights. For example, - South African single strategy hedge funds offer transparency "far superior to anything anywhere else", according to investors - South African hedge funds suffered their first - and only until that point - net redemptions in October 2008, but only 2.5% of total assets - South Africa is the first country in the world that actually distinguishes between normal fund managers and hedge fund managers, with higher criteria required for hedge fund managers.
South Africa's equity and fixed income markets displayed exemplary robustness during 2008. Many global allocators may not be aware that the South African financial market infrastructure matches or exceeds its "first world" counterparts in many respects.
The equity and fixed income markets demonstrated exemplary robustness throughout the turbulences of 2008: no short-selling ban, no trading halt and no failed trades. Offshore investors can benefit from efficient and proven ways to get pure South African alpha without taking currency risk.
During the Roundtable, portfolio managers explained new ways to construct hedges, and informed on new and upcoming products. How global investors can benefit from the "Africa story", which is probably the largest opportunity set in the new investment paradigm called "frontier investing"? How do you deal with restricted liquidity, and is Africa really uncorrelated?
The following experts participated in the Opalesque South Africa Roundtable: James Gubb, Founding Partner of Clear Horizon Capital St. John Bungey, Partner, Praesidium Capital Management James Addo, Portfolio Manager, Finch Asset Management Simone Lowe, Portfolio Manager, Thames River Capital Andy Pfaff, Founding Partner of Trendline Funds Ian Hamilton, Founder, IDS Group Ryan Proudfoot, Co-Head RMB Prime Broking Warren Chapman, Head of Peregrine Prime Broking Kevin Ewer, Portfolio Manager, Blue Ink Investments.
South African hedge fund managers and hedge fund investors share surprising insights. For example, - South African single strategy hedge funds offer transparency "far superior to anything anywhere else", according to investors - South African hedge funds suffered their first - and only until that point - net redemptions in October 2008, but only 2.5% of total assets - South Africa is the first country in the world that actually distinguishes between normal fund managers and hedge fund managers, with higher criteria required for hedge fund managers.
Neuberger Berman to buy Lehman Holdings
Due to their recent share decrease, Lehman Brothers Holdings Inc. has agreed to sell majority interest to asset manager Neuberger Berman. The transaction will create a new, independent investment management company to be called Neuberger Investment Management, managing approximately $160 billion of assets as of 30 November 2008.
Lehman Brothers Private Equity Partners Limited (LBPE) and certain of its affiliates will be a part of this transaction. The sale is subject to final Bankruptcy Court approval, and closing is expected in the first quarter of 2009.
LBPE's Board of Directors believes this transaction will significantly benefit the Company by providing the management team of the Investment Manager a strong platform from which to continue managing LBPE's high quality private equity portfolio and support the long term success of the Company.
LBPE will also host a conference call later this week for investors and analysts to discuss the Investment Manager update and the Company's performance. An updated investor presentation will be published on the Company's Web site prior to the conference call on 12 December 2008.
Lehman Brothers Private Equity Partners Limited (LBPE) and certain of its affiliates will be a part of this transaction. The sale is subject to final Bankruptcy Court approval, and closing is expected in the first quarter of 2009.
LBPE's Board of Directors believes this transaction will significantly benefit the Company by providing the management team of the Investment Manager a strong platform from which to continue managing LBPE's high quality private equity portfolio and support the long term success of the Company.
LBPE will also host a conference call later this week for investors and analysts to discuss the Investment Manager update and the Company's performance. An updated investor presentation will be published on the Company's Web site prior to the conference call on 12 December 2008.
Are Managed Forex Accounts Suitable for Short-term Hedge Fund Investors?
In an interview with Geneva based Forex trader and currency specialist Robert Paulson, he said; "Trading the Forex market is for serious investors seeking alternative investment opportunities."
Clients pulling out of hedge funds due to the current state of affairs has raised questions about short term options and the possibility that investors may find a managed account more suitable.
"Understanding the dynamics of diversification and proper asset allocation is an easy formula to understand. To some investors currency trading is considered a “must” and a “cannot do with out” investment class. In Forex there are no “bull markets” or “bear markets”, having the mobility to trade virtually anywhere in the world is essential when it comes to proper investing.”
Currently operating a managed account program in Geneva, Paulson said he is looking to Dubai and the UAE for the next wave of investors, "The dynamics of the current investment environment offers opportunity for those with a realistic appetite for risk. The Foreign Exchange (Forex) markets have been an asset class most enjoyed by the informed. With over a trillion dollars being traded each day opportunity is mentioned often. In the current financial environment we hear about stock markets falling, commodities selling off and real estate prices dropping. What we don’t hear much about is where serious money is being made."
Making money has never been easy and respectable returns are often taken for granted. To achieve consistency one must thoroughly analyze, track, and monitor economic conditions around the globe.
Paulson also warned, "There is an enormous amount of time needed to ensure intelligent representation in a fast moving environment. One should understand that where there is a loss there is also a profit, zero-sum is not a game but a way of life. It is also a breeding ground for those who understand."
Clients pulling out of hedge funds due to the current state of affairs has raised questions about short term options and the possibility that investors may find a managed account more suitable.
"Understanding the dynamics of diversification and proper asset allocation is an easy formula to understand. To some investors currency trading is considered a “must” and a “cannot do with out” investment class. In Forex there are no “bull markets” or “bear markets”, having the mobility to trade virtually anywhere in the world is essential when it comes to proper investing.”
Currently operating a managed account program in Geneva, Paulson said he is looking to Dubai and the UAE for the next wave of investors, "The dynamics of the current investment environment offers opportunity for those with a realistic appetite for risk. The Foreign Exchange (Forex) markets have been an asset class most enjoyed by the informed. With over a trillion dollars being traded each day opportunity is mentioned often. In the current financial environment we hear about stock markets falling, commodities selling off and real estate prices dropping. What we don’t hear much about is where serious money is being made."
Making money has never been easy and respectable returns are often taken for granted. To achieve consistency one must thoroughly analyze, track, and monitor economic conditions around the globe.
Paulson also warned, "There is an enormous amount of time needed to ensure intelligent representation in a fast moving environment. One should understand that where there is a loss there is also a profit, zero-sum is not a game but a way of life. It is also a breeding ground for those who understand."
Ronaldo Hermoso Appointed Director of Hedge Funds at OakRun
Hedge fund manager OakRun Capital announced the appointment of Rolando Hermoso as director of funds. Their newly launched Short Term High Yield Fund also delivered November annualized yield of 9.58%.
Hermoso has over 27 years in the investment banking industry at various senior executive levels specializes primarily in the structuring, marketing and the execution of structured finance products. With 10 years at the Bank of America he was also Head of the Investment Bank for Citicorp for Venezuela and the Antilles. He holds Masters degrees in Management and Operations Research from Stanford University and B.S. degrees in applied mathematics and physics.
The Cayman Islands exempted fund launched on October 1st and came in at 9.48% annualized in its first month. The fund's objective is to generate above average current income with a lower overall credit risk profile and maintain a stable NAV.
"We do not believe that simply managing for relative performance is satisfactory to our clients or ourselves." says Scott Rhodenizer, Founder, CEO, and Chief Investment Officer, "While we work to outperform the markets, we strive to do so without excessive risk."
Hermoso has over 27 years in the investment banking industry at various senior executive levels specializes primarily in the structuring, marketing and the execution of structured finance products. With 10 years at the Bank of America he was also Head of the Investment Bank for Citicorp for Venezuela and the Antilles. He holds Masters degrees in Management and Operations Research from Stanford University and B.S. degrees in applied mathematics and physics.
The Cayman Islands exempted fund launched on October 1st and came in at 9.48% annualized in its first month. The fund's objective is to generate above average current income with a lower overall credit risk profile and maintain a stable NAV.
"We do not believe that simply managing for relative performance is satisfactory to our clients or ourselves." says Scott Rhodenizer, Founder, CEO, and Chief Investment Officer, "While we work to outperform the markets, we strive to do so without excessive risk."
9 Dec 2008
Hedge Fund Launched in '07 Completes Successful 1st Year
The DM Swiss Equity Asymmetric Fund has successfully completed its first year of operation realising a net gain for its investors +2.67%.
"We are extremely pleased to see the fund successfully navigate its way through one of the most challenging environments for investors in living memory." Marc-Etienne Rouge, partner at Delman SA said, "Launching a new fund is a difficult task at the best of times, but to do so, and so successfully in this type of environment is remarkable and a credit to our entire team."
The DM Swiss Equity Asymmetric Fund employs a conservative long/short fundamental stock picking strategy to the Swiss equity market and is co-managed by Urs Heinimann and Adrian Peter at Mirabaud & Cie, Zurich. Both Urs and Adrian are Swiss equity specialists having spent their careers focussed on the sector.
"The performance of the fund this year is a solid endorsement of the skills of the managers and a strong validation of the strategy. We firmly believe that the type of environment we are likely to encounter going forward will be one in which the strategy continues to outperform," added Marc-Etienne.
Delman SA, is a Geneva based company specialising in the creation and the delegation of managed funds, Delman launched the DM Swiss Equity Asymmetric Fund on 30th November 2007 in partnership with Mirabaud and Cie.
"We are extremely pleased to see the fund successfully navigate its way through one of the most challenging environments for investors in living memory." Marc-Etienne Rouge, partner at Delman SA said, "Launching a new fund is a difficult task at the best of times, but to do so, and so successfully in this type of environment is remarkable and a credit to our entire team."
The DM Swiss Equity Asymmetric Fund employs a conservative long/short fundamental stock picking strategy to the Swiss equity market and is co-managed by Urs Heinimann and Adrian Peter at Mirabaud & Cie, Zurich. Both Urs and Adrian are Swiss equity specialists having spent their careers focussed on the sector.
"The performance of the fund this year is a solid endorsement of the skills of the managers and a strong validation of the strategy. We firmly believe that the type of environment we are likely to encounter going forward will be one in which the strategy continues to outperform," added Marc-Etienne.
Delman SA, is a Geneva based company specialising in the creation and the delegation of managed funds, Delman launched the DM Swiss Equity Asymmetric Fund on 30th November 2007 in partnership with Mirabaud and Cie.
Alternative Investors Form Joint Venture to Expand Africa's Telecommunications Infrastructure
Satellite communications company Intelsat is launching a joint venture with a South African alternative investor group led by Convergence Partners.
The joint venture plans to finance, build and launch a new satellite, Intelsat New Dawn, featuring a payload optimized to deliver wireless back haul, broadband and television programming to the continent of Africa, it is expected to enter service in early 2011.
The group recently concluded agreements for financing of the project, which is expected to cost around $250 million. The project is to be funded approximately 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions. Pre-orders for satellite capacity currently total more than $350 million, with some contracts for up to 15 years of service on the satellite.
"Today marks an important milestone in the development of Africa's infrastructure," Andile Ngcaba, Chairman of Convergence Partners said, "The New Dawn joint venture, with its optimized satellite and African-led financing, represents a solution for Africa by Africa. Over the course of this satellites life, it will provide world-class connectivity, allowing businesses to grow and rural communities to connect. Convergence Partners believes that investments in African projects of this nature can offer superior returns while also accelerating the socio-economic development of the continent."
The joint venture plans to finance, build and launch a new satellite, Intelsat New Dawn, featuring a payload optimized to deliver wireless back haul, broadband and television programming to the continent of Africa, it is expected to enter service in early 2011.
The group recently concluded agreements for financing of the project, which is expected to cost around $250 million. The project is to be funded approximately 15% with equity and 85% with debt, the debt being in the form of non-recourse project financing provided by African institutions. Pre-orders for satellite capacity currently total more than $350 million, with some contracts for up to 15 years of service on the satellite.
"Today marks an important milestone in the development of Africa's infrastructure," Andile Ngcaba, Chairman of Convergence Partners said, "The New Dawn joint venture, with its optimized satellite and African-led financing, represents a solution for Africa by Africa. Over the course of this satellites life, it will provide world-class connectivity, allowing businesses to grow and rural communities to connect. Convergence Partners believes that investments in African projects of this nature can offer superior returns while also accelerating the socio-economic development of the continent."
Hedge Fund Trian Partners to Hold Over 50 Million Fast Food Shares
Hedge fund Trian Partners said that they will buy about 49.4 million shares of fast-food operator Wendy's/Arby's Group for $4.15 per share, or about $205 million.
The hedge fund and their affiliates now own about 21.6% of Wendy's/Arby's, or 52.1 million shares, up from its previous 11.1% stake. In November, Trian Fund Management L.P., led by billionaire investor Nelson Peltz, Peter W. May and Edward P. Garden, said it would buy shares of the fast-food restaurant business for about $4.15 per share.
The deal was subject to certain conditions, including that there would not be a decline of more than 10% in the Dow Jones Industrial average or the S&P 500 index after Nov. 5. Another condition was that Wendy's/Arby's shares would not lose 10% of their value.
Triarc Cos. Inc., which operates Arby's and was run by billionaire investor Nelson Peltz, bought Wendy's in a deal that closed in September.
The hedge fund and their affiliates now own about 21.6% of Wendy's/Arby's, or 52.1 million shares, up from its previous 11.1% stake. In November, Trian Fund Management L.P., led by billionaire investor Nelson Peltz, Peter W. May and Edward P. Garden, said it would buy shares of the fast-food restaurant business for about $4.15 per share.
The deal was subject to certain conditions, including that there would not be a decline of more than 10% in the Dow Jones Industrial average or the S&P 500 index after Nov. 5. Another condition was that Wendy's/Arby's shares would not lose 10% of their value.
Triarc Cos. Inc., which operates Arby's and was run by billionaire investor Nelson Peltz, bought Wendy's in a deal that closed in September.
8 Dec 2008
Oxford Funding adds $40 Million in New Properties to its Hedge Fund
Oxford Funding Corp. has signed a letter of intent to acquire $40 million in new properties into its hedge fund, The Oxford Opportunistic Mortgage Fund, Ltd.
The assets are being acquired from ARCOA Capital Partners, LP, a Houston-based investment company. Larry Ramming, Managing Partner of ARCOA, stated, "We expect Oxford to manage and maximize these assets for us as the economy turns around. This should be a win-win for both our investors and Oxford's shareholders."
