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.
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.
London Hedge Fund Manager Alan Miller Makes a Comeback
According to a report in the Financial Times, London hedge fund manager Alan Miller has returned to the industry after a two-year absence by becoming a partner at SilverStreet Capital, a small London fund of hedge funds manager.
Miller, who co-founded New Star Asset Management with John Duffield in 2001, went on a sabbatical in 2006 following a bitter and highly public divorce battle. His absence from the UK fund manager was made permanent in February last year, the FT report said.
SilverStreet Capital is an asset management firm specialising in alternative investments, including hedge funds, private equity and property management.
Miller, who co-founded New Star Asset Management with John Duffield in 2001, went on a sabbatical in 2006 following a bitter and highly public divorce battle. His absence from the UK fund manager was made permanent in February last year, the FT report said.
SilverStreet Capital is an asset management firm specialising in alternative investments, including hedge funds, private equity and property management.
10 Nov 2008
OTC Hires European Hedge Fund Manager
OTC Valuations Limited, provider of independent derivatives valuation and risk reports for illiquid and hard-to-value securities, structured products, and exotic derivatives, has strengthened its team with the appointment of Dr. Paul Bergbusch to lead the organization’s technology function.
Paul comes to the OTC Val team from BlueCrest Capital Management, one of the largest hedge funds in Europe, he joins OTC Val as Chief Technology Officer, and will lead the effort to introduce the next generation of solutions further expanding the coverage for structured products and exotic derivatives under the OTC Val portfolio.
As an expert in financial derivatives and systems engineering, Dr. Bergbusch brings a wealth of data analysis, derivatives modeling and systems development experience for pricing and processing all derivatives products. He holds a Ph.D. in Experimental Particle Physics from the University of British Columbia.
"Before joining OTC Val I reviewed the market for independent derivatives valuations and realized that structured products and exotic derivatives are not being handled in a transparent and scalable way," Paul Bergbusch said, "The recent market turmoil and the push towards increasing regulation of the derivatives markets highlight the need for independent and transparent pricing."
Bob Sangha, COO, OTC Val, commented, "The fact that Paul joined OTC Val is also a great compliment to our service offering. His deep knowledge of data, models, and systems will enable OTC Val to deliver flexible and responsive solutions."
Paul comes to the OTC Val team from BlueCrest Capital Management, one of the largest hedge funds in Europe, he joins OTC Val as Chief Technology Officer, and will lead the effort to introduce the next generation of solutions further expanding the coverage for structured products and exotic derivatives under the OTC Val portfolio.
As an expert in financial derivatives and systems engineering, Dr. Bergbusch brings a wealth of data analysis, derivatives modeling and systems development experience for pricing and processing all derivatives products. He holds a Ph.D. in Experimental Particle Physics from the University of British Columbia.
"Before joining OTC Val I reviewed the market for independent derivatives valuations and realized that structured products and exotic derivatives are not being handled in a transparent and scalable way," Paul Bergbusch said, "The recent market turmoil and the push towards increasing regulation of the derivatives markets highlight the need for independent and transparent pricing."
Bob Sangha, COO, OTC Val, commented, "The fact that Paul joined OTC Val is also a great compliment to our service offering. His deep knowledge of data, models, and systems will enable OTC Val to deliver flexible and responsive solutions."
CNBC Arabiya Re-Launches With New Hedge Fund Programming Included
CNBC Arabiya is dedicating programming to arenas such as women in business, the environment, hedge funds and private equity, as the station moves to a more creative and interactive program schedule.
"We are experiencing an era of economic change for businesses, markets and funds in the Middle East." says Steven F. Hall, CEO, CNBC Arabiya. As the first show of its kind for CNBC Arabiya, a show called "Ma'ahonna" highlights and celebrates successful women within the GCC and Arab business arena. It includes interviews, profiles, insight and commentary through one-on-one interviews.
"Bil Akhdar" focuses on environmental issues impacting the business world, green industry, new sustainable initiatives and companies spearheading the green movement.
"Salat Al Bada'ael" reports the latest news on buyouts, venture capital, hedge funds and growth capital affecting the world of finance. The weekly show, Wednesdays at 8pm (KSA time), discusses the most pressing issues affecting the private equity marketplace.
There are also new shows on Shari'a-Compliant Finance and regulatory issues related to the various Securities & Commodities Authorities. Along with a new programming schedule, the CNBC Arabiya re-launch reveals a brand new studio layout with more capacity for live links. The re-designed CNBC Arabiya website will act as a genuine financial portal to cover stock markets, news alerts and breaking business news.
