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31 Aug 2009

Bluenose Launches Capital Market Neutral Hedge Fund

Hedge fund manager, Bluenose Capital Management Ltd. is launching the Bluenose Capital Market Neutral Fund, aimed at accredited and professional investors.

Going live on October 1st, 2009, the new fund will employ a proprietary factor-based approach to trade highly liquid US & Canadian equities, according to a letter to investors obtained by HedgeCo.

"We strive to generate a 15% annual compound return with less volatility than the S&P/TSX and S&P500 with almost no correlation to the benchmarks," the fund manager said. "Our goal is to achieve absolute returns regardless of market conditions by combining US and Canadian equity market neutral and opportunistic trading strategies. Preservation of capital is of utmost importance." Bluenose said that potential investors should see an investment horizon of at least 5 years.

Bluenose is in September conducting meetings in 13 cities globaly from New York and Irvine to Milan and London.

Their projected timeline for the investment vehicles:

Years 1-3: Live trading of factor-based market neutral strategy: Bluenose Capital
Market Neutral Fund.
Estimated max capacity: $350M.

Years: 3-5: Deployment of statistical arbitrage strategy: Bluenose Star.
Estimated max capacity: $250M.

Year 7: Launch of the convertible arbitrage strategy: Bluenose Converts.
Estimated max capacity: $200M.

Bluenose Capital Ltd. is registered with the British Virgin Islands Financial Services Commission as a Professional Fund under the 1996 Mutual Funds Act.

29 Aug 2009

US Economic Policy as Boost for Hedge Funds - Report

US Economic policy continues to sway the global marketplace, says Global Hedge Fund Group Ltd. (GHF), this has been to the benefit of its hedge funds, and the life insurance settlement fund in particular.

Global Economic data is improving, GHF said, but is still being hampered by a weak housing market. Oil prices are rising again as tension in the Middle East continues. The Obama administration is tabling alternative energy initiatives. Healthcare reform has become a major issue, but many questions remain as to how far reform will go and what portions of the economy may be effected. Potential increased regulation within the financial industry and securities markets can be expected to have a wide-ranging impact on investment opportunities.

“All these factors underpin the continued trend of investors turning to our hedge funds. Our invested assets have grown more in the first half of 2009 than the last three years” said Jeremy Long, GHF Group Economic Analyst.

“There is so much uncertainty in the traditional equity markets. Brief periods of good news are still punctuated with minor corrections. Investors are asking tougher questions and looking for better solutions. These investors make up the majority of our new clients in the last two years.” Said Long.

28 Aug 2009

GAIM Launches Not-For-Profit Hedge Fund Series

Hedge fund events and information group, GAIM, has launched its first not-for-profit business breakfast briefing session.

In an effort to connect the alternative investment community with up to date information and contact with investors and peers in the industry, GAIM said the session would be the first in a series of breakfast seminars offering senior members of the hedge fund community the opportunity to stay connected between the GAIM flagship events that take place throughout the year.

The first meeting is scheduled for September 22, 2009 in New York at the Omni Berkshire, titled: 'Where the Market Opportunities Will Be and How to Avoid Pitfalls Putting Capital to Work in the Fall'

Speakers include; Ken Akoundi, Head of Pension Strategies, North America, Deutsch Bank Securities Inc, Greggory White, Trustee, Howard University, Jose F. Gonzalez-Heres, Managing Director, Fund of Hedge Funds portfolios and a member of the Investment Committee, Morgan Stanley Alternative Investment Partners.

27 Aug 2009

Rabbe Ekholm launches independent hedge fund replicator

Rabbe Ekholm, founder and CEO of True Beta LLC announced the launch of TrueBetaD and is holding a discussion on the importance of hedge fund replication strategies in New York September 15th.

"Institutional investors are reconsidering their traditional investment processes as hedge funds outperformed other asset classes last year, often by wide margins." Ekholm said, "At the same time investors now require greater transparency, risk control and liquidity from their hedge fund investments. They also increasingly want to distinguish between hedge fund alpha and beta."

Ekholm was until recently Chief Commercial Officer and a Member of the Management Board of Saxo Bank, prior to that he was a Managing Director at MSCI Barra, heading its Content Solutions Group.

"This demand is strengthening the important role replication strategies play in the investment process. These strategies allow investors access to hedge fund-like returns with cost effective fees, liquidity, transparency and without the headline risk of manager blow-ups or gates," he concluded.

The conference is scheduled to be held at the Walek & Associates Conference Room, 317 Madison Avenue @ 42nd Street, New York, NY.

TrueBeta LLC develops and markets quantitative financial strategies for institutional clients. Hedge fund replication is its lead offering. TrueBeta is based in Greenwich, Connecticut, USA.

26 Aug 2009

HedgeSphere Launches Software for Funds of Hedge Funds

Funds of hedge funds tech. provider Infonic AG, released the latest version of its software suite for FoHFs, HedgeSphere 4.3.

“For many funds of hedge funds, including those with complex portfolio structures, management and incentive fees are still calculated manually - a time consuming and error-prone process. This is an area of supreme client sensitivity, being the primary source of revenue for the management function and a major factor in liability and credibility in administration. HedgeSphere PAD 4.3 provides advanced automation to simplify and streamline the fee calculation process, providing near-real time availability, improving accuracy and transparency over fees and their attribution to investors,” said Thomas Furrer, Infonic AG’s CEO. “On the front and middle office side, HedgeSphere MO 4.3 provides tools to improve trading workflow and the exchange of information among portfolio managers, as well as enhanced equity exposure analysis.”

In this latest release, HedgeSphere provides enhanced capabilities for the calculation and processing of investor fees, including: in-advance fee calculations, automated fee crystallization and investor equalization tracking. In addition, HedgeSphere PAD now supports natural hedging and provides real-time views of cash available across accounting entities. Version 4.3 of HedgeSphere MO provides improved trading workflow and exchange of information among portfolio managers, as well as enhanced equity exposure analysis.