Oxford plans to manage this portfolio of properties to maturity or sale. CEO Ron Redd said, "We expect this to be the first step in a series of profitable asset acquisitions over the next several months. We have demonstrated our ability to help Americans stay in their homes and protect equity values while making attractive returns for our company," Redd added. "This is a big step forward in our plan to build value for our shareholders by acquiring assets at attractive values and managing them to realize profits," he concluded.
Oxford Funding is an asset resolution company, engaging in the purchase and management of bulk mortgage loan portfolios in the United States. It buys loan portfolios secured by real estate on a wholesale basis at discounts to face value, and resells the assets on a retail basis with margins. The company acquires mortgage portfolios from banks, mortgage companies, and lenders; restructures and services the loans; and then re-packages the loans for resale. It also acquires performing, under-performing, and non-performing loans.
The assets are being acquired from ARCOA Capital Partners, LP, a Houston-based investment company. Larry Ramming, Managing Partner of ARCOA, stated, "We expect Oxford to manage and maximize these assets for us as the economy turns around. This should be a win-win for both our investors and Oxford's shareholders."
Oxford plans to manage this portfolio of properties to maturity or sale. CEO Ron Redd said, "We expect this to be the first step in a series of profitable asset acquisitions over the next several months. We have demonstrated our ability to help Americans stay in their homes and protect equity values while making attractive returns for our company," Redd added. "This is a big step forward in our plan to build value for our shareholders by acquiring assets at attractive values and managing them to realize profits," he concluded.
Oxford Funding is an asset resolution company, engaging in the purchase and management of bulk mortgage loan portfolios in the United States. It buys loan portfolios secured by real estate on a wholesale basis at discounts to face value, and resells the assets on a retail basis with margins. The company acquires mortgage portfolios from banks, mortgage companies, and lenders; restructures and services the loans; and then re-packages the loans for resale. It also acquires performing, under-performing, and non-performing loans.
Canada's Hedge Funds Care Group Raise $150K for Kids
Canada's hedge fund industry gathered in November to raise $150,000 in support of Hedge Funds Care Canada (HFCC), dedicated exclusively to the treatment and prevention of child abuse and neglect.
"The Canadian hedge fund industry is particularly devoted to philanthropic causes, and this cause resonates, even more so in these difficult economic times," said Corey Goldman, President and Director of Hedge Funds Care Canada. "Hard times bring stress, and stress causes pain but there is no reason that any child should be exposed to physical or psychological trauma, maltreatment or neglect."
HFCC is part of a larger alliance of hedge fund industry professionals that comprise New York-based Hedge Funds Care, including prime brokers, attorneys, accountants, information providers, investors and managers. They have raised approximately $31 million through annual benefits in Toronto, New York, San Francisco, Chicago, Atlanta, Boston, Denver, London and the Cayman Islands.
"The Canadian hedge fund industry is particularly devoted to philanthropic causes, and this cause resonates, even more so in these difficult economic times," said Corey Goldman, President and Director of Hedge Funds Care Canada. "Hard times bring stress, and stress causes pain but there is no reason that any child should be exposed to physical or psychological trauma, maltreatment or neglect."
HFCC is part of a larger alliance of hedge fund industry professionals that comprise New York-based Hedge Funds Care, including prime brokers, attorneys, accountants, information providers, investors and managers. They have raised approximately $31 million through annual benefits in Toronto, New York, San Francisco, Chicago, Atlanta, Boston, Denver, London and the Cayman Islands.
Experts Discuss Hedge Funds at "Fighting the Tape" Seminar
Top financial industry leaders and more than 200 attendees gathered in New York late last week discuss the volatile hedge fund market and provide insights on distressed funds.
Sponsored by global offshore law firm Walkers, the "Fighting the Tape" seminar included a wide variety of speakers offered a comprehensive look at the changes in the market over the past year, as well as predictions for what the alternative investment funds industry can expect in the months ahead.
The experts anticipate a new era of hedge fund regulation, greater flexibility and versatility in hedge fund offering documents, broader discretion for fund managers, and continued growth in many of the world's key economies such as China, India, Russia, Brazil, the Middle East, and South Korea.
Investment manager George Hall, founder and president of The Clinton Group gave his personal views on the financial crisis and what the market might see under President-elect Barack Obama. While he felt it was too early to say how the "Obama factor" might influence the hedge fund industry, Mr. Hall said that he hoped the new President would make good choices when selecting his Treasury Secretary and a leader for the SEC.
"The true impact of the US credit crisis will not be tangible for many months to come," Yolanda McCoy, head of the Investments and Securities Division at the Cayman Islands Monetary Authority (CIMA) said, although she was able to confirm that to date they were aware of a total of 340 Cayman funds that had been impacted by the problems with Lehman Brothers, Merrill Lynch, and AIG, with more than 200 of those affected by issues with Lehman.
Professor Jeffrey Rosensweig, director of the Global Perspectives Program at Goizueta Business School at Emory University, closed the seminar with insights into the investment opportunities presented by this current stage in the cycle, shifting the focus from New York and London to emerging markets such as Brazil, Russia, China, the Middle East and India.
"The world adds 100 people every 42 seconds," Professor Rosensweig said, "and 98% of that population growth is in the emerging markets." Pointing to the expectation of long-term continued economic expansion in these regions, Professor Rosensweig said this massive population growth, combined with a move out of poverty in these regions, presents real future opportunities for investors.
Sponsored by global offshore law firm Walkers, the "Fighting the Tape" seminar included a wide variety of speakers offered a comprehensive look at the changes in the market over the past year, as well as predictions for what the alternative investment funds industry can expect in the months ahead.
The experts anticipate a new era of hedge fund regulation, greater flexibility and versatility in hedge fund offering documents, broader discretion for fund managers, and continued growth in many of the world's key economies such as China, India, Russia, Brazil, the Middle East, and South Korea.
Investment manager George Hall, founder and president of The Clinton Group gave his personal views on the financial crisis and what the market might see under President-elect Barack Obama. While he felt it was too early to say how the "Obama factor" might influence the hedge fund industry, Mr. Hall said that he hoped the new President would make good choices when selecting his Treasury Secretary and a leader for the SEC.
"The true impact of the US credit crisis will not be tangible for many months to come," Yolanda McCoy, head of the Investments and Securities Division at the Cayman Islands Monetary Authority (CIMA) said, although she was able to confirm that to date they were aware of a total of 340 Cayman funds that had been impacted by the problems with Lehman Brothers, Merrill Lynch, and AIG, with more than 200 of those affected by issues with Lehman.
Professor Jeffrey Rosensweig, director of the Global Perspectives Program at Goizueta Business School at Emory University, closed the seminar with insights into the investment opportunities presented by this current stage in the cycle, shifting the focus from New York and London to emerging markets such as Brazil, Russia, China, the Middle East and India.
"The world adds 100 people every 42 seconds," Professor Rosensweig said, "and 98% of that population growth is in the emerging markets." Pointing to the expectation of long-term continued economic expansion in these regions, Professor Rosensweig said this massive population growth, combined with a move out of poverty in these regions, presents real future opportunities for investors.
5 Dec 2008
PureWave Secures 12 Million with help of 4 Venture Funds
PureWave Networks Inc. has raised $12 million in Series B funding. ATA Ventures and Leapfrog Ventures were joined by venture funds Allegis Capital and Benhamou Global Ventures.
Two new funds, ATA Ventures and Leapfrog Ventures, have joined PureWave’s existing investors in completing the funding round. The Series B funding will allow PureWave to commercially introduce its advance beam forming WiMAX base stations in North America, the APAC region and other selected markets and to expand its operations.
”PureWave’s strong balance sheet in this challenging economic environment, together with our leading edge product offering, will be the foundation of our future growth,” said Gideon Ben-Efraim, PureWave’s CEO and Chairman. “WiMAX and LTE infrastructure are the big growth opportunity in the mobile infrastructure market today and we are positioning the company to be a major player in this space.”
PureWave, a Silicon Valley Company, is the world’s leading supplier of high-performance adaptive beamforming 4G base-stations currently supporting standard WiMAX devices, enabling delivery of quadruple-play services (Voice, Video, Data, Mobile).
Leapfrog is an early stage technology investor based in Menlo Park, CA. The principals have collectively been involved in over 60 venture investments. Leapfrog is currently investing from its second fund, which commenced its activity in 2005.
Two new funds, ATA Ventures and Leapfrog Ventures, have joined PureWave’s existing investors in completing the funding round. The Series B funding will allow PureWave to commercially introduce its advance beam forming WiMAX base stations in North America, the APAC region and other selected markets and to expand its operations.
”PureWave’s strong balance sheet in this challenging economic environment, together with our leading edge product offering, will be the foundation of our future growth,” said Gideon Ben-Efraim, PureWave’s CEO and Chairman. “WiMAX and LTE infrastructure are the big growth opportunity in the mobile infrastructure market today and we are positioning the company to be a major player in this space.”
PureWave, a Silicon Valley Company, is the world’s leading supplier of high-performance adaptive beamforming 4G base-stations currently supporting standard WiMAX devices, enabling delivery of quadruple-play services (Voice, Video, Data, Mobile).
Leapfrog is an early stage technology investor based in Menlo Park, CA. The principals have collectively been involved in over 60 venture investments. Leapfrog is currently investing from its second fund, which commenced its activity in 2005.
4 Dec 2008
Mark Thompson Hired by CME as Hedge Fund Director
Derivatives exchange group CME has hired Mark H. Thompson Jr. as Director of hedge funds. Thompson, 37, will be responsible for serving as the company's primary liaison to the East Coast hedge fund community and developing hedge fund business within the region across all CME Group product lines. He will be based out of New York and will report to Tina Lemieux, Managing Director of hedge funds and broker services.
Thompson joins CME Group from UBS Securities LLC where he most recently served as a member of the macro/cross asset sales team. In this role, he was responsible for serving as the single point of contact for macro, long/short, transition and asset managers for all derivatives and cash products and performing cross-asset idea generation and research for clients. He also served as a member of the bank's global futures and options sales team. His background also includes operations and analyst roles with Moore Capital Management and Banque Paribas.
CME Group is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York.
Thompson joins CME Group from UBS Securities LLC where he most recently served as a member of the macro/cross asset sales team. In this role, he was responsible for serving as the single point of contact for macro, long/short, transition and asset managers for all derivatives and cash products and performing cross-asset idea generation and research for clients. He also served as a member of the bank's global futures and options sales team. His background also includes operations and analyst roles with Moore Capital Management and Banque Paribas.
CME Group is the world's largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York.
3 Dec 2008
Rival Hedge Fund Avoids Steep Loses through Downside Protection Strategies
Canadian hedge fund manager, Rival Capital Management launched the Rival North American Growth Fund and since 2007 it has gained more than 80 accredited investors and $15 million in assets under management (AUM).
Headquartered in Winnipeg, Manitoba, the hedge fund is focused on small/midcap Canadian as well as US growth companies, with up to $2 billion Canadian market cap and $10 billion US. Also under development by Rival Capital Management is the Rival North American RRSP Growth Fund, which will buy units in the underlying Rival.
The fund uses a combination of a technical and a fundamental approach, using a proprietary filtering routine that accesses a database of 8,000 US companies and 2,000 CDN companies tracking approximately 2,000 variables, focusing on leading industries and stocks within those industries. The fund also focuses on protecting downside risk through strategies to limit leverage and limit losses.
While the S&P/TSX SmallCap index is down 43.23% year-to-date (to Oct 31, 2008 ) the Rival North American Growth Fund has used its proprietary risk management strategies to keep its loses to a minimum (-9.82 %) during this unprecedented period of volatility and downward pressured markets. When asked about conditions that may cause the hedge fund to sell, CIO Tony Warzel said, "We normally look for a change or reversal in the underlying attributes that caused us to originally take a position in a stock. For example, if the momentum is slowing we can usually directly attribute the change in sentiment in one or more of our predefined triggers such as sales or earnings. The sell message can be very clear and come very quickly which is why we monitor our portfolio continuously and very closely."
"Because we keep our portfolio small we know each company well and we pay close attention to their chart action," Warzel said when asked about risk management, "We also have proprietary risk mitigation techniques and tools available to us. If warranted, we will use limits on the way up and the way down. In addition, we limit the size of each holding and will use shorts to counteract what we see as an overweight in a particular area. Once we generate alpha, we like to protect it. Therefore if we make a bad trade we work to exit quickly and minimize the downside. We have a 10% rule where if we are down 10% on an initial trade we sell out the position. Yes you can occasionally get whipsawed but that one rule alone has saved us an immense amount of pain this year. In addition, we do not add to losing positions, based on our style averaging down is something we avoid; given the market action this year that too has worked well for us." Warzel concluded.
Warzel has experience as a Small and MidCap Equity Manager, managing AUM in excess of $1.3 billion for a variety of funds.
Headquartered in Winnipeg, Manitoba, the hedge fund is focused on small/midcap Canadian as well as US growth companies, with up to $2 billion Canadian market cap and $10 billion US. Also under development by Rival Capital Management is the Rival North American RRSP Growth Fund, which will buy units in the underlying Rival.
The fund uses a combination of a technical and a fundamental approach, using a proprietary filtering routine that accesses a database of 8,000 US companies and 2,000 CDN companies tracking approximately 2,000 variables, focusing on leading industries and stocks within those industries. The fund also focuses on protecting downside risk through strategies to limit leverage and limit losses.
While the S&P/TSX SmallCap index is down 43.23% year-to-date (to Oct 31, 2008 ) the Rival North American Growth Fund has used its proprietary risk management strategies to keep its loses to a minimum (-9.82 %) during this unprecedented period of volatility and downward pressured markets. When asked about conditions that may cause the hedge fund to sell, CIO Tony Warzel said, "We normally look for a change or reversal in the underlying attributes that caused us to originally take a position in a stock. For example, if the momentum is slowing we can usually directly attribute the change in sentiment in one or more of our predefined triggers such as sales or earnings. The sell message can be very clear and come very quickly which is why we monitor our portfolio continuously and very closely."