"CNBC Arabiya is the leader in Middle East business news and reaches over 50 million households through ArabSat & NileSat. We also encourage more viewer-led content via, our upcoming revamped website, and calls to our studios," says Mohammad Abdullah, CNBC Arabiya Executive Vice President.
"We are experiencing an era of economic change for businesses, markets and funds in the Middle East." says Steven F. Hall, CEO, CNBC Arabiya. As the first show of its kind for CNBC Arabiya, a show called "Ma'ahonna" highlights and celebrates successful women within the GCC and Arab business arena. It includes interviews, profiles, insight and commentary through one-on-one interviews.
"Bil Akhdar" focuses on environmental issues impacting the business world, green industry, new sustainable initiatives and companies spearheading the green movement.
"Salat Al Bada'ael" reports the latest news on buyouts, venture capital, hedge funds and growth capital affecting the world of finance. The weekly show, Wednesdays at 8pm (KSA time), discusses the most pressing issues affecting the private equity marketplace.
There are also new shows on Shari'a-Compliant Finance and regulatory issues related to the various Securities & Commodities Authorities. Along with a new programming schedule, the CNBC Arabiya re-launch reveals a brand new studio layout with more capacity for live links. The re-designed CNBC Arabiya website will act as a genuine financial portal to cover stock markets, news alerts and breaking business news.
"CNBC Arabiya is the leader in Middle East business news and reaches over 50 million households through ArabSat & NileSat. We also encourage more viewer-led content via, our upcoming revamped website, and calls to our studios," says Mohammad Abdullah, CNBC Arabiya Executive Vice President.
Hedge Fund Brotman Capital Shows Top Performance
Brotman Capital Partners LP, based in Boca Raton, Florida, has turned in the best performance Year to Date of a Market/Trend Timing Hedge Fund according to Barclays Hedge Fund Database.
Through October, 2008 the Fund is up over 14% net of fees. According to Dr. Randy Brotman, Chairman and CEO, the fund has remained in cash since the middle of August.
He states that “in our Trend Timing Fund, cash is an option, therefore a position.”
The Proprietary Trend Timing Model that Brotman Capital Management LLC employs dictates when the Fund should be long, short or in cash. “Be are comfortable to sit on the sidelines and wait for the trend-timing model to tell us when we will reenter the market, Brottman concluded.
The fund has a $100,000 minimum investment and charges a 2% management fee and a 20% incentive fee.
Through October, 2008 the Fund is up over 14% net of fees. According to Dr. Randy Brotman, Chairman and CEO, the fund has remained in cash since the middle of August.
He states that “in our Trend Timing Fund, cash is an option, therefore a position.”
The Proprietary Trend Timing Model that Brotman Capital Management LLC employs dictates when the Fund should be long, short or in cash. “Be are comfortable to sit on the sidelines and wait for the trend-timing model to tell us when we will reenter the market, Brottman concluded.
The fund has a $100,000 minimum investment and charges a 2% management fee and a 20% incentive fee.
6 Nov 2008
Salus Alpha offers a fund based on world's best hedge fund index to investors
Because of investors’ demand Salus Alpha decided to make the Salus Alpha Directional Market accessible as a fund. This way Salus Alpha continues to launch tracker funds for all hedge fund indices launched by Alternative-Index Ltd.
The Directional Markets Index (DMX) convinced investors this year with outstanding +53% YTD performance and above-average performance in the last years, the DMX
contrasts clearly with other Hedge Fund Indices.
Investors are able to achieve profits even in falling markets because of the widening of the product range Salus Alpha. It responds to investors’ needs in the current volatile market environment and offers a lager selection of funds with no correlation to bonds or equities.
The Salus Alpha Directional Markets employs directional trend following strategies in multiple time frames and markets. The funds objective is to achieve low to negative correlation to traditional longonly investments such as bonds or equities. The fund also tracks the Vienna Stock Exchange listed DMX.
Since inception of the calculation the DMX displays a performance of approximately 28.40% p.a. with a volatility of 17.88% p.a.
The subscription period for the Salus Alpha Directional Markets is from 5th November 2008 to 30th November 2008. During subscription period no sales fee will be charged.
The Directional Markets Index (DMX) convinced investors this year with outstanding +53% YTD performance and above-average performance in the last years, the DMX
contrasts clearly with other Hedge Fund Indices.
Investors are able to achieve profits even in falling markets because of the widening of the product range Salus Alpha. It responds to investors’ needs in the current volatile market environment and offers a lager selection of funds with no correlation to bonds or equities.