Headquartered in Switzerland, and with offices in Zug, Zurich and New York, Infonic AG is the provider of HedgeSphere, the leading product suite for operations of Funds of Hedge Funds. Its HedgeSphere product range debuted in 1999 and has been adopted by the largest and most innovative funds of hedge funds asset managers and administrators in the industry.

Hedge Fund Rankings Released

The Hedge Fund Journal’s Funds of Hedge Funds GLOBAL50, produced in association with Newedge Prime Brokerage Group, reports that minus a few exceptions, funds were happy to participate in the survey and submitted their assets under management figures as at 30th June 2009, which goes some way to prove that funds are taking the issue of transparency more seriously. Those funds that declined to participate have been given estimates based on a variety of data and industry sources.

In responding to the survey, many funds wanted to emphasise that liquidity terms were often the key to how a firm had been able to retain assets, the Journal reports. Those funds with more generous liquidity terms believed, rightly, that they were victims of what is now aptly-called the ‘ATM effect’.

The data shows that between 30th September 2008 and 30th June 2009, over $200 billion was withdrawn from the top 50 funds. Most funds lost an average of between 25% - 30% of their assets under management. However, UBS Alternative and Quantitative Investments remains in pole position, despite losing over 33% of its assets: at 30th June, 2009 assets under management stood at $31.4 billion (down from $46.6 billion in September 2008).

The top 50 funds are certainly managing less, but they are not out of the game. Smaller funds, of course, are facing an even tougher time. Chicago-based Hedge Fund Research (HFR) has reported that over 200 funds of hedge funds liquidated in 2009. This is a significant increase on the last quarter and represents an annual attrition rate of over 8%; nearly double the previous record set in Q4 2008. Falling assets and rising costs due to heightened due diligence and compliance demands from investors will continue to have a strong impact on the business viability of smaller funds.

Hitting rock bottom
The crisis has raised some important questions. Having grown at more than 20% a year between 2000 and 2008, the reversal in fortunes has come as a shock to many within the industry. At their peak, assets under management for funds of hedge funds reached $825 billion according to HFR, but by the end of Q2 2009, assets in the sector had dropped to $530 billion. Importantly, that marked a $5 billion gain from 31st March 2009 and may indicate that redemptions have bottomed out.

But is the fund of hedge funds industry a victim of circumstance or is it a flawed business model? The connection between the Madoff scandal and the industry was unfortunate, if not unfair, (although, some notable funds of hedge funds had invested with Madoff) and as investors sought to retrieve money where possible, it was inevitable that funds of hedge funds would be called upon. “What we have seen is the latest phase of an evolutionary process,” says Permal’s Roberto Giuffrida, Senior Vice President, Regional Director Europe. “Since hedge funds first emerged 60 years ago, there have been three waves of growth and decline, and we are fully expecting to see the fourth wave of growth over the next few years.”

But without doubt there are weaknesses within the model. One major area of weakness is the asset liability mismatch. Funds of hedge funds have traditionally managed their portfolios with a mismatch between portfolio liquidity and terms offered to investors. In the event of a sudden rush of redemptions, funds had a credit facility to bridge the two. In reality, this system proved to be wholly unreliable. Funds were unable to meet the redemption requests and were forced to impose gates.

Adapt or die
Issues such as alignment between investors and managers in terms of fees and investment objectives as well as transparency and the due diligence process are also areas where practices are being reviewed and changed. In the current environment investors are able to affect changes and do not have to settle for second best.

But despite the recriminations, in relative terms, hedge fund investment held up well during the crisis. For example, in 2008 the Hennessee Hedge Fund Index and the Barclay Hedge Index fell 22.42% and 21.63% respectively, while the S&P 500 slid 38.49% and the NASDAQ plunged 40.54%. “The fact that hedge fund indices outperformed the long only indices proves that hedge funds offer the downside protection. And in 2009 we are seeing investor allocations into hedge funds and funds of hedge funds,” explains Optima Managing Director, Graham Martin.

Data clearly shows the rate of redemptions is slowing. They were lower during Q1 2009 than in Q4 2008 according to Standard and Poor’s and they were lower still in the second quarter of 2009. HFR notes that in the last year, funds of hedge funds have dropped fees by three basis points to 1.25%. There is also evidence which suggests that funds with lower management fees outperformed the funds with higher fees, although the data on this is fragmentary. What’s more, liquidity profiles are improving: funds have reduced leverage and many are showing positive cash balances.

Could this be the nadir for the industry? HFR, BNY Mellon and Casey Quirk believe so. Many managers and not a few studies are projecting that assets will grow further in the second half of this year. And regardless of the industry setbacks, funds of funds will continue to be a major channel into single manager hedge funds. But Craig Stevenson, Senior Investment Consultant, Watson Wyatt believes that while funds of hedge funds will stage a comeback, they will face increased competition from single manager funds. He attributes this to the fact that before the crisis, funds of funds could offer capacity to those funds that were closed. The current state of the industry means that single managers are looking to build their own portfolio of institutional assets and virtually all funds, even the most successful, are now open.

Clearly, investors who have less resources and alternative asset experience will continue to invest through funds of hedge funds. “Allocating to hedge funds is a good way of diversifying portfolios and with funds of funds on a base fee for the foreseeable future they are as cheap as they have ever been,” says Stevenson. The business model may indeed be more sound than was thought six months ago since with time investors will return. But some funds that stretched the goodwill of investors may find it is difficult to be fully forgiven.

You can access the Global 50 by clicking on the link below:

The Global 50 is a listing of the largest funds of hedge funds groups ranked by AUM as at 30 June 2009.