"Because we keep our portfolio small we know each company well and we pay close attention to their chart action," Warzel said when asked about risk management, "We also have proprietary risk mitigation techniques and tools available to us. If warranted, we will use limits on the way up and the way down. In addition, we limit the size of each holding and will use shorts to counteract what we see as an overweight in a particular area. Once we generate alpha, we like to protect it. Therefore if we make a bad trade we work to exit quickly and minimize the downside. We have a 10% rule where if we are down 10% on an initial trade we sell out the position. Yes you can occasionally get whipsawed but that one rule alone has saved us an immense amount of pain this year. In addition, we do not add to losing positions, based on our style averaging down is something we avoid; given the market action this year that too has worked well for us." Warzel concluded.
Warzel has experience as a Small and MidCap Equity Manager, managing AUM in excess of $1.3 billion for a variety of funds.
2 Dec 2008
Redemptions Halted by one of the Worlds Largest Hedge Funds
One of the world's largest hedge funds has temporarily halted redemptions according to reports. Tudor Investment Corp's flagship portfolio, has been reported to have halted redemptions so they can segregate difficult-to-sell assets in the fund from those they can offload more easily.
Bloomberg reports that the move was made by the the fund to avoid having to raise cash in falling markets to pay out withdrawing investors. Tudor Investment Corp, the hedge fund manager established by Paul Tudor Jones, was also reported by Bloomberg as having temporarily suspended redemptions from the portfolio.
Tudor is reportedly allotting to the investors in Tudor BVI Global shares in Legacy, with a view to selling the assets in Legacy over time to hand money back to those clients.
Founded in 1980 by Paul Tudor Jones II, the firm currently manages $15.4 billion. The firm's investment strategies include global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems.
Bloomberg reports that the move was made by the the fund to avoid having to raise cash in falling markets to pay out withdrawing investors. Tudor Investment Corp, the hedge fund manager established by Paul Tudor Jones, was also reported by Bloomberg as having temporarily suspended redemptions from the portfolio.
Tudor is reportedly allotting to the investors in Tudor BVI Global shares in Legacy, with a view to selling the assets in Legacy over time to hand money back to those clients.
Founded in 1980 by Paul Tudor Jones II, the firm currently manages $15.4 billion. The firm's investment strategies include global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems.
1 Dec 2008
Administration plans to issue 20 highly contentious rules in last weeks
With the economy tumbling and American troops fighting in Iraq and Afghanistan, President Bush has promised to cooperate with Obama to make the transition "as smooth as possible." But that has not stopped his administration from trying, in its final days, to cement in place a diverse array of new regulations.
A Labor Department proposal that would make it much harder for the government to regulate toxic substances and hazardous chemicals to which workers are exposed on the job is one of about 20 highly contentious rules the Bush administration is planning to issue in its final weeks. The rules deal with issues as diverse as abortion, auto safety and the environment. One rule would make it easier to build power plants near national parks and wilderness areas. Another would reduce the role of federal wildlife scientists in deciding whether dams, highways and other projects pose a threat to endangered species.
Obama and his advisers have already signaled their wariness of last-minute efforts by the Bush administration to embed its policies into the Code of Federal Regulations, a collection of rules having the force of law. The advisers have also said that Mr. Obama plans to look at a number of executive orders issued by Mr. Bush.
A new president can unilaterally reverse executive orders issued by his predecessors, as Bush and President Bill Clinton did in selected cases. But it is much more difficult for a new president to revoke or alter final regulations put in place by a predecessor. A new administration must solicit public comment and supply "a reasoned analysis" for such changes, as if it were issuing a new rule, the Supreme Court has said.
Excerpt from; Eleventh-Hour Rush to Enact a Rule That Obama Fought
A Labor Department proposal that would make it much harder for the government to regulate toxic substances and hazardous chemicals to which workers are exposed on the job is one of about 20 highly contentious rules the Bush administration is planning to issue in its final weeks. The rules deal with issues as diverse as abortion, auto safety and the environment. One rule would make it easier to build power plants near national parks and wilderness areas. Another would reduce the role of federal wildlife scientists in deciding whether dams, highways and other projects pose a threat to endangered species.
Obama and his advisers have already signaled their wariness of last-minute efforts by the Bush administration to embed its policies into the Code of Federal Regulations, a collection of rules having the force of law. The advisers have also said that Mr. Obama plans to look at a number of executive orders issued by Mr. Bush.
A new president can unilaterally reverse executive orders issued by his predecessors, as Bush and President Bill Clinton did in selected cases. But it is much more difficult for a new president to revoke or alter final regulations put in place by a predecessor. A new administration must solicit public comment and supply "a reasoned analysis" for such changes, as if it were issuing a new rule, the Supreme Court has said.
Excerpt from; Eleventh-Hour Rush to Enact a Rule That Obama Fought
Job Search Digest Research Reveals Hedge Fund Employees Knew About Market Shift Ahead of Time
A survey conducted by Job Search Digest, publishers of Hedge Fund Jobs Digest, revealed a shift in the hedge fund industry. Given the current state of the market, the results tell an interesting story and show that key players in hedge fund careers knew trouble was on the horizon earlier this year.
Some findings of interest are that despite no significant increase in compensation, there was a substantial increase in satisfaction with hedge fund compensation. This indicates that well before Wall Street's meltdown, hedge fund employees knew the market had shifted. This year's report reveals that 42% of hedge fund employees are happy with their current level of compensation – up from a mere 25% last year.
The survey also found that pay is not correlating with fund performance. When the fund performs well, employees are paid well – most of the time. The hedge funds reporting this year performed well with the majority reporting more than 10% return (and many reporting over 25% return). firms reporting flat performance (that is, zero return) had the highest average pay.
Although the hedge fund industry is often referred to as a meritocracy, many respondents to the survey indicated their bonus is disconnected from their individual performance and, instead, based on overall firm performance.
Job Searcg Digest also found that people are attracted to hedge fund careers because of a huge potential upside. Last year, dissatisfaction with compensation was primarily driven by the desire for greater upside. Now, with all the nervousness in the market, many hedge fund employees feel lucky simply to still be working in the industry.
The full report comes out at Job Search Digest on December 3rd.
Some findings of interest are that despite no significant increase in compensation, there was a substantial increase in satisfaction with hedge fund compensation. This indicates that well before Wall Street's meltdown, hedge fund employees knew the market had shifted. This year's report reveals that 42% of hedge fund employees are happy with their current level of compensation – up from a mere 25% last year.
The survey also found that pay is not correlating with fund performance. When the fund performs well, employees are paid well – most of the time. The hedge funds reporting this year performed well with the majority reporting more than 10% return (and many reporting over 25% return). firms reporting flat performance (that is, zero return) had the highest average pay.
Although the hedge fund industry is often referred to as a meritocracy, many respondents to the survey indicated their bonus is disconnected from their individual performance and, instead, based on overall firm performance.
Job Searcg Digest also found that people are attracted to hedge fund careers because of a huge potential upside. Last year, dissatisfaction with compensation was primarily driven by the desire for greater upside. Now, with all the nervousness in the market, many hedge fund employees feel lucky simply to still be working in the industry.
The full report comes out at Job Search Digest on December 3rd.
Green Hedge Fund Directory Launched By EHFC
The Energy Hedge Fund Center (EHFC) announced that it has added a 'green' hedge fund directory to its product inventory. EHFC's Directory of Energy Hedge Funds was launched four years ago, but with the interest in 'green' hedge funds, the company has created a new green directory for investors. The directory includes carbon, renewable, cleantech, forestry, water and weather derivative funds.
"We decided that now was the time for a standalone green directory and will be offering it for prepublication in January 2009," said Peter Fusaro, co-principal of the EHFC. "The market is now large enough and growing to warrant this service with over 100 green hedge funds."
"EHFC has received innumerable requests for such a product this last 12-months or so as investor appetite for environmental and alternative energy has increased," reports Dr. Gary M. Vasey, Co-Principal, EHFC. "As a result we have complied with that demand and have now added a new directory that focuses on just the 'green' hedge funds."
"We decided that now was the time for a standalone green directory and will be offering it for prepublication in January 2009," said Peter Fusaro, co-principal of the EHFC. "The market is now large enough and growing to warrant this service with over 100 green hedge funds."
"EHFC has received innumerable requests for such a product this last 12-months or so as investor appetite for environmental and alternative energy has increased," reports Dr. Gary M. Vasey, Co-Principal, EHFC. "As a result we have complied with that demand and have now added a new directory that focuses on just the 'green' hedge funds."
27 Nov 2008
100 Women in Hedge Funds Raise Funds for Cancer Care and Prevention
Leaders across the hedge fund industry gathered together and raised more than $1.7 million at the 100 Women in Hedge Funds 2008 New York Charity Gala at Cipriani in New York City last Wednesday night.
"We’re pleased that 100 Women in Hedge Funds has been able to support Dr. Freeman and the Center’s extraordinary programs,"Mimi Drake, a Director of the Board of 100 Women in Hedge Funds said, "Through the hard work, dedication and perseverance of the Gala committee, led by Gala Chair, Kristin Mott, we’re now able to help support these critical health initiatives in the New York, Chicago and San Francisco regions, three regions where our own 100 Women in Hedge Funds’ membership is well represented."
All proceeds from the evening will go to support the Ralph Lauren Center to expand its existing Screening and Patient Navigation Programs in the areas of breast, cervical and colon cancer and leverage its expertise to establish two satellite Patient Navigation Programs in medically underserved communities in Chicago, Illinois, and in San Francisco/Oakland, California.
The Patient Navigation Program was pioneered over seventeen years ago in Harlem by the Center’s founder and president, Harold P. Freeman, MD. A cancer surgeon in Harlem for more than 40 years, Dr. Freeman is a nationally recognized authority on the interrelationship of race, poverty and cancer. He served as the Chair of the US President’s Cancer Panel for 11 years under Presidents Bush and Clinton, and is a past President of the American Cancer Society.
Dr. Freeman said, "We know that poor and uninsured Americans are much more likely to die of cancer. Responding to this challenge and despite a severe economic downturn, 100 Women in Hedge Funds, in one festive evening at Cipriani's, raised more than $1.7 million to support the life saving Patient Navigation programs of Ralph Lauren Center for Cancer Care and Prevention. The funds will be used to promote timely access to diagnosis and treatment of cancer for underserved populations in Harlem, NY, Chicago and San Francisco. Many lives will be saved."
Sonia Gardner, Effecting Change Award Honoree, said "I am honored and humbled to be in the same company as so many past honorees and I want to thank the Board of Directors of 100 Women in Hedge Funds for this wonderful honor. It’s a testament to everyone who supported the event that, despite these difficult times, they all made the effort to support such a meaningful cause as the Ralph Lauren Center for Cancer Care and Prevention. In a business like ours, which is literally defined by volatility and risk, I’ve found it to be essential, irrespective of what is going on around you, to keep things in perspective and to always remain calm and focused. While this obviously is being put to the test in these unprecedented times, it’s an important principle whose power cannot be overstated."
Generous contributions were made by the 2008 Chairs, Avenue Capital Group and Ricks & Ray Partners LLC, and 2008 Vice Chairs, Blue Ridge Foundation, New York, Eton Park, Moore Capital Management and an anonymous benefactor -- as well as other corporations and individuals who generously supported the event.
In addition to last week’s New York Gala, 100 Women in Hedge Funds also hosted a successful Charity Gala in London and fundraiser in Geneva in September this year. These charity events raised over £630,000 ($1.2 million) for Wellbeing of Women, a UK charity focused on women’s health issues. Wellbeing of Women was one of two charities selected by the 2008 Lord Mayor’s appeal, and through the generosity of the industry and volunteer efforts of its members, 100 Women in Hedge Funds’ contribution represented the largest single donation to the Appeal this year.
"We’re pleased that 100 Women in Hedge Funds has been able to support Dr. Freeman and the Center’s extraordinary programs,"Mimi Drake, a Director of the Board of 100 Women in Hedge Funds said, "Through the hard work, dedication and perseverance of the Gala committee, led by Gala Chair, Kristin Mott, we’re now able to help support these critical health initiatives in the New York, Chicago and San Francisco regions, three regions where our own 100 Women in Hedge Funds’ membership is well represented."
All proceeds from the evening will go to support the Ralph Lauren Center to expand its existing Screening and Patient Navigation Programs in the areas of breast, cervical and colon cancer and leverage its expertise to establish two satellite Patient Navigation Programs in medically underserved communities in Chicago, Illinois, and in San Francisco/Oakland, California.
The Patient Navigation Program was pioneered over seventeen years ago in Harlem by the Center’s founder and president, Harold P. Freeman, MD. A cancer surgeon in Harlem for more than 40 years, Dr. Freeman is a nationally recognized authority on the interrelationship of race, poverty and cancer. He served as the Chair of the US President’s Cancer Panel for 11 years under Presidents Bush and Clinton, and is a past President of the American Cancer Society.
Dr. Freeman said, "We know that poor and uninsured Americans are much more likely to die of cancer. Responding to this challenge and despite a severe economic downturn, 100 Women in Hedge Funds, in one festive evening at Cipriani's, raised more than $1.7 million to support the life saving Patient Navigation programs of Ralph Lauren Center for Cancer Care and Prevention. The funds will be used to promote timely access to diagnosis and treatment of cancer for underserved populations in Harlem, NY, Chicago and San Francisco. Many lives will be saved."
Sonia Gardner, Effecting Change Award Honoree, said "I am honored and humbled to be in the same company as so many past honorees and I want to thank the Board of Directors of 100 Women in Hedge Funds for this wonderful honor. It’s a testament to everyone who supported the event that, despite these difficult times, they all made the effort to support such a meaningful cause as the Ralph Lauren Center for Cancer Care and Prevention. In a business like ours, which is literally defined by volatility and risk, I’ve found it to be essential, irrespective of what is going on around you, to keep things in perspective and to always remain calm and focused. While this obviously is being put to the test in these unprecedented times, it’s an important principle whose power cannot be overstated."