The Salus Alpha Directional Markets employs directional trend following strategies in multiple time frames and markets. The funds objective is to achieve low to negative correlation to traditional longonly investments such as bonds or equities. The fund also tracks the Vienna Stock Exchange listed DMX.
Since inception of the calculation the DMX displays a performance of approximately 28.40% p.a. with a volatility of 17.88% p.a.
The subscription period for the Salus Alpha Directional Markets is from 5th November 2008 to 30th November 2008. During subscription period no sales fee will be charged.
BIO Congratulates President-Elect Obama on His Presidential Election Victory
The following statement was issued by Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood following the U.S. elections:
"On behalf of the more than 1,200 members of the Biotechnology Industry Organization, I offer our congratulations to Senator Barack Obama on his election victory. We also offer our congratulations to the newly elected and returning members of Congress, governors and other elected officials across the United States.
"From health care to energy to climate change to environmental sustainability, President-elect Obama will enter office facing a daunting array of complex challenges threatening the well-being of our nation and the environmental health of our planet.
"Biotechnology is uniquely suited to help provide answers to these challenges. Biotechnology provides hope for millions of people suffering from debilitating diseases like cancer, H.I.V.-AIDS, Parkinson's and diabetes. By reducing the incidence of disease, we can dramatically reduce health care costs and help spur economic growth. Biotechnology provides the key to sustainable, renewable alternative fuels that increase our nation's energy security. And we develop crops that produce more food per acre while requiring less plowing, reducing fuel use, carbon dioxide emissions, and overall environmental impact.
"Biotechnology is one of the most promising sectors of America's burgeoning innovation economy. To continue our nation's global leadership in innovation and continue to fulfill the promise of biotechnology, we will work with President-elect Obama and the new Congress to ensure that we have the proper public policies that promote and facilitate continued innovation.
"We must maintain strong protections for intellectual property – the key to an innovation economy – while enhancing patent quality and the objectivity, predictability, and transparency of the patent system. We must increase resources for the federal Food and Drug Administration to enable the agency to keep pace with rapidly evolving biomedical science and make sound regulatory decisions in a timely and efficient manner. We must provide the tax and investment incentives that promote continued biotech innovation and help accelerate the commercialization of advanced biofuels technologies. And we must ensure the National Institutes of Health have the funding needed to sustain the public-private collaboration that is transforming biomedical discoveries into innovative treatments for patients. At the same time, we need the proper policies and incentives at the state and local level to help grow and nurture biotechnology research and product development to ensure America remains the world leader in biotechnology innovation.
"We look forward to working with President-elect Obama, the new Congress and public officials at all levels of government to achieve these goals and continue to build our nation's innovation economy. Together, we can implement the public policies necessary to help heal, fuel, feed and clean our nation.”
BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.
"On behalf of the more than 1,200 members of the Biotechnology Industry Organization, I offer our congratulations to Senator Barack Obama on his election victory. We also offer our congratulations to the newly elected and returning members of Congress, governors and other elected officials across the United States.
"From health care to energy to climate change to environmental sustainability, President-elect Obama will enter office facing a daunting array of complex challenges threatening the well-being of our nation and the environmental health of our planet.
"Biotechnology is uniquely suited to help provide answers to these challenges. Biotechnology provides hope for millions of people suffering from debilitating diseases like cancer, H.I.V.-AIDS, Parkinson's and diabetes. By reducing the incidence of disease, we can dramatically reduce health care costs and help spur economic growth. Biotechnology provides the key to sustainable, renewable alternative fuels that increase our nation's energy security. And we develop crops that produce more food per acre while requiring less plowing, reducing fuel use, carbon dioxide emissions, and overall environmental impact.
"Biotechnology is one of the most promising sectors of America's burgeoning innovation economy. To continue our nation's global leadership in innovation and continue to fulfill the promise of biotechnology, we will work with President-elect Obama and the new Congress to ensure that we have the proper public policies that promote and facilitate continued innovation.
"We must maintain strong protections for intellectual property – the key to an innovation economy – while enhancing patent quality and the objectivity, predictability, and transparency of the patent system. We must increase resources for the federal Food and Drug Administration to enable the agency to keep pace with rapidly evolving biomedical science and make sound regulatory decisions in a timely and efficient manner. We must provide the tax and investment incentives that promote continued biotech innovation and help accelerate the commercialization of advanced biofuels technologies. And we must ensure the National Institutes of Health have the funding needed to sustain the public-private collaboration that is transforming biomedical discoveries into innovative treatments for patients. At the same time, we need the proper policies and incentives at the state and local level to help grow and nurture biotechnology research and product development to ensure America remains the world leader in biotechnology innovation.