Deutsche Bank Ranked Second in Hedge Fund Administration Survey

Deutsche Bank's Alternative Fund Services, part of the bank's Global Transaction Banking (GTB) division, has ranked second among top administrators in Global Custodian magazine’s 2009 Hedge Fund Administration Survey.

This is the first time Deutsche Bank has participated in the survey, which is published annually and includes responses from 1,370 clients of hedge fund administrators around the globe. It is intended to measure service quality and value in 12 categories including client service, fund accounting and middle office services, across a full range of fund characteristics such as size, strategy and location.

“In our first appearance in the Hedge Fund Administration Survey we are very pleased to have ranked second and scored highly in a range of categories,” said Christopher Nero, Managing Director and co-head of Alternative Fund Services within Global Transaction Banking.

In a write-up accompanying the results, Global Custodian commented, “(GTB) has a long pedigree in hedge fund administration too, with operations scattered across Cayman, Delaware, the Channel Islands, Dublin, Luxembourg, Mauritius and Singapore. But in January last year Deutsche transformed its presence in the industry by the acquisition of California based hedge fund administrator Hedgeworks. With staff in Boston and Cayman as well as the Golden State, Hedgeworks helped Deutsche double the size of its business. As it did for the prime brokerage business, the credit standing of the bank has attracted clients.”

Last month, Deutsche Bank announced that its Global Prime Finance business within its Global Markets division received 127 “Best in Class” and 16 “Top Rated and Commended” awards, the most among all global prime brokerage providers, in the Global Custodian 2009 Prime Brokerage Survey.

25 Aug 2009

People Moves: Gabrielle Guttman Leaves Hedge Fund To Launch Consulting Firm

Gabrielle Guttman launched connext consulting inc. after leaving Southridge LLC, where she served as the vice president of business development and marketing of the firm and its hedge funds.

She left the company to pursue the business venture and to launch her own customer base. According to Guttman, who is president of the firm, the new firm will employ an integrated and customized approach to successfully elevate their clients’ businesses to the next level through strategic introductions, business development, marketing and public/ investor relations. Their target market will include financial institutions, professional services firms, minority-owned businesses and not-for-profit organizations.

At Southridge, Gabrielle was responsible for hedge fund marketing, public/investor relations and marketing financial products to global public companies. She previously held Business Development and Marketing roles at Kroll Inc. and Grey Group Inc. Gabrielle's financial career began at Bear, Stearns & Co. Inc. as a Corporate Finance Analyst where she helped execute equity, debt and M&A transactions across a wide range of industries.

Gabrielle graduated Magna Cum Laude from Barnard College, Columbia University. Since 2003 she has held Board and Advisory positions with Barnard Business and Professional Women, a not-for-profit alumnae organization. Throughout her career, Gabrielle has been an active volunteer and currently holds leadership positions with notable not-for-profit and philanthropic organizations focused on the financial services industry, women's initiatives and children's development.

Offshore Hedge Fund Tax Shelter on the “White List”

West Palm Beach ( - The Organisation for Economic Cooperation and Development (OECD) added the Cayman Islands to its 'white list' of jurisdictions that implement international tax standards for investors such as hedge funds and other alternative investors.

Jeffrey Owens, Director of the OECD's Centre for Tax Policy and Administration, welcomed the signing of the Cayman Islands' twelfth Tax Information Exchange Agreement (TIEA) with New Zealand, on 13 August 2009 putting it “alongside other countries that have substantially implemented the internationally agreed tax standard.”

In response, the Cayman Islands Government summarized: “For over four decades the
Cayman Islands has steadily earned its place as a world-class international financial
services centre. The Cayman Islands Government sees the OECD's recognition as a
natural outcome of the country’s substantial commitment to uphold an equally worldclass
international cooperation regime in the exchange of tax information.”

Alex Akesson

Editor for

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

24 Aug 2009

Hedge Fund Brokerage Firm Updates Connectivity

Hedge fund prime broker, Newedge, has started using a Dubai Point of Presence (POP) connection to facilitate their access to the Dubai Gold & Commodity Exchange (DGCX). The new connection has high bandwidth and is more secure than an internet-based connection, the company said.

Amaury de Villemandy, CEO Newedge Europe & Middle East, commented on its fixed line capacity, saying, "Our investment in establishing direct connectivity to DGCX was based on the increased interest among our clients in capitalizing on the commodity and currency trading opportunities offered by the Exchange."

Newedge is a 50/50 joint venture between Societe Generale and Calyon. With a presence in 25 locations in 17 countries, Newedge primarily serves institutional clients, providing access to more than 85 exchanges.

21 Aug 2009

TMF Acquires Sydney Boutique Fund Mgr Kingsway Taitz

International financial services provider TMF Group has expanded into boutiqe and hedge funds in Australia through the acquisition of Sydney administrator, Kingsway Taitz Fund Administration Pty Ltd, (Kingsway Taitz).

Recognised as a leading provider of boutique and hedge fund administration services in the Asia‐Pacific region, Kingsway Taitz has been top ranked in its peer group for the past two years by the annual Global Custodian Hedge Fund Administrator Survey.

"The increasing demand for our services made it apparent that the next phase of growth required the backing of a global fund administrator with strong financial resources." Brian Taitz, managing director of Kingsway Taitz said “This transaction provides the opportunity to align with a like‐minded global fund administration company that shares our values and culture."

“This transaction brings together two highly successful companies – one global and one local with complementary skills and values, and a shared focus on client service and staff development," managing directors of TMF Eric Koolen and Catherine Caradus, said. TMF has over 175 fund administration clients.

Eric Koolen, who has 20 years of fund administration experience, will lead the combined organisation in Australia. Brian Taitz will continue to be involved on a day to day basis for up to six months to ensure a seamless integration of the two organisations. The company says there will be no immediate changes.

Kingsway Taitz has retained Capital Advice as its financial adviser in relation to this transaction.