Generous contributions were made by the 2008 Chairs, Avenue Capital Group and Ricks & Ray Partners LLC, and 2008 Vice Chairs, Blue Ridge Foundation, New York, Eton Park, Moore Capital Management and an anonymous benefactor -- as well as other corporations and individuals who generously supported the event.
In addition to last week’s New York Gala, 100 Women in Hedge Funds also hosted a successful Charity Gala in London and fundraiser in Geneva in September this year. These charity events raised over £630,000 ($1.2 million) for Wellbeing of Women, a UK charity focused on women’s health issues. Wellbeing of Women was one of two charities selected by the 2008 Lord Mayor’s appeal, and through the generosity of the industry and volunteer efforts of its members, 100 Women in Hedge Funds’ contribution represented the largest single donation to the Appeal this year.
26 Nov 2008
FoHF Lighthouse Expands Through Integration with GlobeOp
Fund of hedge funds Lighthouse Partners announced that it is expanding its partnership with GlobeOp Financial Services to a full-service fund administration relationship.
More than 20 professionals from the Lighthouse operations team in Florida will work jointly with approximately 85 GlobeOp counterparts in Connecticut, New York State and Mumbai, India to deliver “around the clock” post-trade processing for more than 60 managed accounts and five funds.
"During the past three and half years Lighthouse has strategically converted from the standard fund of fund model to a managed account model that we believe will be the future of hedge fund investing," said Sean McGould, Lighthouse president and co-chief investment officer. "Our team has developed strong portfolio and risk management skills over the last 15 years. Combining that expertise with managed account investing is already providing the increased transparency and risk reporting required by institutional investors."
Rob Swan added that the long-term, continued growth of the Lighthouse program required an established partner to effectively handle post-trade processing, administration and reporting. "Underlying Lighthouse managers already greatly benefit from the integration with GlobeOp’s comprehensive, web-based middle-and back-office trade processing services. This partnership also provides our fund managers and investors with the increased independence, timeliness and transparency they require."
Founded in June 1999, Lighthouse Partners is a fund of hedge funds with more than $6 billion in assets under management, over 65 employees and offices in Palm Beach Gardens, Chicago, New York, London and Hong Kong. Lighthouse manages multi-strategy fund of funds along with a stable of focused funds across Credit, Global Equity Long/Short, and Managed Futures. Currently, Lighthouse also has over 60 managed accounts and five funds that are structured wholly in managed accounts.
More than 20 professionals from the Lighthouse operations team in Florida will work jointly with approximately 85 GlobeOp counterparts in Connecticut, New York State and Mumbai, India to deliver “around the clock” post-trade processing for more than 60 managed accounts and five funds.
"During the past three and half years Lighthouse has strategically converted from the standard fund of fund model to a managed account model that we believe will be the future of hedge fund investing," said Sean McGould, Lighthouse president and co-chief investment officer. "Our team has developed strong portfolio and risk management skills over the last 15 years. Combining that expertise with managed account investing is already providing the increased transparency and risk reporting required by institutional investors."
Rob Swan added that the long-term, continued growth of the Lighthouse program required an established partner to effectively handle post-trade processing, administration and reporting. "Underlying Lighthouse managers already greatly benefit from the integration with GlobeOp’s comprehensive, web-based middle-and back-office trade processing services. This partnership also provides our fund managers and investors with the increased independence, timeliness and transparency they require."
Founded in June 1999, Lighthouse Partners is a fund of hedge funds with more than $6 billion in assets under management, over 65 employees and offices in Palm Beach Gardens, Chicago, New York, London and Hong Kong. Lighthouse manages multi-strategy fund of funds along with a stable of focused funds across Credit, Global Equity Long/Short, and Managed Futures. Currently, Lighthouse also has over 60 managed accounts and five funds that are structured wholly in managed accounts.
25 Nov 2008
Hedge Fund Group Gottex Opens Office in Dubai, Hires Ex-Lehman Manager
Independent alternative asset and hedge fund management group, Gottex Fund Management Holdings Limited, announced the opening of an office in Dubai to capitalise on the growth opportunities in the region.
In addition, Gottex appointed Wassim Nasrallah as Managing Director responsible for sales and marketing in the Middle Eastern region. With significant business lines already in the Middle East, Gottex says the region is one of its core growth areas over the coming years. The region and office will be managed by Hashem Arouzi, Managing Director and a founding partner of Gottex. Wassim Nasrallah, who recently joined Gottex from Lehman Brothers, will work alongside Hashem Arouzi in Dubai and co-manage the region.
"We are very pleased to announce the opening of our new Dubai office which will enable us to better service and expand our Middle Eastern customer base," Joachim Gottschalk, Chairman and CEO of Gottex, said, "Similarly, we welcome Wassim to Gottex, who, with his extensive experience in the Gulf region, will be essential to our growth plans in the Middle East."
Before joining Gottex, Wassim Nasrallah worked for Lehman Brothers International, where he was Head of Generalist Sales in Dubai for Capital Markets and Investment Management products. While at Lehman he was involved in Private Investment Management in Boston, New York and Dubai.
Incorporated in Guernsey, Gottex provides investment management services to a diversified range of hedge funds and funds of hedge funds. The Gottex group also structures and manages specialised fund of hedge funds, managed accounts, real asset funds and provides related investment advisory services. As of 30 September 2008, Gottex had $13.5 billion in assets under management (AUM).
In addition, Gottex appointed Wassim Nasrallah as Managing Director responsible for sales and marketing in the Middle Eastern region. With significant business lines already in the Middle East, Gottex says the region is one of its core growth areas over the coming years. The region and office will be managed by Hashem Arouzi, Managing Director and a founding partner of Gottex. Wassim Nasrallah, who recently joined Gottex from Lehman Brothers, will work alongside Hashem Arouzi in Dubai and co-manage the region.
"We are very pleased to announce the opening of our new Dubai office which will enable us to better service and expand our Middle Eastern customer base," Joachim Gottschalk, Chairman and CEO of Gottex, said, "Similarly, we welcome Wassim to Gottex, who, with his extensive experience in the Gulf region, will be essential to our growth plans in the Middle East."
Before joining Gottex, Wassim Nasrallah worked for Lehman Brothers International, where he was Head of Generalist Sales in Dubai for Capital Markets and Investment Management products. While at Lehman he was involved in Private Investment Management in Boston, New York and Dubai.
Incorporated in Guernsey, Gottex provides investment management services to a diversified range of hedge funds and funds of hedge funds. The Gottex group also structures and manages specialised fund of hedge funds, managed accounts, real asset funds and provides related investment advisory services. As of 30 September 2008, Gottex had $13.5 billion in assets under management (AUM).
New Yorker Review; Ben Bernanke and the Financial Crisis
Coming in the December 1, 2008, issue of The New Yorker, “Anatomy of the Meltdown”, John Cassidy provides a comprehensive look at the progression of the economic crisis and speaks with Ben Bernanke, the chairman of the Federal Reserve, who tells Cassidy, “I and others were mistaken early on in saying that the subprime crisis would be contained.
Bernanke, who began his tenure as Fed chairman in 2006 by upholding the hands-off free-market principles of his predecessor, Alan Greenspan, “was more concerned about inflation and unemployment, the Fed’s traditional areas of focus, than he was about the growth of mortgage securities,” Cassidy writes.
While some economists warned that a nationwide housing slump could trigger a recession, Bernanke and his colleagues thought this was unlikely. In August 2007, after trading in the mortgage-securities market had dried up, Cassidy writes, Bernanke finally “realized that the subprime crisis posed a grave threat to some of the country’s biggest financial institutions and that Greenspan-era policies were insufficient to contain it.”
He and the Fed came up with a two-part plan (later referred to as the Bernanke Doctrine): they lowered the federal funds rate and instituted novel programs to lend money directly to institutions. Dean Baker, of the Center for Economic and Policy Research, tells Cassidy, “He was behind the curve at every stage of the story. He didn’t see the housing bubble until after it burst. Until as late as this summer, he downplayed all the risks involved.”
In early 2008, the Fed was faced with the collapse of Bear Stearns, which Bernanke and Treasury Secretary Henry Paulson elected to save by helping facilitate the sale of the company to J. P. Morgan at a cut rate and absorbing its twenty-nine-billion-dollar portfolio of subprime securities. “It quickly became clear that an important precedent had been set: the Bernanke doctrine now included preventing the failure of major financial institutions,” Cassidy writes. “I think we did the right thing to try to preserve financial stability,” Bernanke tells Cassidy. “That’s our job. Yes, it’s moral-hazard-inducing, but the right way to address this question is not to let institutions fail and have a financial meltdown.”
The Bear Stearns rescue brought widespread criticism from the media, conservative economists, and other Fed officials. Bernanke was also criticized when the Fed moved to prop up Fannie Mae and Freddie Mac, as the move was seen as a poor use of taxpayer money. Cassidy writes, “Bernanke couldn’t say so publicly, but he agreed with some of the critics. For years, the Fed had warned that Fannie and Freddie were squeezing out competitors and engaging in risky mortgage-lending practices.” Yet, Cassidy notes, “despite their financial problems, Fannie and Freddie still had many powerful allies in Congress, and Bernanke was determined that the plan be approved quickly, in order to restore confidence in the markets.”
In late August, 2008, “Bernanke still believed that his finger-in-the-dike strategy was working,” Cassidy writes. “A lot can still go wrong, but at least I can see a path that will bring us out of this entire episode relatively intact,” he told a visitor to his office in August. Then, in September, Bernanke and Paulson were faced with the collapse of Lehman Brothers. “Remarkably, once the potential bidders dropped out, Bernanke and Paulson never seriously considered mounting a government rescue of Lehman,” Cassidy writes. “Bernanke and other Fed officials say that they lacked the legal authority to save the bank.” “It’s really hard for me to accept that they couldn’t have come up with something,” Baker tells Cassidy. “They’ve been doing things of dubious legal authority all year. Who would have sued them?” “At the time, a popular interpretation of Lehman Brothers’ demise was that Bernanke and Paulson had finally drawn a line in the sand,” Cassidy writes, but, less than forty-eight hours later, the Fed agreed to extend up to eighty-five billion dollars to the failing insurance giant A.I.G.
“We felt we could say that this was a well-secured loan and that we were not putting fiscal resources at risk,” a senior Fed official tells Cassidy, who notes that A.I.G. was also a much bigger and more complex firm than Lehman Brothers was. Yet the bailout of A.I.G. could not calm the markets. “The subprime virus was infecting parts of the financial system that had appeared immune to it—including the most risk-averse institutions,” Cassidy writes.
On September 17th, Bernanke asked Paulson to accompany him to Capitol Hill and make the case for a congressional bailout of the entire banking industry. “We can’t keep doing this,” Bernanke told Paulson. “Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it’s important that the Congress come in and take control of the situation.” “It was a very important step,” Bernanke tells Cassidy. “It greatly diminished the threat of a global financial meltdown. But as Hank Paulson said publicly, ‘You don’t get much credit for averting a disaster.’ ” Yet there is indication that the disaster may not have been averted. “Last week, the stock market plunged to its lowest level in eleven years, auto executives flew into Washington on their corporate jets to demand a bailout, and Wall Street analysts warned that the political vacuum between Administrations could create more turmoil,” Cassidy writes.
“Paulson’s and Bernanke’s efforts to prop up the financial system have so far had little effect on the housing slump, which is the source of the trouble. Until that problem is addressed, the financial sector will remain under great stress.”
Bernanke, who began his tenure as Fed chairman in 2006 by upholding the hands-off free-market principles of his predecessor, Alan Greenspan, “was more concerned about inflation and unemployment, the Fed’s traditional areas of focus, than he was about the growth of mortgage securities,” Cassidy writes.
While some economists warned that a nationwide housing slump could trigger a recession, Bernanke and his colleagues thought this was unlikely. In August 2007, after trading in the mortgage-securities market had dried up, Cassidy writes, Bernanke finally “realized that the subprime crisis posed a grave threat to some of the country’s biggest financial institutions and that Greenspan-era policies were insufficient to contain it.”
He and the Fed came up with a two-part plan (later referred to as the Bernanke Doctrine): they lowered the federal funds rate and instituted novel programs to lend money directly to institutions. Dean Baker, of the Center for Economic and Policy Research, tells Cassidy, “He was behind the curve at every stage of the story. He didn’t see the housing bubble until after it burst. Until as late as this summer, he downplayed all the risks involved.”
In early 2008, the Fed was faced with the collapse of Bear Stearns, which Bernanke and Treasury Secretary Henry Paulson elected to save by helping facilitate the sale of the company to J. P. Morgan at a cut rate and absorbing its twenty-nine-billion-dollar portfolio of subprime securities. “It quickly became clear that an important precedent had been set: the Bernanke doctrine now included preventing the failure of major financial institutions,” Cassidy writes. “I think we did the right thing to try to preserve financial stability,” Bernanke tells Cassidy. “That’s our job. Yes, it’s moral-hazard-inducing, but the right way to address this question is not to let institutions fail and have a financial meltdown.”
The Bear Stearns rescue brought widespread criticism from the media, conservative economists, and other Fed officials. Bernanke was also criticized when the Fed moved to prop up Fannie Mae and Freddie Mac, as the move was seen as a poor use of taxpayer money. Cassidy writes, “Bernanke couldn’t say so publicly, but he agreed with some of the critics. For years, the Fed had warned that Fannie and Freddie were squeezing out competitors and engaging in risky mortgage-lending practices.” Yet, Cassidy notes, “despite their financial problems, Fannie and Freddie still had many powerful allies in Congress, and Bernanke was determined that the plan be approved quickly, in order to restore confidence in the markets.”