"We look forward to working with President-elect Obama, the new Congress and public officials at all levels of government to achieve these goals and continue to build our nation's innovation economy. Together, we can implement the public policies necessary to help heal, fuel, feed and clean our nation.”
BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.
5 Nov 2008
Former Citigroup Manager Joins RFA
Hedge fund IT provider, Richard Fleischman & Associates, announced that Colin Moe has joined the firm as account manager. The appointment furthers RFA's unprecedented growth and commitment to serve its client base of 400-plus alternative asset firms.
Increased demand for flexible technology solutions by RFA clients is being driven by turbulent market conditions and the need to stay nimble with IT infrastructure for expansion or contraction in the immediate future.
In this role, Colin will work with clients to assure optimized service levels and performance outcomes. As a focal point of contact, he will orchestrate the deep bench of resource available to RFA clients ensuring client satisfaction.
“Colin is an accomplished and respected industry professional with outstanding credentials and extensive prime brokerage expertise that our clients will immediately identify with,” said Don Previti, director of business development at RFA. “His important role as Strategic Account Manager will further reinforce RFA’s position as the vendor of choice for firms in the alternative asset space."
With more than ten years of experience, Colin joins RFA following long tenures in account management with Citigroup Prime and Bear Stearns Prime. He has a wide range of account experience, having worked in depth with hedge funds of differing trading strategies, investment styles and asset sizes, ranging from start-ups to multi-billion-dollar funds. His professional specializations encompass trading facilitation, technologies, implementation and training, and asset financing.
Established in 1990 and headquartered in New York, NY, Richard Fleischman & Associates is a trusted technology advisor to over 400+ hedge funds, private equity funds and fund of funds globally, offering both turnkey IT solutions and on-site and remote monitoring staffed 24/7/365.
Increased demand for flexible technology solutions by RFA clients is being driven by turbulent market conditions and the need to stay nimble with IT infrastructure for expansion or contraction in the immediate future.
In this role, Colin will work with clients to assure optimized service levels and performance outcomes. As a focal point of contact, he will orchestrate the deep bench of resource available to RFA clients ensuring client satisfaction.
“Colin is an accomplished and respected industry professional with outstanding credentials and extensive prime brokerage expertise that our clients will immediately identify with,” said Don Previti, director of business development at RFA. “His important role as Strategic Account Manager will further reinforce RFA’s position as the vendor of choice for firms in the alternative asset space."
With more than ten years of experience, Colin joins RFA following long tenures in account management with Citigroup Prime and Bear Stearns Prime. He has a wide range of account experience, having worked in depth with hedge funds of differing trading strategies, investment styles and asset sizes, ranging from start-ups to multi-billion-dollar funds. His professional specializations encompass trading facilitation, technologies, implementation and training, and asset financing.
Established in 1990 and headquartered in New York, NY, Richard Fleischman & Associates is a trusted technology advisor to over 400+ hedge funds, private equity funds and fund of funds globally, offering both turnkey IT solutions and on-site and remote monitoring staffed 24/7/365.
3 Nov 2008
Man's Investment Research Laboratory at Oxford Expands
A pioneering collaboration that brings together the best of the academic and finance worlds has been such a success that the venture has outgrown its premises, just a year after its establishment.
Man Group plc, one of the world's largest alternative investment companies, founded the Man Research Laboratory ("MRL"), in Oxford in September 2007. The role of MRL is to undertake commercial research projects for the various quantitative groups within Man, and in particular, for its wholly owned subsidiary fund manager AHL. Although quantitative techniques are widely used throughout Man, it is within AHL that they have been used extraordinarily successfully for more than twenty years.
The laboratory was established at the same time as the Oxford-Man Institute of Quantitative Finance ("OMI"), which is part of the University of Oxford. Man provides the principal funding (an initial commitment of GBP 13.75 million - $21.9 million) for the institute, which shares common facilities with the laboratory.
"The partnership between Man and the University of Oxford is unique," said Dr Anthony Ledford, a senior executive at AHL and Research Director of MRL. "While other hedge fund managers have opened their own, private research centres, none has done so in partnership with the University of Oxford itself."
"The aim for both the University and Man is to create a stimulating environment of research and innovation, where ideas flourish," Dr Ledford continues. "Practitioners from a wide spectrum of disciplines can bring their skills into collaboration, and learn from each other."