20 Aug 2009

Man invests in Hong Kong-based Minerva macro fund

Man Investments’ seeding fund, RMF Global Emerging Managers, has completed its second incubation deal of the last two months, providing a cornerstone investment of $50 million for Hong Kong’s Minerva Macro Fund.

In July RMF GEM invested $50 million in the flagship product of 5:15 Capital Management, an unrelated fixed income arbitrage manager based in Connecticut.

Minerva is managed by Stanley Ku, who founded the Hong Kong office of hedge fund Fortress Investment Group and most recently managed $750 million for Fortress’ Drawbridge Global Macro Fund. Dorothy Lau, Minerva’s risk and business manager, formerly worked for JP Morgan and Goldman Sachs.

“Stanley Ku’s work at Fortress and Goldman Sachs has made him a very well respected money manager in Asia,” said Hans Hurschler, head of Man Investments’ hedge fund Ventures. “We believe that Minerva has the potential to generate solid, stable returns and that it may attract substantial assets.”

Minerva is a discretionary global macro fund, focused on Asia. It trades only highly liquid instruments such as interest rate or bond futures, foreign exchange forwards and equity index futures or sector ETFs. The entire portfolio is designed to be liquidated in 48 hours.

RBC Hedge 250 Index returned 2.10 percent in July 2009

RBC Capital Markets today reported that for the month of July 2009 the RBC Hedge 250 Index(R) had a net return of 2.10 percent. This brings the year-to-date return of the Index to 13.04 percent. These returns are estimated and will be finalized by the middle of next month. The return for June 2009 has been finalized at 0.33 percent.

Comprised of approximately 250 actual hedge funds, the RBC Hedge 250 Index is positioned as a diversified and representative investable index. The Universe on which the Index is based currently consists of 5,242 hedge funds (excludes funds of hedge funds) with aggregate assets under management of $952 billion.

Since its inception on July 1, 2005 through the end of June 2009, the RBC Hedge 250 Index has had an annualized net return of 2.56 percent. In comparison, over the same period, other investable indices have averaged -1.44 percent while non-investable indices have averaged 4.25 percent, according to information reported by the sponsors of those indices.

19 Aug 2009

Hedge Fund Atalaya Expands Investment and Marketing Team

Encouraged by a promising investment environment and accelerated investment pace, New York-based special opportunities fund, Atalaya Capital Management LP, today announced that it has expanded its team, adding three investment professionals and a marketing professional. 

“Recent positive changes in our target investment markets have prompted Atalaya to bolster our professional platform in order to capitalize on market conditions and new opportunities,” said Ivan Q. Zinn, Founding Partner & Chief Investment Officer.

Josh Ufberg joined as a Principal from Goldman Sachs’ Special Situations Group, while Rana Mitra and Alex Wang have joined the team responsible for the sourcing and purchase of private credit assets as Senior Associate and Associate, respectively. Ashley Fochtman joined the Firm as a Vice President and will be working in a business development capacity.  Previously, Ms. Fochtman worked in hedge fund marketing and at Goldman Sachs as an energy derivatives analyst.

Founded by Mr. Zinn in 2006, Atalaya focuses on the opportunistic purchase of senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity such as banks, commercial finance companies, and other financial and investment institutions.

About Atalaya Capital Management

Atalaya Capital Management is an alternative investment firm focused on investing in small and middle market credit opportunities.  Since inception in early 2006, the Firm has successfully invested over $1 billion through (1) the opportunistic purchase of private, senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity, and (2) proprietary 'new issue' credit investments including DIP loans and other senior secured financings.

18 Aug 2009

Salus Alpha Directional Market Funds Outperform

Salus Alpha (SA) announced that their fund, 'The Salus Alpha Directional Markets' stood out from its peers in the Managed Futures space due to its unique approach.

The majority of the managed futures funds, SA said, invests systematically according to computer based trading models. A computer model typically uses different indicators to identify trends on the global financial markets. These models can be characterized as long-term and short-term operating models.

Most managed futures funds use long-term trend following models; this is the reason why most of the famous managed futures funds have had significantly negative performance since the beginning of the year 2009: they didn’t recognize the trend reversal in time.

The Approach of the Salus Alpha Directional Markets Fund differs significantly from competitors – Model Risk is minimized.

"Unlike other firms we do not trust in technical analysis but we forecast futures prices with precision to identify trends. In contrast to other managed futures models the Salus Alpha Directional Markets controls risk on position, sector and portfolio level. Daily risk balancing positions the fund right in stormy weather or trend less markets." SA said.

17 Aug 2009

Alternative Investments Report: Identify Demand for Hedge Funds

Research and Markets has announced the addition of the "High Net Worth Alternative Investments" report to their offering.

The report identifies demand for hedge funds, capital protected funds, private equity funds and real estate funds from high net worths, The scope of the report covers France, Germany, Italy, Spain, UK, Nordic region, Belgium/Netherlands, Switzerland, Australia, China, India, Hong Kong, Singapore and Taiwan.

Includings hedge funds, capital protected funds, private equity funds and real estate funds (open ended and closed ended) thr peport shows the results of the Wealth Management Market Leaders survey of 280 wealth management companies worldwide, and on high net worths (those with more than $1m in onshore liquid assets)

HNW alternative investment asset allocations are expected to decline slightly in both Australia and France in the next two years, as high net worths reposition their portfolios. Real estate allocations and commodities allocations will decline among Australian HNWs while both hedge fund and derivative allocations will increase.

While British HNWs plan to increase their exposure to capital protected products and private equity funds, and their wealth managers will devote significant resources to the development of these product areas, they are failing to anticipate their clients demand for closed-ended real estate funds.

At the same time German wealth managers are focusing strongly on capital protected products which, while certainly in demand by most HNWs, will not see a significant increase in terms of portfolio allocations.