In late August, 2008, “Bernanke still believed that his finger-in-the-dike strategy was working,” Cassidy writes. “A lot can still go wrong, but at least I can see a path that will bring us out of this entire episode relatively intact,” he told a visitor to his office in August. Then, in September, Bernanke and Paulson were faced with the collapse of Lehman Brothers. “Remarkably, once the potential bidders dropped out, Bernanke and Paulson never seriously considered mounting a government rescue of Lehman,” Cassidy writes. “Bernanke and other Fed officials say that they lacked the legal authority to save the bank.” “It’s really hard for me to accept that they couldn’t have come up with something,” Baker tells Cassidy. “They’ve been doing things of dubious legal authority all year. Who would have sued them?” “At the time, a popular interpretation of Lehman Brothers’ demise was that Bernanke and Paulson had finally drawn a line in the sand,” Cassidy writes, but, less than forty-eight hours later, the Fed agreed to extend up to eighty-five billion dollars to the failing insurance giant A.I.G.
“We felt we could say that this was a well-secured loan and that we were not putting fiscal resources at risk,” a senior Fed official tells Cassidy, who notes that A.I.G. was also a much bigger and more complex firm than Lehman Brothers was. Yet the bailout of A.I.G. could not calm the markets. “The subprime virus was infecting parts of the financial system that had appeared immune to it—including the most risk-averse institutions,” Cassidy writes.
On September 17th, Bernanke asked Paulson to accompany him to Capitol Hill and make the case for a congressional bailout of the entire banking industry. “We can’t keep doing this,” Bernanke told Paulson. “Both because we at the Fed don’t have the necessary resources and for reasons of democratic legitimacy, it’s important that the Congress come in and take control of the situation.” “It was a very important step,” Bernanke tells Cassidy. “It greatly diminished the threat of a global financial meltdown. But as Hank Paulson said publicly, ‘You don’t get much credit for averting a disaster.’ ” Yet there is indication that the disaster may not have been averted. “Last week, the stock market plunged to its lowest level in eleven years, auto executives flew into Washington on their corporate jets to demand a bailout, and Wall Street analysts warned that the political vacuum between Administrations could create more turmoil,” Cassidy writes.
“Paulson’s and Bernanke’s efforts to prop up the financial system have so far had little effect on the housing slump, which is the source of the trouble. Until that problem is addressed, the financial sector will remain under great stress.”
24 Nov 2008
International Regulators to Discuss Short Selling, Derivatives Regulation
Securities and Exchange Commission Chairman Christopher Cox announced a meeting of the International Organization of Securities Commissions (IOSCO) Technical Committee today, Monday, November 24 by teleconference to discuss urgent regulatory issues in the ongoing credit crisis.
"In addressing turbulent market conditions, it is essential not only that regulators act against securities law violations, including abusive short selling, but also that there be close coordination among international markets to avoid regulatory gaps and unintended consequences," said Chairman Cox. "This high-level coordination among international regulators will allow us to review the steps we have taken thus far and ensure that our ongoing and future actions are effective and mutually reinforcing."
The Technical Committee meeting will consider Short Selling and the effectiveness of recent regulatory responses in reducing manipulative short selling without stifling legitimate short selling activity, also explore possible coordination on rules relating to naked short sales, in particular with regard to position reporting and delivery and pre-borrowing requirements.
The teleconference also covers Under-Regulated or Unregulated Products. Development and disclosure principles to promote transparency in OTC markets for derivatives and other financial instruments which will contribute to enhanced investor protection and mitigating systemic risk.
The meeting also will focus on Credit Rating Agencies. Assessing members' progress in adopting rules based on IOSCO's revised Code of Conduct, and accelerating work on developing a common examination module.
Also covered are, International Accounting Standards, ensuring that the process of developing international accounting standards continues to take account of the interests of investors.
"In addressing turbulent market conditions, it is essential not only that regulators act against securities law violations, including abusive short selling, but also that there be close coordination among international markets to avoid regulatory gaps and unintended consequences," said Chairman Cox. "This high-level coordination among international regulators will allow us to review the steps we have taken thus far and ensure that our ongoing and future actions are effective and mutually reinforcing."
The Technical Committee meeting will consider Short Selling and the effectiveness of recent regulatory responses in reducing manipulative short selling without stifling legitimate short selling activity, also explore possible coordination on rules relating to naked short sales, in particular with regard to position reporting and delivery and pre-borrowing requirements.
The teleconference also covers Under-Regulated or Unregulated Products. Development and disclosure principles to promote transparency in OTC markets for derivatives and other financial instruments which will contribute to enhanced investor protection and mitigating systemic risk.
The meeting also will focus on Credit Rating Agencies. Assessing members' progress in adopting rules based on IOSCO's revised Code of Conduct, and accelerating work on developing a common examination module.
Also covered are, International Accounting Standards, ensuring that the process of developing international accounting standards continues to take account of the interests of investors.
GlobeOp Hires Hedge Fund Expert As Risk Manager
Hedge fund expert Tony Glickman has joined GlobeOp Financial Services as as global head of Risk Services. Glickman will report to Vernon Barback, GlobeOp president and COO, and will be based in the company's New York City office. He will also join GlobeOp's Operating Committee.
"Tony's experience in leading hedge funds and financial risk management teams creates an in-depth understanding of our clients' requirements for risk reporting services," said Vernon Barback. "The current turbulent market underlines the importance of risk measurement, analytics and reporting to hedge funds and investors alike. This presents GlobeOp with significant opportunities. We look forward to Tony's leadership and vision in further strengthening our risk expertise and services as the market evolution continues."
Glickman brings more than 25 years of financial market-related experience to GlobeOp. He began his career as a proprietary trader at Bankers Trust and at Chemical Bank. He also served as head of proprietary trading, and later as treasurer and head of portfolio risk management, during eight years with the Canadian Imperial Bank of Commerce (CIBC). Prior to and following CIBC, he launched and led funds specializing in bond arbitrage, volatility-arbitrage and global macro strategies. In addition, he has served extensively as a consultant to asset managers, public pension funds, central bankers and regulators on strategic risk management issues.
Glickman earned an MBA in finance from the Stern School of Business of New York University, where he was a University Fellow.
"Tony's experience in leading hedge funds and financial risk management teams creates an in-depth understanding of our clients' requirements for risk reporting services," said Vernon Barback. "The current turbulent market underlines the importance of risk measurement, analytics and reporting to hedge funds and investors alike. This presents GlobeOp with significant opportunities. We look forward to Tony's leadership and vision in further strengthening our risk expertise and services as the market evolution continues."
Glickman brings more than 25 years of financial market-related experience to GlobeOp. He began his career as a proprietary trader at Bankers Trust and at Chemical Bank. He also served as head of proprietary trading, and later as treasurer and head of portfolio risk management, during eight years with the Canadian Imperial Bank of Commerce (CIBC). Prior to and following CIBC, he launched and led funds specializing in bond arbitrage, volatility-arbitrage and global macro strategies. In addition, he has served extensively as a consultant to asset managers, public pension funds, central bankers and regulators on strategic risk management issues.
Glickman earned an MBA in finance from the Stern School of Business of New York University, where he was a University Fellow.
Short Selling Outperforms FOHFs as Investors Withdraw Over $40 Billion from Hedge Funds
According to data released by Hedge Fund Research (HFR), the global financial and economic crises accelerated in October, contributing to continued losses in the hedge fund industry, with the HFRI Fund Weighted Composite Index falling nearly 6% for the month.
“Performance of the hedge fund industry has declined over 17% since October 2007, making the current performance drawdown the largest in history,” said Kenneth J. Heinz, President of Hedge Fund Research. “The industry has now registered five consecutive months of losses, another inauspicious first. Consolidation is likely to continue into 2009 as investors across all asset classes indiscriminately liquidate assets to move portfolios into cash holdings.”
Investors withdrew over $40 billion from hedge funds in the month of October which, in addition to $115 billion in performance-based asset losses, reduced the industry capital base by $155 billion. Assets under management in the global hedge fund industry declined to $1.56 trillion at the end of October, a level last seen at the end of Q4 2006.
As of the end of Q3 2008, HFR estimates the entire hedge fund industry to contain more than 10,000 funds, which includes more than 7,400 single-manager funds. October losses follow a challenging third quarter during which global hedge fund capital fell by $210 billion.
The largest capital reductions during the month came from Funds of Hedge Funds, from which investors withdrew over $22 billion. Funds of Hedge Funds have underperformed the overall industry so far this year, with the HFRI Fund of Funds Index posting an 18.50% decline, compared to a loss of 16% for the HFRI Fund Weighted Composite Index.
Performance losses were most significant in funds focused on Emerging Markets, Relative Value Arbitrage and Energy/Basic Materials equities.
Short Selling has posted a strong gain of over 22% for the year. Macro Systematic strategies, which employ quantitative trend-following programs, gained over 6.5% in October and nearly 15% year to date.
Fifty-two percent of October capital outflows were from firms with greater than $5 billion under management; these largest funds represent only 5.5% of the number of funds in the industry but control over 58% of all hedge fund capital.
“Performance of the hedge fund industry has declined over 17% since October 2007, making the current performance drawdown the largest in history,” said Kenneth J. Heinz, President of Hedge Fund Research. “The industry has now registered five consecutive months of losses, another inauspicious first. Consolidation is likely to continue into 2009 as investors across all asset classes indiscriminately liquidate assets to move portfolios into cash holdings.”
Investors withdrew over $40 billion from hedge funds in the month of October which, in addition to $115 billion in performance-based asset losses, reduced the industry capital base by $155 billion. Assets under management in the global hedge fund industry declined to $1.56 trillion at the end of October, a level last seen at the end of Q4 2006.
As of the end of Q3 2008, HFR estimates the entire hedge fund industry to contain more than 10,000 funds, which includes more than 7,400 single-manager funds. October losses follow a challenging third quarter during which global hedge fund capital fell by $210 billion.
The largest capital reductions during the month came from Funds of Hedge Funds, from which investors withdrew over $22 billion. Funds of Hedge Funds have underperformed the overall industry so far this year, with the HFRI Fund of Funds Index posting an 18.50% decline, compared to a loss of 16% for the HFRI Fund Weighted Composite Index.
Performance losses were most significant in funds focused on Emerging Markets, Relative Value Arbitrage and Energy/Basic Materials equities.
Short Selling has posted a strong gain of over 22% for the year. Macro Systematic strategies, which employ quantitative trend-following programs, gained over 6.5% in October and nearly 15% year to date.
Fifty-two percent of October capital outflows were from firms with greater than $5 billion under management; these largest funds represent only 5.5% of the number of funds in the industry but control over 58% of all hedge fund capital.
20 Nov 2008
New Zealand's Absolute Return Managers Index Surge in October
The Ernst and Young New Zealand Absolute Return index surged to its second highest level since inception in October, gaining 2.83% for the month, putting year to date performance at +15.8%, and year on year performance at +18.07%.
Profitable performance from those managers with a positive exposure to the serial correlation of market returns (what some call “trend following”), and implied volatility contributed to a substantial proportion of the month’s gain. A long-short commodities component also surprised with a positive performance, even in the face of weaker commodity markets.
New Zealand Absolute Return Association (NZARA) Chairman Anthony Limbrick, who is also Chief Investment Officer of Pure Capital, one of the contributing managers, said, “The Ernst & Young New Zealand Absolute Return Index was developed to do two things. The first was to raise both offshore and domestic awareness of the small but innovative New Zealand industry. This is an ongoing process but we are confident we are making progress. The second, to highlight the competence of New Zealand managers, continues to be reinforced by the strong performance of the index, both in outright terms, and in relative terms against our global peers”.
The Ernst and Young New Zealand Absolute Return Index is based on a concept of simple averages i.e. each of the seven constituent managers presents an “NZARA Average”, an average of the performance of all their funds or programs that are available for new money. In some cases a manager is presenting an average of several products. This collection of averages is then compiled again as a simple average to create the index. Ernst and Young compiles the index but is not a verification agent and does not guarantee the veracity of the performance numbers presented by the individual managers.
The index documentation was compiled by law firm Minter Ellison Rudd Watts.
Profitable performance from those managers with a positive exposure to the serial correlation of market returns (what some call “trend following”), and implied volatility contributed to a substantial proportion of the month’s gain. A long-short commodities component also surprised with a positive performance, even in the face of weaker commodity markets.
New Zealand Absolute Return Association (NZARA) Chairman Anthony Limbrick, who is also Chief Investment Officer of Pure Capital, one of the contributing managers, said, “The Ernst & Young New Zealand Absolute Return Index was developed to do two things. The first was to raise both offshore and domestic awareness of the small but innovative New Zealand industry. This is an ongoing process but we are confident we are making progress. The second, to highlight the competence of New Zealand managers, continues to be reinforced by the strong performance of the index, both in outright terms, and in relative terms against our global peers”.
The Ernst and Young New Zealand Absolute Return Index is based on a concept of simple averages i.e. each of the seven constituent managers presents an “NZARA Average”, an average of the performance of all their funds or programs that are available for new money. In some cases a manager is presenting an average of several products. This collection of averages is then compiled again as a simple average to create the index. Ernst and Young compiles the index but is not a verification agent and does not guarantee the veracity of the performance numbers presented by the individual managers.
The index documentation was compiled by law firm Minter Ellison Rudd Watts.
Tech provider GlobeOp ranked in FinTech 100 and RiskTech 100
Hedge fund technology and administration provider GlobeOp Financial Services has been ranked in both the FinTech 100 and the RiskTech 100.
"Technology is central to GlobeOp's hedge fund services and this dual recognition is timely as current market uncertainty underlines the value of a robust, risk-driven technology infrastructure to fund managers and their investors," said Bob Schwartz, GlobeOp chief technology officer. "Our platform represents more than 500 man-years of development. Just as client services benefit from the Wall Street experience of GlobeOp's senior management, we also apply front office technology techniques to operations processing to achieve risk reduction benefits for our clients."
Addressing current market challenges for hedge funds, Vernon Barback, GlobeOp chief operating officer added, "New market fundamentals - such as risk diversification and cost-efficiency - are accelerating the outsourcing trend as a means of mitigating operational risk. The FinTech 100 and RiskTech 100 rankings are useful benchmarks as funds seek independent, un-conflicted service providers, which can combine technology management and innovation, deep domain knowledge in operations and risk measurement, scalable infrastructure and a healthy balance sheet."
The FinTech 100, published by American Banker and research firm Financial Insights, ranked GlobeOp in 51st position after analyzing more than 400 companies who derive more than a third of revenues from financial services.