Staff numbers are expected to double over the coming year. OMI, which brings together academics from a wide spectrum of Oxford University departments, already has fourteen faculty members, another fourteen associate members and four permanent academic staff - three research fellows and the institute's Director - along with twelve higher-degree students.
"The collaboration has been a great success", Dr Ledford added. "It has exceeded the expectations of both the University and Man. Planned staffing levels in both the laboratory and the institute were met ahead of schedule, and the number of applications for positions has necessitated a search for larger premises."
Although the institute and laboratory are independent of each other and follow different research programmes, there is significant interaction between them. This has benefited both parties, and OMI is attracting significant international attention. In its first year, as well as a series of over one hundred seminars and presentations, it has hosted a symposium and two conferences - one of its guest speakers being a Nobel Prize winner.
MRL has already made significant commercial contributions to Man and AHL, which specialises in systematic automated trading. A new trading model - first conceived at the laboratory - which operates on high frequency data is now actively trading the global markets and providing new sources of enhanced investment opportunities. Another benefit is the magnetic effect the laboratory is having in attracting the next generation of top talent into Man from around the world.
Dr Ledford added: "The interaction between our Research Lab and the Institute has put us at the cutting edge in our field. Looking at what we've already achieved, we're really excited about the prospects for the future."
Man Group plc, one of the world's largest alternative investment companies, founded the Man Research Laboratory ("MRL"), in Oxford in September 2007. The role of MRL is to undertake commercial research projects for the various quantitative groups within Man, and in particular, for its wholly owned subsidiary fund manager AHL. Although quantitative techniques are widely used throughout Man, it is within AHL that they have been used extraordinarily successfully for more than twenty years.
The laboratory was established at the same time as the Oxford-Man Institute of Quantitative Finance ("OMI"), which is part of the University of Oxford. Man provides the principal funding (an initial commitment of GBP 13.75 million - $21.9 million) for the institute, which shares common facilities with the laboratory.
"The partnership between Man and the University of Oxford is unique," said Dr Anthony Ledford, a senior executive at AHL and Research Director of MRL. "While other hedge fund managers have opened their own, private research centres, none has done so in partnership with the University of Oxford itself."
"The aim for both the University and Man is to create a stimulating environment of research and innovation, where ideas flourish," Dr Ledford continues. "Practitioners from a wide spectrum of disciplines can bring their skills into collaboration, and learn from each other."
Staff numbers are expected to double over the coming year. OMI, which brings together academics from a wide spectrum of Oxford University departments, already has fourteen faculty members, another fourteen associate members and four permanent academic staff - three research fellows and the institute's Director - along with twelve higher-degree students.
"The collaboration has been a great success", Dr Ledford added. "It has exceeded the expectations of both the University and Man. Planned staffing levels in both the laboratory and the institute were met ahead of schedule, and the number of applications for positions has necessitated a search for larger premises."
Although the institute and laboratory are independent of each other and follow different research programmes, there is significant interaction between them. This has benefited both parties, and OMI is attracting significant international attention. In its first year, as well as a series of over one hundred seminars and presentations, it has hosted a symposium and two conferences - one of its guest speakers being a Nobel Prize winner.
MRL has already made significant commercial contributions to Man and AHL, which specialises in systematic automated trading. A new trading model - first conceived at the laboratory - which operates on high frequency data is now actively trading the global markets and providing new sources of enhanced investment opportunities. Another benefit is the magnetic effect the laboratory is having in attracting the next generation of top talent into Man from around the world.
Dr Ledford added: "The interaction between our Research Lab and the Institute has put us at the cutting edge in our field. Looking at what we've already achieved, we're really excited about the prospects for the future."
Hedge Fund Pentwater Suspends Redemptions
In a letter to investors, Hedge Fund manager Pentwater Capital announced that due to a number of unexpected redemption notices for year-end they have suspended redemptions and withdrawals, effective immediately.
"The entire hedge fund industry is bracing for large redemptions at year-end so as not to become forced sellers in the midst of a severe market crisis," says the Pentwater letter, "In turn, this has put additional pressure on hedge fund investors to find liquidity wherever they can, because they have to fund their own potential redemptions."
"If the Fund were to meet the year-end redemption requests we have received, the Fund would be forced to sell more of its investments into one of the worst markets since the great depression."
The fund has instead opted to create two new classes that have modified liquidity, fee and expense provisions as compared with the current classes. Investors will have the choice to transfer all or part of their investment into one or both of the new classes or remain in the existing classes.