14 Aug 2009

OECD Puts Cayman Islands on Tax 'White List'

The Organisation for Economic Cooperation and Development (OECD) added the Cayman Islands to its ‘white list’ of jurisdictions that substantially implement international tax standards.

The Cayman Islands recognition came about after the country signed its twelfth Tax Information Exchange Agreement (TIEA) with New Zealand, on 13 August 2009.

“For over four decades the Cayman Islands has steadily earned its place as a world-class international financial services centre." Leader of Government Business/Premier Designate, the Honourable McKeeva Bush said, "The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information.”

Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcomed the signing which puts Cayman Islands “alongside other countries that have substantially implemented the internationally agreed tax standard.”

The Cayman Islands’ maintains 12 bilateral tax information arrangements with the following countries: Denmark, Faroe Islands, Finland, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Sweden, United Kingdom and the United States.

SEC Amends Rules to Issue More Subpoenas

Off-shore hedge fund law firm, Sadis & Goldberg LLP, sent out a letter to their clients announcing that the Securities and Exchange Commission (SEC) appears determined to issue more subpoenas and give people more incentives to cooperate with investigations as it works to enhance its oversight of the financial markets.

The letter, obtained by HedgeCo, explains, "Don't be surprised if you receive a subpoena or are contacted by the SEC." Daniel G. Viola, spokesperson for Sadis and Glodbrg, said, "The SEC has significantly increased its enforcement efforts since the recent discovery of certain high profile Ponzi schemes."

Effective August 11, 2009, the SEC has also made it easier for its staff attorneys to issue subpoenas. Thus, the SEC staff attorneys will no longer have to obtain formal approvals to issue subpoenas; instead, they will simply need approval from their senior supervisor.

"If you receive an inquiry letter or subpoena from the SEC, remain calm." Viola said, "This is not uncommon given the current regulatory climate. Above all, do not respond without first contacting legal counsel."

The The SEC generally has broad powers to conduct investigations of potential violations of the federal securities laws and often works with the Department of Justice in connection with joint proceedings, often known as "parallel proceedings."

The law firms Regulatory Practice Group consists of former SEC personnel and litigators with experience regarding civil and criminal proceedings.

Contact info:
Daniel G. Viola at 212.573.8038 (or
Christiaan Johnson-Green at 212.573.8169 (or

13 Aug 2009

Please join us for the HedgeCo's Summer Networking Event

The end of the summer season is quickly approaching, and August is the perfect time to enjoy what is left of warm, sunny evenings! The HedgeCo Summer Networking Event is a chance for investors, hedge fund managers, and other industry professionals to come together and enjoy a night of sharing ideas and meeting new contacts. Recognized as having the largest attendance for any type of event in the hedge fund industry, the HedgeCo Networking Events have quickly become the top destination for generating new business and meeting new industry contacts. Come celebrate the end of summer, contribute to Hedge Funds Care, eat, drink and network with other members of the alternative investments community.

Click here to RSVP for HedgeCo's Summer Networking Event

Aspen Social Club
157 W 47th St
New York, NY 10036

Date: August 19th, 2009
Time: 6-10 PM

Cash Bar

AIMA Launches Directive Centre Media Resoure

The Alternative Investment Management Association, (AIMA) has launched a Directive Centre on their website as part of an on-going campaign to have the European Commission's draft directive on Alternative Investment Fund Managers revised.

It is intended as a resource for journalists and members of the public and contains everything relevant for our campaign, including press releases, guidance notes, FAQs and other resource materials issued by AIMA; speeches and articles on the directive and links to relevant documents, including the European Commission’s directive and details of its legislative process; and a quotations section featuring a host of different figures expressing their concern about the directive.

Those quoted expressing concern or reported as doing so include pension funds and pension fund industry groups, European institutional investors, global banks, international law firms, commercial real estate groups, private equity, Swedish and UK ministers, Irish officials, the chair of the European Parliament’s ECON committee, the US Treasury, the UK Conservative party, the Mayor of London, the German Funds association, the Financial Times and the Economist, and even Robert Peston, Jacques de Larosière and Charles McCreevy.

People Moves: Two Hedge Fund Specialists Join Probitas Partners

Hedge Fund veterans James Coleman and Vincent Le Hodey have joined global alternative investment firm Probitas Partners at its London office.

“We are very excited to have James and Vincent join Probitas Partners. They are seasoned industry veterans and well respected in their market." Greg Hausler, a Founding Partner at Probitas Partners, commented, "The current global environment is as tough as it has ever been for capital raising and executing secondary mandates. The addition of James and Vincent to our London office advances our capabilities to provide the very best research, advice, fund offerings and liquidity management to European Limited Partners.”

Coleman, a Managing Director at Probitas Partners, will lead the firm's efforts in Europe by managing key Limited Partner relationships, sourcing new General Partner clients and facilitating secondary sales activities. Le Hodey, a Director at Probitas Partners, will focus his efforts on relationship management and secondary fund advisory for Probitas Partners’ Limited Partner client base. Before joining Probitas Partners, Coleman was a Partner at Deloitte and headed its Fund Placement Advisory Group. Le Hodey also was formerly with Deloitte’s Fund Placement Advisory Group as a Director.

"Probitas Partners provides Vincent and me with a dynamic global platform from which to serve our European clients. We believe accessing Probitas Partners' top-quality fund sponsors, its industry-leading market research, and its deep experience in the secondary advisory business will reward European Limited Partners." Coleman concluded.

12 Aug 2009

Bandon Flagship Strategy Gains Momentum, 5th Year Reached

Bandon Capital Management has reached it's 5th year for its hedge fund flagship investment strategy, 'Directional Interest Rate Strategy', (DIRS) producing annualized returns of +7.09% net of all fees, comparatively over the same time period the S&P 500 has lost -2.15%.