The RiskTech 100, published by Chartis Research, recognizes leading global technology firms active in risk management services. Ranking 52nd, GlobeOp earned one of the highest scores for innovation in the RiskTech 100, and strong scores for core technology, customer satisfaction and organizational strength. The 2008 report identified 100 leading companies from 3,200 initial candidates, more than 800 risk technology buyer surveys, and interviews with vendors and buyers across 15 countries.
GlobeOp today serves over 180 clients worldwide, representing $108 billion in assets under administration (AuA). With headquarters in London and New York, GlobeOp employs 1,800 people on three continents; offices are also located in Dublin, Ireland; George Town, Cayman Islands; Harrison, NY and Hartford, CT, U.S.A.; and Mumbai (Bombay), India.
"Technology is central to GlobeOp's hedge fund services and this dual recognition is timely as current market uncertainty underlines the value of a robust, risk-driven technology infrastructure to fund managers and their investors," said Bob Schwartz, GlobeOp chief technology officer. "Our platform represents more than 500 man-years of development. Just as client services benefit from the Wall Street experience of GlobeOp's senior management, we also apply front office technology techniques to operations processing to achieve risk reduction benefits for our clients."
Addressing current market challenges for hedge funds, Vernon Barback, GlobeOp chief operating officer added, "New market fundamentals - such as risk diversification and cost-efficiency - are accelerating the outsourcing trend as a means of mitigating operational risk. The FinTech 100 and RiskTech 100 rankings are useful benchmarks as funds seek independent, un-conflicted service providers, which can combine technology management and innovation, deep domain knowledge in operations and risk measurement, scalable infrastructure and a healthy balance sheet."
The FinTech 100, published by American Banker and research firm Financial Insights, ranked GlobeOp in 51st position after analyzing more than 400 companies who derive more than a third of revenues from financial services.
The RiskTech 100, published by Chartis Research, recognizes leading global technology firms active in risk management services. Ranking 52nd, GlobeOp earned one of the highest scores for innovation in the RiskTech 100, and strong scores for core technology, customer satisfaction and organizational strength. The 2008 report identified 100 leading companies from 3,200 initial candidates, more than 800 risk technology buyer surveys, and interviews with vendors and buyers across 15 countries.
GlobeOp today serves over 180 clients worldwide, representing $108 billion in assets under administration (AuA). With headquarters in London and New York, GlobeOp employs 1,800 people on three continents; offices are also located in Dublin, Ireland; George Town, Cayman Islands; Harrison, NY and Hartford, CT, U.S.A.; and Mumbai (Bombay), India.
19 Nov 2008
Dubai Real Estate Ruled by 'Natural Selection'
In a recent real estate seminar, sponsored by World Class Group in Dubai, the keynote speaker said that the future of the real estate market will be based on Darwin's law of natural selection.
Michael J. Tolan, CEO of World Class Group was addressing representatives from over 30 real estate related companies attending the forum, 'Beating the Economic Meltdown, Wrestling Alligators in Dubai'. The seminar was attended by hedge fund managers, property developers and real estate agents.
Tolan said that Developers who will continue to use the models of the past 18 months in the market could be in for a severe correction in their performance numbers, "The trends of the market will follow Darwin's Theory of Natural Selection and the entire model of the market will transform." he said.
"Developers will take lessons from the past recessions and will innovate new packaging and offerings to comply to investor demand," Tolan Said, "More rent to own schemes, attractive and flexible in-house finance, and real estate investment trusts will emerge to lure investors back into the stormy and uncertain waters of the real estate market."
Tolan also highlighted the advent of fractional ownership and timeshare schemes which will evolve in the Dubai UAE markets to offset the oversupply of unsold inventory and attract a new class of investors and speculators.
"In the past, the lucrative Dubai real estate market has succeeded on the heals of market euphoria and innuendo, which has created an artificial hype. Vanity selling has been the main culprit," he said.
The market value today exceeds 4 trillion dollars of existing or pipeline projects, including the world tallest building and projects like the Palm Islands which feature Trump Towers, Atlantis and the new World Islands.
"Developers and agents in the future must address the fear factor that may prevent investors to plunge into the market, and good solid regulations that Dubai has now adopted will go far to overcome consumer protection issues often absent in the past."
"Real estate consumers will respond when they have a big enough incentive to do so, therefore the more flexible and innovative the offering, combined with stringent measures of safety and protection,the better the outcome for the future of prosperity in the Dubai market arena," he added. "The Dubai market is experiencing a slow down, however is dynamic, amazing and full of promise."
Michael J. Tolan, CEO of World Class Group was addressing representatives from over 30 real estate related companies attending the forum, 'Beating the Economic Meltdown, Wrestling Alligators in Dubai'. The seminar was attended by hedge fund managers, property developers and real estate agents.
Tolan said that Developers who will continue to use the models of the past 18 months in the market could be in for a severe correction in their performance numbers, "The trends of the market will follow Darwin's Theory of Natural Selection and the entire model of the market will transform." he said.
"Developers will take lessons from the past recessions and will innovate new packaging and offerings to comply to investor demand," Tolan Said, "More rent to own schemes, attractive and flexible in-house finance, and real estate investment trusts will emerge to lure investors back into the stormy and uncertain waters of the real estate market."
Tolan also highlighted the advent of fractional ownership and timeshare schemes which will evolve in the Dubai UAE markets to offset the oversupply of unsold inventory and attract a new class of investors and speculators.
"In the past, the lucrative Dubai real estate market has succeeded on the heals of market euphoria and innuendo, which has created an artificial hype. Vanity selling has been the main culprit," he said.
The market value today exceeds 4 trillion dollars of existing or pipeline projects, including the world tallest building and projects like the Palm Islands which feature Trump Towers, Atlantis and the new World Islands.
"Developers and agents in the future must address the fear factor that may prevent investors to plunge into the market, and good solid regulations that Dubai has now adopted will go far to overcome consumer protection issues often absent in the past."
"Real estate consumers will respond when they have a big enough incentive to do so, therefore the more flexible and innovative the offering, combined with stringent measures of safety and protection,the better the outcome for the future of prosperity in the Dubai market arena," he added. "The Dubai market is experiencing a slow down, however is dynamic, amazing and full of promise."
Companies and Markets Reports on Hedge Funds in Europe 2008
Companiesandmarkets.com has released a report presentig views on the market for hedge fund investment based on a survey of 100 leading asset managers across Europe.
The report, which covers mass market, high net worth and institutional customer groups, forms part of a series looking at the market for alternative investments in Europe. Looking at the onshore hedge fund market in France, Germany, Italy, Spain and
the UK, the report provides forecasts to 2012, analysing legislative developments and their implications for growth in the European hedge fund market. The report also dentifies the primary client segments and appropriate marketing and distribution strategies for individual countries.
There will be strong growth in funds of hedge funds over the next year, the report states, with less demand for single hedge funds according to 65% of asset managers in Europe. Asset managers in Spain and Italy believe most strongly that the demand for funds of hedge funds will outstrip that for single hedge funds, followed by France, Germany and finally the UK.
Across the five core economies in Western Europe – France, Germany, Italy, Spain and the UK – institutional investors now dominate the market for hedge funds. On average, slightly more than two-thirds of asset managers confirmed that this group represents their biggest customer segment for hedge funds today. In Italy, mass market investors may also be put off by the price of hedge fund investment, according to 40% of asset managers there. In Spain, on the other hand, demand from mass market clients is being limited by competition from capital-protected and structured products and inadequate promotion of hedge fund products by banks and advisors.
The report, which covers mass market, high net worth and institutional customer groups, forms part of a series looking at the market for alternative investments in Europe. Looking at the onshore hedge fund market in France, Germany, Italy, Spain and
the UK, the report provides forecasts to 2012, analysing legislative developments and their implications for growth in the European hedge fund market. The report also dentifies the primary client segments and appropriate marketing and distribution strategies for individual countries.
There will be strong growth in funds of hedge funds over the next year, the report states, with less demand for single hedge funds according to 65% of asset managers in Europe. Asset managers in Spain and Italy believe most strongly that the demand for funds of hedge funds will outstrip that for single hedge funds, followed by France, Germany and finally the UK.
Across the five core economies in Western Europe – France, Germany, Italy, Spain and the UK – institutional investors now dominate the market for hedge funds. On average, slightly more than two-thirds of asset managers confirmed that this group represents their biggest customer segment for hedge funds today. In Italy, mass market investors may also be put off by the price of hedge fund investment, according to 40% of asset managers there. In Spain, on the other hand, demand from mass market clients is being limited by competition from capital-protected and structured products and inadequate promotion of hedge fund products by banks and advisors.
18 Nov 2008
European-domiciled Hedge Funds Administration Services Strengthened by GlobeOp
GlobeOp announced the strengthening its European-domiciled hedge fund administration services following the licensing of its Dublin office by the Irish Financial Services Regulatory Authority, expanding the company’s existing fund administration network based in the Cayman Islands and the USA.
The office is led by Jim Casey, GlobeOp’s global head of investor relations,"Ireland is a strategically important administrative center for European domiciled funds," Casey said, "Despite market turbulence this past year, the European funds sector continues to develop its long-term potential. I look forward to building a Dublin team whose best practices further strengthen our fund administration services globally.”
"The GlobeOp Ireland license allows us to directly service Irish domiciled funds and support European hedge fund clients and their investors with full fund administration services," Vernon Barback, GlobeOp president and chief operating officer said, "This includes independent and transparent fund performance reporting.”
The GlobeOp Ireland license allows GlobeOp to directly service Irish domiciled funds and support European hedge fund clients and their investors with full fund administration services.
With $108 billion in assets under administration, GlobeOp has more than 14,000 investors globally. Earlier this year the company opened a new hurricane-proof office in Caymana Bay, Cayman Islands and appointed Gary Linford, former head of the Investment & Securities Division of the Cayman Islands Monetary Authority (CIMA), to its Cayman Islands subsidiary board.
The office is led by Jim Casey, GlobeOp’s global head of investor relations,"Ireland is a strategically important administrative center for European domiciled funds," Casey said, "Despite market turbulence this past year, the European funds sector continues to develop its long-term potential. I look forward to building a Dublin team whose best practices further strengthen our fund administration services globally.”
"The GlobeOp Ireland license allows us to directly service Irish domiciled funds and support European hedge fund clients and their investors with full fund administration services," Vernon Barback, GlobeOp president and chief operating officer said, "This includes independent and transparent fund performance reporting.”
The GlobeOp Ireland license allows GlobeOp to directly service Irish domiciled funds and support European hedge fund clients and their investors with full fund administration services.
With $108 billion in assets under administration, GlobeOp has more than 14,000 investors globally. Earlier this year the company opened a new hurricane-proof office in Caymana Bay, Cayman Islands and appointed Gary Linford, former head of the Investment & Securities Division of the Cayman Islands Monetary Authority (CIMA), to its Cayman Islands subsidiary board.
Hedge Fund Manager OakRun Launches Short Term Fund
Hedge fund Manager OakRun Capital LLC, has announced the launch of a receivables refactoring fund, the 'Short Term Fund'.
The 'Short Term Fund', a Cayman Islands exempted fund, launched on October 1st and came in at 9.48% annualized in its first month.
The fund's objective is to generate above average current income with a lower overall credit risk profile and maintain a stable NAV.
With JP Morgan & Wachovia Bank as Custodian, the fund has a 1% management fee, 10% performance fee, quarterly redemptions, an initial lock-up period of 6 months and a minimum investment of $1,000,000. Shares are offered for subscription to eligible non-U.S. persons.
Managed by a board of directors responsible for the overall supervision and control, the fund has engaged OakRun Capital to perform management and administrative functions.
"We do not believe that simply managing for relative performance is satisfactory to our clients or ourselves." says Scott Rhodenizer, Founder, CEO, and Chief Investment Officer, "While we work to outperform the markets, we strive to do so without excessive risk.”
The fund will seek to achieve its objective through a process known as factoring. In markets for debt instruments, higher relative yields generally indicate greater levels of credit risk than lower yielding instruments. However, OakRun believes that the trade receivables purchased by the fund present an opportunity to achieve higher yields with moderate risk.
Rhodenizer is former Managing Director at Deutsche Bank Securities with over 16 years of experience within the investment industry. He advised on over $2.5 billion in institutional assets at Deutsche Bank Securities in Miami, Florida and has experience in traditional and structured investments, such as fixed income securities, derivatives, global equities, and commodities.
At least 50% of the portfolio is insured by Euler American Credit Indemnity, an Allianz company and insurer of domestic and foreign accounts receivable covering US sales in excess of $150 billion annually. Euler is North America’s leading credit insurer, rated AA- by Standard & Poor’s. It is a subsidiary of Paris-based Euler incorporated in 1891 with current net assets in excess of $3.0 billion.
The 'Short Term Fund', a Cayman Islands exempted fund, launched on October 1st and came in at 9.48% annualized in its first month.
The fund's objective is to generate above average current income with a lower overall credit risk profile and maintain a stable NAV.
With JP Morgan & Wachovia Bank as Custodian, the fund has a 1% management fee, 10% performance fee, quarterly redemptions, an initial lock-up period of 6 months and a minimum investment of $1,000,000. Shares are offered for subscription to eligible non-U.S. persons.
Managed by a board of directors responsible for the overall supervision and control, the fund has engaged OakRun Capital to perform management and administrative functions.
"We do not believe that simply managing for relative performance is satisfactory to our clients or ourselves." says Scott Rhodenizer, Founder, CEO, and Chief Investment Officer, "While we work to outperform the markets, we strive to do so without excessive risk.”
The fund will seek to achieve its objective through a process known as factoring. In markets for debt instruments, higher relative yields generally indicate greater levels of credit risk than lower yielding instruments. However, OakRun believes that the trade receivables purchased by the fund present an opportunity to achieve higher yields with moderate risk.
Rhodenizer is former Managing Director at Deutsche Bank Securities with over 16 years of experience within the investment industry. He advised on over $2.5 billion in institutional assets at Deutsche Bank Securities in Miami, Florida and has experience in traditional and structured investments, such as fixed income securities, derivatives, global equities, and commodities.