"We will allow investors that wish to invest new capital to do so in one of these new classes and until further notice allow them to retain the benefit of their existing high water mark on any new investment. Further, investors that have already submitted a redemption notice will have a one-time option to rescind that notice, reduce the size of their redemption request, and/or choose to participate in one of our new classes."
Pentwater was not immediately available for comment.
"The entire hedge fund industry is bracing for large redemptions at year-end so as not to become forced sellers in the midst of a severe market crisis," says the Pentwater letter, "In turn, this has put additional pressure on hedge fund investors to find liquidity wherever they can, because they have to fund their own potential redemptions."
"If the Fund were to meet the year-end redemption requests we have received, the Fund would be forced to sell more of its investments into one of the worst markets since the great depression."
The fund has instead opted to create two new classes that have modified liquidity, fee and expense provisions as compared with the current classes. Investors will have the choice to transfer all or part of their investment into one or both of the new classes or remain in the existing classes.
"We will allow investors that wish to invest new capital to do so in one of these new classes and until further notice allow them to retain the benefit of their existing high water mark on any new investment. Further, investors that have already submitted a redemption notice will have a one-time option to rescind that notice, reduce the size of their redemption request, and/or choose to participate in one of our new classes."
Pentwater was not immediately available for comment.
The Central Bank of Bahrain Joins Hedge Fund Summit
West Palm Beach (HedgeCo.net) - The Central Bank of Bahrain will be participating in the Hedge Funds Review, Middle East Summit in Bahrain on November 11-12, 2008.
"As the funds industry continues to gather pace in the global arena, the CBB is determined to maintain its regulatory precedence in setting up the necessary initiatives to enable this development," said Abdul Rahman Al Baker, executive director, Financial Institutions Supervision, at the CBB who will be presenting an overview of the Hedge Funds Market and regulation in Bahrain on the first day of the event.
The two-day summit organised by Incisive Media will be addressed by Shaikh Ahmed bin Mohammed Al Khalifa, Minister of Finance and Tarek Sakka, CEO of Ajeej Capital.
This will be the second time the event will be held in Bahrain. More than 250 major investors from across the region are likely to attend the summit, along side leading fund managers from Mena, Europe and the US discussing innovative alternative investment strategies.
The sessions will highlight opinions from expert investment managers, and views from academics on the global credit crisis.
Alex Akesson
Editor for HedgeCo.Net
Email: alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
"As the funds industry continues to gather pace in the global arena, the CBB is determined to maintain its regulatory precedence in setting up the necessary initiatives to enable this development," said Abdul Rahman Al Baker, executive director, Financial Institutions Supervision, at the CBB who will be presenting an overview of the Hedge Funds Market and regulation in Bahrain on the first day of the event.The two-day summit organised by Incisive Media will be addressed by Shaikh Ahmed bin Mohammed Al Khalifa, Minister of Finance and Tarek Sakka, CEO of Ajeej Capital.
This will be the second time the event will be held in Bahrain. More than 250 major investors from across the region are likely to attend the summit, along side leading fund managers from Mena, Europe and the US discussing innovative alternative investment strategies.
The sessions will highlight opinions from expert investment managers, and views from academics on the global credit crisis.
Alex Akesson
Editor for HedgeCo.Net
Email: alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Polygon Concedes to British Energy, Winds Down Flagship Hedge Fund
Alternative investor, Polygon Investment Partners LLP has agreed not to further oppose the restructuring of the company by British Energy and other shareholders, in exchange the shareholders and British Energy have agreed to stop all outstanding legal actions against Polygon.
In the circumstances, Polygon believes that there is no commercial logic in proceeding with the EGM or supporting the proposed resolutions.
Polygon has also frozen redemptions on their $4bn flagship multi-strategy fund, Global Opportunities, while it unwinds the fund and returns money to investors.
Polygon Investment Partners LLP ("Polygon") is a global private investment firm based in London and New York, investing in a wide range of publicly traded securities. The firm currently has over $1.35 billion under management.
In the circumstances, Polygon believes that there is no commercial logic in proceeding with the EGM or supporting the proposed resolutions.
Polygon has also frozen redemptions on their $4bn flagship multi-strategy fund, Global Opportunities, while it unwinds the fund and returns money to investors.
Polygon Investment Partners LLP ("Polygon") is a global private investment firm based in London and New York, investing in a wide range of publicly traded securities. The firm currently has over $1.35 billion under management.
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