The strategy provides investors with absolute returns, uncorrelated with the equity and fixed income markets, by investing in the US Treasury Market using ETF’s or mutual funds and is available to non-accredited investors.

“We’re incredibly proud of this milestone. This is an investment area where there is a tremendous amount of product development activity and innovation." Bill Woodruff, Founder and Managing Principal said, "As advisors and their clients increasingly seek non-correlated, absolute return strategies we stand out for both the length and strength of our track record.”

Hedge Fund Models Need to Evolve- Deloitte Research

A new research paper by Deloitte LLC: "How Hedge Funds Are Becoming the Ultimate Networked Enterprise," focuses on how hedge fund methods of interacting with prime brokers and third-party administrators needs to be rethought in order to remain profitable as the roles of prime brokers and third-party administrators evolve.

"As investors demand increased transparency and operational risk management, hedge funds are faced with redefining their relationships with prime brokers and third-party administrators," Cary Stier, Deloitte's U.S. Asset Management Services leader explained.

"While attraction and retention of capital remains a top priority for fund managers, in today's market performance isn't the only bull's-eye a fund has to hit to accomplish these goals. Investors want assurance that the fund's operating model has taken into consideration the events of the last year and has adjusted accordingly. At the same time, prime brokers, administrators and custodians are looking for new ways to serve managers," said Adam Broun, Deloitte's Asset Management Services Consulting leader.

The report outlines five areas of focus for both prime brokers and third-party administrators:

Build the Middle-Office that Fits your Operating Strategy

Hedge funds need to determine their optimal operating strategy and factor in roles various service providers will play in providing necessary capabilities. Although most large firms will build their own middle-office, service offerings from fund administrators and custody players will prove to be compelling from both a cost and capability standpoint. Managing the network of service providers will require additional capabilities that the hedge funds will need to build and staff in-house.

Add Horsepower to Your Collateral Management

The multiprime model will only increase the need for improved collateral management. Some hedge funds will benefit by outsourcing to enterprise collateral management service providers or implementing vendor solutions to efficiently manage their collateral across various parties. In addition to spreading collateral across parties, independent valuation of illiquid assets, zero over-collateralization and optimal collateral composition will be the key focus areas.

Plan Risk Management

Risk management will see a balance of focus between market risk for investment strategies and counterparty risk. In a multiprime model, a single broker's risk report will show only a partial picture of the risk profile. Risk management will need to be a central function that aggregates positions across all providers. Take this opportunity to separate risk management from investment management.

Choose the Right Mix of Prime Brokers

The choice of prime brokers should be guided by aligning the fund manager's needs to the prime

broker's capabilities -- balance sheet strength, execution platform, geographic presence, flexible financing/margining options and product coverage.

Get the Most From Your Third-Party Administrator

Third-party administrators can help hedge funds outsource several middle- and back-office functions. With the increased complexity of the middle- and back-office, hedge funds should at least understand the range of services available from their administrators.

Implications for Prime Brokers

Prime brokers are experiencing a major shift in their business model. Their focus on developing deep relationships with a few hedge fund clients is no longer working in a multiprime environment, where risk diversification and access to capital is taking center stage. As lending stays constrained, prime brokers will be required to improve capabilities to deal with new clients and existing capabilities may lose favor among the hedge funds adopting the multiprime model.

Implications for Third-Party Administrators

Third-party administrators are being challenged by handling increased product complexities, technology scalability and international growth. While hedge funds outsource middle-offices and evaluate ways to reduce costs, third-party administrators will need to cut costs and potentially look into moving their back offices to cost-effective locations. Some may offer prime broker-like services to improve profitability and further increase competition in the market or go global; others will more closely align with custodians or consolidate for scale.

11 Aug 2009

2009 European Industry Leadership Award Goes To Paulson Director

Mina Gerowin, Managing Director of Paulson Europe, is this year's recipient of the 100 Women in Hedge Funds 2009 European Industry Leadership Award. In recognition of outstanding professional talent and business ethics, Ms. Gerowin will be presented with the award at a 100 Women in Hedge Funds fundraiser in London on October 7th, 2009, to benefit the UK education charity, SHINE.

"We are thrilled that Mina Gerowin will accept the 100 Women in Hedge Funds' European Industry Leadership Award," said Effie K. Datson, Chair of 100 Women in Hedge Funds’ London Board. "Mina has demonstrated the type of leadership and entrepreneurial acumen that has become synonymous with the industry; moreover, she is committed to contributing to the non profit activities that she is equally passionate about."

Mina Gerowin is Managing Director of Paulson Europe and a partner of Paulson & Co., specialising in European merger and event-driven investment, including distressed and restructuring investment and the risk arbitrage of both debt and equity. At Paulson she has led investments, including Stork and Ahold, and runs their large European positions.

Hedge Funds Try to Keep Pace With Equities Market

Hedge fund manager consultant, Hennessee Group LLC, reported that managers benefited as international equities rallied in July, while the unpredictability of government intervention continues to be one of the greatest concerns for hedge funds.

“We have expected greater scrutiny and new regulation for the financial industry, and specifically for hedge funds, in 2009,” commented Charles Gradante, Co-Founder of Hennessee Group. “In the energy markets, regulators are calling for hard position limits on financially settled energy contracts set by NYMEX, starting as soon as September. While the goal is to reduce speculation and volatility in the energy markets, this could potentially reduce transparency by shifting trading to over-the-counter markets and decrease liquidity. The unpredictability of government intervention continues to be one of the greatest concerns for hedge funds.”

"The deterioration of the economy has clearly slowed, however we continue to see positive signs that we are on the road to recovery, including increases in new home sales, new orders, and production." Gradante said, "I am still cautious and see emerging signs of ‘protectionism’ in the form of dramatic reductions in external lending by G-7 institutions, which could stifle a global economic recovery."