At least 50% of the portfolio is insured by Euler American Credit Indemnity, an Allianz company and insurer of domestic and foreign accounts receivable covering US sales in excess of $150 billion annually. Euler is North America’s leading credit insurer, rated AA- by Standard & Poor’s. It is a subsidiary of Paris-based Euler incorporated in 1891 with current net assets in excess of $3.0 billion.
17 Nov 2008
Hedge Funds Praise The Receivables Exchange
Receivables Exchange, the world’s first online marketplace for real-time trading of accounts receivable, today announced that it has launched its proprietary patent-pending trading platform to conduct live trading of accounts receivable.
“The Receivables Exchange is a phenomenal idea that has hit the asset based finance industry by storm,” said Michael Scanlon, Managing Director of HedgeCo.net and Member of the Board for The Hedge Fund Association. “Through its centralized, transparent marketplace, it is transforming an industry that has long been based on one-to-one relationships, effectively making the sale of commercial receivables a completely transparent and globally competitive marketplace.”
At The Receivables Exchange, U.S. businesses (Sellers) are able to increase their cash flow and free up their working capital by having their outstanding receivables bid on in real-time by a global network of institutional investors (Buyers).
“The Receivables Exchange was founded on the fundamental belief that America’s small and mid-sized businesses should have better access to working capital,” said Justin Brownhill, co-founder and chief executive officer of The Receivables Exchange. “In today’s credit crisis, we’re hearing from CEOs and CFOs across the country that the need has never been greater for them to identify alternative funding sources to reinvest into their businesses in order to maintain their success.”
Companies of all sizes – from under $10 million to over $150 million - have been signing up to use their receivables to accelerate cash flow. Members span a diverse range of dozens of industries, including manufacturing, technology, transportation, distribution and staffing – all realizing the strategic advantage of monetizing their accounts receivable, particularly in today’s troubling credit crunch.
Commercial banks, hedge funds and asset-based lenders can take advantage of the centralized, competitive marketplace to realize a stable, high growth investment opportunity.
“The Receivables Exchange allows us to extend our asset-based finance investment strategies to include short-term receivables,” said Sam Adams, managing director of Cedar Lane, a New York based asset based hedge fund. “The Exchange offers a unique opportunity to obtain returns better than money-market but with shorter tenures than the traditional entertainment and media loan positions in our funds’ portfolios. Through The Receivables Exchange platform we can invest funds on a short-term basis to a qualified pool of Sellers at a more attractive rate of return than cash alternatives without diverging from our investment strategy.”
“The Receivables Exchange is a phenomenal idea that has hit the asset based finance industry by storm,” said Michael Scanlon, Managing Director of HedgeCo.net and Member of the Board for The Hedge Fund Association. “Through its centralized, transparent marketplace, it is transforming an industry that has long been based on one-to-one relationships, effectively making the sale of commercial receivables a completely transparent and globally competitive marketplace.”
At The Receivables Exchange, U.S. businesses (Sellers) are able to increase their cash flow and free up their working capital by having their outstanding receivables bid on in real-time by a global network of institutional investors (Buyers).
“The Receivables Exchange was founded on the fundamental belief that America’s small and mid-sized businesses should have better access to working capital,” said Justin Brownhill, co-founder and chief executive officer of The Receivables Exchange. “In today’s credit crisis, we’re hearing from CEOs and CFOs across the country that the need has never been greater for them to identify alternative funding sources to reinvest into their businesses in order to maintain their success.”
Companies of all sizes – from under $10 million to over $150 million - have been signing up to use their receivables to accelerate cash flow. Members span a diverse range of dozens of industries, including manufacturing, technology, transportation, distribution and staffing – all realizing the strategic advantage of monetizing their accounts receivable, particularly in today’s troubling credit crunch.
Commercial banks, hedge funds and asset-based lenders can take advantage of the centralized, competitive marketplace to realize a stable, high growth investment opportunity.
“The Receivables Exchange allows us to extend our asset-based finance investment strategies to include short-term receivables,” said Sam Adams, managing director of Cedar Lane, a New York based asset based hedge fund. “The Exchange offers a unique opportunity to obtain returns better than money-market but with shorter tenures than the traditional entertainment and media loan positions in our funds’ portfolios. Through The Receivables Exchange platform we can invest funds on a short-term basis to a qualified pool of Sellers at a more attractive rate of return than cash alternatives without diverging from our investment strategy.”
Pharos Hedge Fund Launches Office In Dubai
Pharos Financial Advisors Limited, a specialist emerging markets fund manager, announced that it has been granted a license by the Dubai Financial Services Authority (DFSA) to operate as an authorised firm within the Dubai International Financial Centre (DIFC).
Founded in 1997 by US national, Peter M. Halloran, with seed capital from Soros Fund Management and CS First Boston, Pharos Financial Group currently runs three funds - the Pharos Russia Fund, the Pharos Small Cap Fund, and the Pharos Gas Investment Fund.
"We are delighted to receive a license from DFSA, particularly as the first ever fund manager with a Russian/CIS focus to join DIFC," Halloran said, "Pharos intends to fill the niche as the market leader in emerging markets fund management. Already we have seen tremendous appetite from GCC investors for our Russian-focused investment opportunities."
Prior to founding Pharos Financial Group, Halloran was the principal contributor toward building the #1 ranked CS First Boston equity and fixed income brokerage businesses in Russia and the CIS. He has been a leader in the development of the Russian capital markets since their inception in 1994, bringing more than $8 billion to the markets through debt, equity and private placements including Russia's first local IPO and more than $2 billion of privatisation initiatives.
Welcoming Pharos to DIFC, Nasser Al Shaali, CEO, commented, "We welcome Pharos Financial Group to the Dubai International Financial Centre. DIFC will provide Pharos with a supportive environment to advance their business growth in the Middle East. The world-class regulatory framework in DIFC will give them additional credibility as a specialist emerging market fund manager."
The Pharos investment team brings more than 90 years of combined expertise in emerging markets to its new operations in DIFC. Moreover, Pharos has sat on 40 seats of Russian company boards. Two Pharos Funds were ranked among the top 15 hedge funds globally by Bloomberg and Eurohedge. Currently, the three Pharos funds are ranked 1-2-3 among best performers in Russia this year.
The Dubai International Financial Centre (DIFC) is an onshore hub for global finance. It bridges the time gap between the financial centres of Hong Kong and London and services a region with the largest untapped emerging market for financial services. In just three years, over 700 firms have registered at the DIFC.
Pharos Financial Group ranks as the world's leading fund manager having a focus on Russia and the CIS with a successful track record of over 11 years. With offices in Moscow and now Dubai, Pharos Financial Group has produced superior absolute returns over the years while providing institutions and private investors an opportunity to gain exposure in the emerging markets of Russia and the CIS.
Founded in 1997 by US national, Peter M. Halloran, with seed capital from Soros Fund Management and CS First Boston, Pharos Financial Group currently runs three funds - the Pharos Russia Fund, the Pharos Small Cap Fund, and the Pharos Gas Investment Fund.
"We are delighted to receive a license from DFSA, particularly as the first ever fund manager with a Russian/CIS focus to join DIFC," Halloran said, "Pharos intends to fill the niche as the market leader in emerging markets fund management. Already we have seen tremendous appetite from GCC investors for our Russian-focused investment opportunities."
Prior to founding Pharos Financial Group, Halloran was the principal contributor toward building the #1 ranked CS First Boston equity and fixed income brokerage businesses in Russia and the CIS. He has been a leader in the development of the Russian capital markets since their inception in 1994, bringing more than $8 billion to the markets through debt, equity and private placements including Russia's first local IPO and more than $2 billion of privatisation initiatives.
Welcoming Pharos to DIFC, Nasser Al Shaali, CEO, commented, "We welcome Pharos Financial Group to the Dubai International Financial Centre. DIFC will provide Pharos with a supportive environment to advance their business growth in the Middle East. The world-class regulatory framework in DIFC will give them additional credibility as a specialist emerging market fund manager."
The Pharos investment team brings more than 90 years of combined expertise in emerging markets to its new operations in DIFC. Moreover, Pharos has sat on 40 seats of Russian company boards. Two Pharos Funds were ranked among the top 15 hedge funds globally by Bloomberg and Eurohedge. Currently, the three Pharos funds are ranked 1-2-3 among best performers in Russia this year.
The Dubai International Financial Centre (DIFC) is an onshore hub for global finance. It bridges the time gap between the financial centres of Hong Kong and London and services a region with the largest untapped emerging market for financial services. In just three years, over 700 firms have registered at the DIFC.
Pharos Financial Group ranks as the world's leading fund manager having a focus on Russia and the CIS with a successful track record of over 11 years. With offices in Moscow and now Dubai, Pharos Financial Group has produced superior absolute returns over the years while providing institutions and private investors an opportunity to gain exposure in the emerging markets of Russia and the CIS.
14 Nov 2008
20 Biggest Economies In World Economic Summit Tomorrow
The leaders of the world's 20 biggest economies will hold an historic meeting Saturday in a bid to head off the threat of a protracted global recession and forge a new world financial order. Called together less than two months ago by US President George W Bush, the emergency summit of the Group of 20 (G20) leaders at the Washington National Building Museum comes in the wake of the biggest crisis to engulf the world economy since the Great Depression.
Unleashed by the US mortgage meltdown, the upheaval in the world financial system that emerged in recent months has sent stock exchanges into a tailspin, undercut credit markets and prompted a drive for tighter worldwide regulation of the financial industry.
As the crisis spread from the United States to the wider world, the International Monetary Fund (IMF) last week forecast global growth would slow to 2.2 per cent in 2009, considered a global recession by the organization. Most advanced economies will contract over the same period.
Billed as a Bretton Woods-style gathering, after the 1944 meeting that established the post-Second World War financial system, this week's summit marks the launch of a process world leaders hope will lead to an overhaul of the rule book for the global financial industry.
While a revision of the capitalist model itself may not be on the horizon, even financial institutions have recognized that more transparency and scrutiny of their business practices is now inevitable.
"We do believe that coming out of all this will be some rather fundamental reforms in the global financial architecture," said Charles Dallara, managing director of the Institute of International Finance (IIF), the world's top banking lobby.
The IIF has even called for a new global body that could coordinate such reforms, but Dallara added: "I think it would be the height of misguidedness if we concluded that capitalism is dead. I think we do need to fix the things that went wrong."
But many governments have sought to lower expectations for the summit, while others have pushed for a broader agenda that could include climate change and trade policy.
"The summit has not been well prepared," said Heribert Dieter, senior fellow with the German Institute for International and Security Affairs in Berlin. "It is not clear what those attending the summit really want to talk about."
Indeed, a major risk facing the summit is that it could expose deep divisions between the US and other key G20 states, with the Europeans expected to try press for more regulation than the US believes is necessary.
At the same time, major emerging economies such as China, Russia and Brazil are likely to demand a key role in drawing up the blueprint for the new financial system.
Responding to the slew of proposals for the Washington summit, the White House has said world leaders will agree on a set of "principles" for a regulatory overhaul and leave the specifics to a later date.
Those principles could include raising the low capital requirements that precipitated the current credit crisis by allowing banks to take excessive risks and amass mountains of debt. International credit-rating agencies could also face tougher scrutiny, and the summit will likely set in motion moves towards closer co-operation between national bank supervisory bodies.
In addition, there are plans for a crackdown on tax havens as well as financial sectors that have so far managed to evade regulation, such as hedge funds.
One of the more concrete measures likely to result from the G20 meeting is an expansion of the role played by the IMF, a global lender of last resort that has also traditionally been charged with maintaining economic stability.
Governments, central banks and legislatures around the world have already taken a series of unprecedented measures in an effort to stabilize the financial system, including coordinated interest-rate cuts and billion-dollar rescue packages for struggling banks.
Yet governments attending Saturday's meeting are likely to face calls for the implementation of generous national economic stimulus plans to help the world economy limp through the current uncertainty.
Morris Goldstein of the Peterson Institute for International Economics said investments of 1-2 per cent of gross domestic product should be offered by every G20 member government that can afford it.
In addition to the world's leading industrialized countries such as the US, Germany, Japan, Canada, Italy, Britain and France, the G20 also includes key emerging economies such as China, India, Russia and Brazil, which have been a major source of global economic growth in recent years.
Coming less than two weeks after Barack Obama's election and within a few months of Bush's departure from the White House, the process will ultimately give the new president the chance to help reshape the global financial structure.
Obama will not attend the summit, stressing last week that the US only has "one president at a time," but the White House has said his team of economic advisors will be regularly informed on its progress.
Indeed, the scale of the changes that are to be considered are expected to take several months to implement and consequently form a key part of Obama's early period in office.
Unleashed by the US mortgage meltdown, the upheaval in the world financial system that emerged in recent months has sent stock exchanges into a tailspin, undercut credit markets and prompted a drive for tighter worldwide regulation of the financial industry.
As the crisis spread from the United States to the wider world, the International Monetary Fund (IMF) last week forecast global growth would slow to 2.2 per cent in 2009, considered a global recession by the organization. Most advanced economies will contract over the same period.
Billed as a Bretton Woods-style gathering, after the 1944 meeting that established the post-Second World War financial system, this week's summit marks the launch of a process world leaders hope will lead to an overhaul of the rule book for the global financial industry.
While a revision of the capitalist model itself may not be on the horizon, even financial institutions have recognized that more transparency and scrutiny of their business practices is now inevitable.
"We do believe that coming out of all this will be some rather fundamental reforms in the global financial architecture," said Charles Dallara, managing director of the Institute of International Finance (IIF), the world's top banking lobby.
The IIF has even called for a new global body that could coordinate such reforms, but Dallara added: "I think it would be the height of misguidedness if we concluded that capitalism is dead. I think we do need to fix the things that went wrong."
But many governments have sought to lower expectations for the summit, while others have pushed for a broader agenda that could include climate change and trade policy.
"The summit has not been well prepared," said Heribert Dieter, senior fellow with the German Institute for International and Security Affairs in Berlin. "It is not clear what those attending the summit really want to talk about."
Indeed, a major risk facing the summit is that it could expose deep divisions between the US and other key G20 states, with the Europeans expected to try press for more regulation than the US believes is necessary.
At the same time, major emerging economies such as China, Russia and Brazil are likely to demand a key role in drawing up the blueprint for the new financial system.
Responding to the slew of proposals for the Washington summit, the White House has said world leaders will agree on a set of "principles" for a regulatory overhaul and leave the specifics to a later date.
Those principles could include raising the low capital requirements that precipitated the current credit crisis by allowing banks to take excessive risks and amass mountains of debt. International credit-rating agencies could also face tougher scrutiny, and the summit will likely set in motion moves towards closer co-operation between national bank supervisory bodies.
In addition, there are plans for a crackdown on tax havens as well as financial sectors that have so far managed to evade regulation, such as hedge funds.
One of the more concrete measures likely to result from the G20 meeting is an expansion of the role played by the IMF, a global lender of last resort that has also traditionally been charged with maintaining economic stability.
Governments, central banks and legislatures around the world have already taken a series of unprecedented measures in an effort to stabilize the financial system, including coordinated interest-rate cuts and billion-dollar rescue packages for struggling banks.
Yet governments attending Saturday's meeting are likely to face calls for the implementation of generous national economic stimulus plans to help the world economy limp through the current uncertainty.
Morris Goldstein of the Peterson Institute for International Economics said investments of 1-2 per cent of gross domestic product should be offered by every G20 member government that can afford it.
In addition to the world's leading industrialized countries such as the US, Germany, Japan, Canada, Italy, Britain and France, the G20 also includes key emerging economies such as China, India, Russia and Brazil, which have been a major source of global economic growth in recent years.
Coming less than two weeks after Barack Obama's election and within a few months of Bush's departure from the White House, the process will ultimately give the new president the chance to help reshape the global financial structure.
Obama will not attend the summit, stressing last week that the US only has "one president at a time," but the White House has said his team of economic advisors will be regularly informed on its progress.
Indeed, the scale of the changes that are to be considered are expected to take several months to implement and consequently form a key part of Obama's early period in office.
13 Nov 2008
AdultVest Closes Offering on Priapus, Says Fund on Track for the Year
Alternative investment management firm and Hedge Fund Launch of the Year Award Winner, AdultVest, Inc., announced it officially closed its offering in the Priapus Investment Fund, LLC.
"In spite of the US and Global economic condition, the Priapus Investment Fund, LLC is on track for a great year," Francis Koenig, the Manager of the Priapus Fund said, saying also that he has plans to re-open a new offering soon.
This year the Priapus Investment Fund acquired iPorn. com, HandJob. com, and several adult content libraries. The fund has invested in the development and acquisition of several internet technologies, software platforms, and mobile technologies, and also acquired a stake in a public company operating gentlemen's clubs.
"We have identified a few more opportunities that will close out the year and expect the fund to be fully invested by early 2009," Koenig said, 2We are already hard at work on the development of Priapus Investment Fund II and have very high expectations for the new fund."
The Beverly Hills, California-based investment company deals exclusively in the estimated 100 billion dollar Adult Entertainment Industry. It is active in mergers, acquisitions, and operates the only on-line investment community with over 4,500 registered investors and over 1,000 adult entertainment companies seeking investments, mergers, and acquisitions.
"In spite of the US and Global economic condition, the Priapus Investment Fund, LLC is on track for a great year," Francis Koenig, the Manager of the Priapus Fund said, saying also that he has plans to re-open a new offering soon.
This year the Priapus Investment Fund acquired iPorn. com, HandJob. com, and several adult content libraries. The fund has invested in the development and acquisition of several internet technologies, software platforms, and mobile technologies, and also acquired a stake in a public company operating gentlemen's clubs.
"We have identified a few more opportunities that will close out the year and expect the fund to be fully invested by early 2009," Koenig said, 2We are already hard at work on the development of Priapus Investment Fund II and have very high expectations for the new fund."
The Beverly Hills, California-based investment company deals exclusively in the estimated 100 billion dollar Adult Entertainment Industry. It is active in mergers, acquisitions, and operates the only on-line investment community with over 4,500 registered investors and over 1,000 adult entertainment companies seeking investments, mergers, and acquisitions.
12 Nov 2008
New European Hedge Fund Association Launch Underway
Preparations are underway for the creation of a new European hedge fund association, hedgemeetings.com, which has the objective to communicate the public utility of this industry for wealth creation and risk management. A first meeting for founding participants will take place this Friday, November 14, in Paris.
Rene Friedrich, 45, who has analyzed and selected hedge funds since 1996, is launching the initiative, as he sees the industry's advantages undervalued, "There a many opinions about the risks of hedge funds and about the wealth created for their managers, but one sees rarely a balanced view of the general public utility of better asset management in general and of hedge fund work in particular. The realness of the benefits only seems to become apparent when the opposite occurs and wealth is lost in financial markets. The fact is that effective asset management contributes wealth to the economy."
"The initiative aims to give the hedge fund industry a more just image: While individual hedge funds can have more risks than other investment products and investors may lose all or part of their invested capital, the industry overall has, so far this year, avoided the degree of wealth loss of equity investments in general. And a notable number of funds even has avoided losses altogether, no small achievement. It can be argued that future regulations, which could facilitate a greater diversification into hedge funds and funds of hedge funds, may ultimately help to reduce the sum of wealth destructions in cyclical downturns."
"Asset management is not a zero sum game, financial investments are the source of capital in projects, and any wealth created, or not lost, is added, or maintained, in the economy. These are basic principles, and for all the criticisms of financial markets, some just and some not, the objective must be to use what is helping," Friedrich concluded.
Rene Friedrich, 45, who has analyzed and selected hedge funds since 1996, is launching the initiative, as he sees the industry's advantages undervalued, "There a many opinions about the risks of hedge funds and about the wealth created for their managers, but one sees rarely a balanced view of the general public utility of better asset management in general and of hedge fund work in particular. The realness of the benefits only seems to become apparent when the opposite occurs and wealth is lost in financial markets. The fact is that effective asset management contributes wealth to the economy."
"The initiative aims to give the hedge fund industry a more just image: While individual hedge funds can have more risks than other investment products and investors may lose all or part of their invested capital, the industry overall has, so far this year, avoided the degree of wealth loss of equity investments in general. And a notable number of funds even has avoided losses altogether, no small achievement. It can be argued that future regulations, which could facilitate a greater diversification into hedge funds and funds of hedge funds, may ultimately help to reduce the sum of wealth destructions in cyclical downturns."
"Asset management is not a zero sum game, financial investments are the source of capital in projects, and any wealth created, or not lost, is added, or maintained, in the economy. These are basic principles, and for all the criticisms of financial markets, some just and some not, the objective must be to use what is helping," Friedrich concluded.
Strong Performance For Pure Capital In October
Pure Capital Limited, a quantitatively-driven hedge fund specializing in “targeted non-correlation” saw strong performance from their “Pure Bespoke” customized portfolio solutions in October – with client account performance ranging from +4% to +10% for the month.
Pure Capital describe their “targeted non-correlation” approach as “the provision of positive investment return streams that are very low or negatively-correlated with specific geographic or asset class benchmarks”.
Pure Capital’s year-to-date average performance across all products was +26% at month-end October 2008. Medium term correlation coefficients ranged from -0.15 to -0.80.
"We have a range of quantitative techniques through which we both deconstruct and analyze portfolio performance." Anthony Limbrick, Pure Capital’s Chief Investment Officer said, "Once portfolio performance drivers have been specified, customized portfolio solutions are built using a series of proprietary building blocks, each of which is designed to address specific types of pay-offs".
In September the Paris-based EDHEC Risk and Asset Management Research Centre published a report on overlay hedging in fund of funds. The report, authored by David E. Kuenzi, Remy Chaudhuri and Zhihui Dong of Glenwood Capital investments concluded that “a hedging capability removes a significant constraint from FoFs” and “should have the net result of improving alpha, allowing for more unique and idiosyncratic portfolios, and for more creative structured products”.
Limbrick highlighted the benefits to a European fund of fund of implementing a Pure Bespoke solution - “if one were to use the Eurekahedge European fund of funds index as a fund of fund proxy, our Pure European BetaMatch program could have reduced fund of fund losses from almost 19% year-to-date to less than 1%. Not only would performance have been improved, but there would have also been more cash available for redemption needs. We also give our clients the choice of upside beta exposure if they require it”.
In response to a question regarding the type of client exposures hedged by the Pure Capital, Limbrick said the Pure Bespoke portfolio solutions typically address “pervasive equity beta exposures or potential gap risk issues but we do look forward to widening the approach to address a range of more exotic or dynamic exposures”.
Pure Capital describe their “targeted non-correlation” approach as “the provision of positive investment return streams that are very low or negatively-correlated with specific geographic or asset class benchmarks”.
Pure Capital’s year-to-date average performance across all products was +26% at month-end October 2008. Medium term correlation coefficients ranged from -0.15 to -0.80.
"We have a range of quantitative techniques through which we both deconstruct and analyze portfolio performance." Anthony Limbrick, Pure Capital’s Chief Investment Officer said, "Once portfolio performance drivers have been specified, customized portfolio solutions are built using a series of proprietary building blocks, each of which is designed to address specific types of pay-offs".
In September the Paris-based EDHEC Risk and Asset Management Research Centre published a report on overlay hedging in fund of funds. The report, authored by David E. Kuenzi, Remy Chaudhuri and Zhihui Dong of Glenwood Capital investments concluded that “a hedging capability removes a significant constraint from FoFs” and “should have the net result of improving alpha, allowing for more unique and idiosyncratic portfolios, and for more creative structured products”.
Limbrick highlighted the benefits to a European fund of fund of implementing a Pure Bespoke solution - “if one were to use the Eurekahedge European fund of funds index as a fund of fund proxy, our Pure European BetaMatch program could have reduced fund of fund losses from almost 19% year-to-date to less than 1%. Not only would performance have been improved, but there would have also been more cash available for redemption needs. We also give our clients the choice of upside beta exposure if they require it”.
In response to a question regarding the type of client exposures hedged by the Pure Capital, Limbrick said the Pure Bespoke portfolio solutions typically address “pervasive equity beta exposures or potential gap risk issues but we do look forward to widening the approach to address a range of more exotic or dynamic exposures”.
11 Nov 2008
Growth in Alternative Investments Among Institutions and Financial Advisors Expected to Continue
Morningstar and Barron’s today released highlights of a recent national survey examining the perception and usage of alternative investments among institutions and financial advisors.
“Our survey found that both institutions and advisors want alternative investments that are liquid, transparent, and regulated like traditional investments,” said Steve Deutsch, director of separate accounts and collective investment trusts at Morningstar. "We conducted this survey during one of the worst market downturns in history, where traditional U.S. and international investments plummeted and almost no alternative investments provided safe haven."
"One particularly interesting survey result was that against this backdrop, the majority of both advisors and institutions still reported that they expected to increase usage of alternative investments in the future, and they believed alternative investments will continue to grow in importance versus traditional investments," Deutsch added. "Recent poor performance of alternatives has not caused advisors or institutions to question their usage."
Among the survey findings are that for institutions limited partnerships, including hedge funds, direct real estate, and private equity, are the most popular alternative vehicles for institutions.
Almost half of institutions surveyed allocate more than 10 percent of their portfolios to alternative investments, and nearly 20 percent allocate more than 25 percent of their portfolios to alternatives. Institutions generally expect their portfolio allocations to alternative investments, particularly hedge funds and private equity, to increase over the next five years. Close to a quarter (23 percent) of institutions expect to invest more than 25 percent of their portfolios into alternatives.
The survey shows that advisors are predominantly investing in alternative investments through liquid, regulated, and transparent vehicles like mutual funds and exchange-traded funds (ETFs), but they’re also employing other non-traditional investments with their clients, like oil and gas limited partnerships, non-traded Real Estate Investment Trusts (REITs), church bonds, and equipment leasing.
Among advisors who work with average individual investors, almost 80 percent use alternative investments with some clients. About 40 percent of advisors had more than half of their higher-net-worth clients in some alternative investments.
Morningstar and Barron’s conducted the Internet-based survey in October 2008; 252 institutions and 1,180 financial advisors participated. The complete survey results appear in the Nov. 10 issue of Barron’s.
“Our survey found that both institutions and advisors want alternative investments that are liquid, transparent, and regulated like traditional investments,” said Steve Deutsch, director of separate accounts and collective investment trusts at Morningstar. "We conducted this survey during one of the worst market downturns in history, where traditional U.S. and international investments plummeted and almost no alternative investments provided safe haven."
"One particularly interesting survey result was that against this backdrop, the majority of both advisors and institutions still reported that they expected to increase usage of alternative investments in the future, and they believed alternative investments will continue to grow in importance versus traditional investments," Deutsch added. "Recent poor performance of alternatives has not caused advisors or institutions to question their usage."
Among the survey findings are that for institutions limited partnerships, including hedge funds, direct real estate, and private equity, are the most popular alternative vehicles for institutions.
Almost half of institutions surveyed allocate more than 10 percent of their portfolios to alternative investments, and nearly 20 percent allocate more than 25 percent of their portfolios to alternatives. Institutions generally expect their portfolio allocations to alternative investments, particularly hedge funds and private equity, to increase over the next five years. Close to a quarter (23 percent) of institutions expect to invest more than 25 percent of their portfolios into alternatives.
The survey shows that advisors are predominantly investing in alternative investments through liquid, regulated, and transparent vehicles like mutual funds and exchange-traded funds (ETFs), but they’re also employing other non-traditional investments with their clients, like oil and gas limited partnerships, non-traded Real Estate Investment Trusts (REITs), church bonds, and equipment leasing.
Among advisors who work with average individual investors, almost 80 percent use alternative investments with some clients. About 40 percent of advisors had more than half of their higher-net-worth clients in some alternative investments.
Morningstar and Barron’s conducted the Internet-based survey in October 2008; 252 institutions and 1,180 financial advisors participated. The complete survey results appear in the Nov. 10 issue of Barron’s.
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