“Hedge funds underperformed in July, as we would expect, but were able to capture a good portion of the market rally in July,” said Lee Hennessee , Managing Principal of Hennessee Group. “Managers opened up their net exposures to participate, but also benefited from a better than expected earnings season. However, managers remain vigilant, knowing that the markets could crack and crack quickly. The VIX is at pre-crisis August 2008 levels and that worries many.”

The Hennessee Hedge Fund Index advanced +3.37% in July (+15.50% YTD), while the S&P 500 increased +7.41%.

10 Aug 2009

Charlotte Hedge Fund Forum Started by Headline Capital

Headline Capital Management, LLC is spearheading a series of capital introduction events showcasing the largest gathering of hedge fund managers from the Charlotte region. Aegis Funds Management, Afton Capital Management, Blackhawk Capital Management, Charlotte Global Advisors, Gorelick Brothers Capital, Keane Capital Management plus other hedge funds in the Charlotte region are also participating.

As the nation’s second largest banking center, Charlotte is also an attractive haven for hedge funds. Some of the nation’s most talented investment professionals relocated here to work for Bank of America and Wachovia, now a wholly-owned subsidiary and east coast headquarters for Wells Fargo. Many of these former bankers and traders stayed here to start their own hedge funds, especially after merger-related layoffs.

What is truly unique about the Charlotte Hedge Fund Forum is that in a highly competitive market, 7+ hedge fund managers from the same city have the foresight to jointly promoting a series of capital introduction events. “We’re still competitors. By working together, however, we can leverage our marketing dollars to attract more investors than we could alone,” says Mark McClanahan, the marketing director at Headline Capital Management.

The Charlotte Hedge Fund Forum provides more value than the traditional cap intro event by showcasing several hedge fund managers from the same city. The Charlotte showcase is more efficient for institutional investors with tight travel budgets who want to meet several managers at the same time. Wealthy families and high net worth individuals who are more comfortable investing in managers located closer to home, especially in this post-Madoff era, will also benefit from this Charlotte showcase. The real payoff is after the event when the investor needs to visit each hedge fund’s office for due diligence. Investors who attend the Charlotte Hedge Fund Forum will save time and money following up with several Charlotte-based managers during one trip.

The Charlotte Hedge Fund Forum is scheduled for September 23, 2009 at the historic Duke Mansion where tobacco baron James B. Duke founded The Duke Endowment. Mark Yusko, President and CIO of Morgan Creek Capital of Chapel Hill, North Carolina will deliver the Keynote Speech on “Alternative Thinking for Investments” during a complimentary luncheon. Afterwards, each hedge fund manager will deliver a formal 10-12 minute podium presentation and then meet with investors during a series of 30-minute, informal “meet the manager” roundtable discussions.

Hedge Fund Group Group Awarded Private Equity By Korean Sovereign Wealth Fund

Swiss-based alternative asset manager, Partners Group, has been selected as the manager for a private equity secondary mandate by the sovereign wealth fund Korea Investment Corporation (KIC).

KIC aims to profit from current dislocations in the secondary market which offers high discounts to net asset value and attractive return potential. The hedge fund firm has four offices located in the Asia-Pacific region, with Singapore being the second-largest office worldwide.

''We are very pleased to launch this secondary investment mandate with Partners
Group.'' Dong-Ik Lee, Head of the Alternative Investment Team at KIC, said, ''We believe that leveraging a very strong and experienced manager like Partners Group is the right way to explore and profit from this market.''

Steffen Meister, CEO of Partners Group, added, ''We are extremely pleased and honored to work with the Korea Investment Corporation, which we consider to be one of the most prestigious sovereign wealth funds around the world and one of the most sophisticated investors in Asia.''

Partners Group has over CHF 24 billion ($22 billion) in investment programs under management in private equity, private debt, private real estate, private infrastructure, absolute return strategies and listed alternatives.

7 Aug 2009

Declines In External Debt Elevates Concern For Global Recovery

Hennessee Group LLC, an adviser to hedge fund investors, voiced concern in early 2009 that the global financial crisis could enter a new and more dangerous phase, one that could push several international countries to the brink of failure and further hinder the global economic recovery.

Of particular concern to the Hennessee Group was the dramatic growth in external debt exposures of G7 and emerging countries and the increasing risk of another outright failure similar to that of Iceland when they had a debt to GDP ratio exceeding 900%. However, Hennessee Group research now indicates that this risk has begun to subside as the majority of countries have experienced a decline in their overall external debt exposure in recent months after reaching all time highs in 2008. That said, the Hennessee Group now believes this development could come at the cost of economic growth as the majority of the decline in external debt has been due to a dramatic drop off in bank lending to foreign institutions.

Charles Gradante, Co-Founder of the Hennessee Group, noted “While the decline in external debt, particularly for countries like the U.K., is a positive development and is likely to reduce the risk of another Iceland, we fear the primary driver behind the external debt reduction, specifically the drop off in external bank lending, could ultimately slow the pace of the global economic recovery.” The Hennessee Group believes it is essential to global growth that banks resume prudent external lending to businesses and individuals to further alleviate the financial crisis and promote economic growth.

In its February 2009 research paper, the Hennessee Group highlighted numerous countries, particularly in the euro zone, that appeared to be building uncomfortably high external debt levels in recent years relative to their economic output. The bright spot, at that time, was the low level of U.S. external debt to GDP output (84%).

The Netherlands reached an external debt to GDP ratio of approximately 328%, while Ireland had a similar exposure ratio to that of Iceland, a staggering 900%. The UK’s debt to GDP ratio reached 456% while Switzerland’s rose to 433%.

Gradante stated, “We believe the build up in external debt was both alarming and unsustainable, particularly for many European countries, and that if the trend continued we could be at risk of a major systemic event.” Gradante continued, “Since our initial analysis, the majority of countries have started to reduce external lending.

The U.K. has decreased its external debt by nearly $3.5 trillion from its high of $12.1 trillion in the first quarter of 2008. While we believe this is a positive development from the perspective that it alleviates our initial concern regarding another Iceland; a closer look at the underlying numbers has revealed a new concern. The vast majority of the reduction is due to a decline in external bank lending, which we believe will present additional challenges going forward. Of the $3.5 trillion decline in the U.K. external debt, $2 trillion can be attributed to a drop off in external bank lending. This could present additional challenges to an economic recovery.”

The Hennessee Group believes this new trend is not just a problem isolated to the U.K. but rather a worldwide issue. In a recent press release by the Bank for International Settlements, they stated, “After a relatively small change in total outstanding stocks in the third quarter, banks’ external claims shrank by 5.4% in the fourth quarter of 2008 ($1.8 trillion at constant exchange rates), to $31 trillion.” They added, “This was the largest reduction ever recorded.” The global economy may very well struggle to recover if the banks remain unwilling to increase external debt lending and may result in a resurrection of protectionism.

Miller Heads Up New NorthPoint Dallas Office

Atlanta based hedge fund prime brokerage firm, NorthPoint Trading Partners, LLC, has opened an office in Dallas, Texas, led by industry veteran Chip Miller.

Miller joins NorthPoint from Stadium Capital where he was head trader for 4 years. He will head up both the prime brokerage and the sales trading operations in the region. Miller will report directly to Michael DeJarnette, President of NorthPoint. 

“As we continue to expand our presence nationwide, we are very fortunate to have someone join our team who is as talented and experienced as Chip,” says Douglas Nelson, Chief Executive Officer of NorthPoint.

An industry veteran since 1993, Chip has held positions at Jefferies and Co., Clover Partners and Stadium Capital Management.  He is experienced in the trading, operational and regulatory aspects of the buy and sell side.

6 Aug 2009

People Moves: Global Fund Exchange Hires Hedge Fund Specialist

Alternative investment manager Global Fund Exchange has hired A. Michael D’Arpino as Director of Business Development, a new position at the firm. D'Arpino joins Global Fund Exchange from hedge fund manager Clinton Group, Inc.

"We are very excited to have Michael join our team," said Lauralouise Duffy, CEO, Global Fund Exchange Group. "He brings a wealth of hedge fund and Wall Street broker-dealer experience, outstanding leadership capabilities and the expert analytical, planning and communications skills that are so critically important to our investors."

Prior to joining Global Fund Exchange, D'Arpino was Managing Director, Clinton Group, Inc., where he held responsibility for all marketing functions including identifying and mitigating business and operational risks, compliance, business development and investor relations.

"I am pleased to join Global Fund Exchange, which is comprised of a unique group of industry veterans dedicated to providing a distinct approach to alternative and traditional energy opportunities globally through the Earth Wind & Fire Funds," said D’Arpino. "The firm’s strategy, using a multi-manager global macro approach to investing across the entire spectrum of energy and resources, represents a compelling opportunity for investors who seek access to the alternative energy and renewable resources sectors while offering the benefits of diversified and uncorrelated portfolios."

5 Aug 2009

Credit Suisse Alternative Index Replication Suggests a Positive Month for Hedge Funds

Long/Short Equity hedge funds continued to increase overall net exposures in July, enabling managers to capitalize on market upswings early in the month, according to Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse.

Dr. Drachman noted, ''As risk appetite returns to the market, many Long/Short Equity hedge fund managers have increased their overall net exposures, which enabled them to generate positive returns as equity markets bounced back early in July. Despite mid-month volatility, managers were able to preserve gains to finish up for the month. The Credit Suisse Long/Short Equity Replication Index was up 1.96% (net) for the month, while the Credit Suisse Global Macro Replication Index finished up 0.03% over the same period.”

AIR Indices seek to replicate the performance of major hedge fund strategies and enable investors to gain liquid, transparent insight into the Global Macro and Long/Short Equity sectors of the Credit Suisse/Tremont Hedge Fund Index. The AIR platform also offers inverse indices that seek to approximate short exposure to the aggregate returns of the universe of Long/Short Equity and Global Macro hedge fund managers.

Performances for the AIR Global Macro and Long/Short Equity Indices are calculated daily and shown net of a 1.15% per annum calculation fee.

4 Aug 2009

Hedge Fund Industry Assets Surge - HFR

Assets invested in the hedge fund industry increased by $100 billion in the second quarter of 2009, ending at $1.43 trillion, according to figures released by Hedge Fund Research (HFR). This is the first quarterly increase in assets since 2Q 08, when total industry capital peaked at $1.93 trillion.

The strong performance was led by strategies focusing on Emerging Markets, Convertible Arbitrage and Energy/Basic Materials. These three areas were among the weakest performers in 2008, showing the dramatic shift in market dynamics that has taken place this year.

Investors redeemed $42.8 billion from hedge funds in the second quarter, approximately 60% less than the $103 billion that was redeemed in 1Q 09 and an even more significant drop from the $152 billion that was withdrawn in 4Q 08.

Funds of Hedge Funds continued to experience a higher percentage of capital redemptions than single-manager strategies, as investors withdrew $33 billion from Funds of Hedge Funds in the second quarter. Total capital invested in hedge funds via Funds of Hedge Funds currently stands at $530 billion, 37 percent of the industry’s total capital and well below the $825 billion which were invested through Funds of Funds at their peak level in mid-2008.

HFR also reports that the number of hedge funds, including both single-manager and funds of funds, remained approximately flat during the quarter at just over 8,900. The performance of the HFRI Fund Weighted Composite is now available hedged into four foreign currencies, including Euro, British Pound Sterling, Swiss Franc and Japanese Yen.

"Reflecting the diverse drivers of hedge fund industry performance, recent gains have occurred in an environment in which developed equity markets have been essentially flat", Kenneth J. Heinz, President of Hedge Fund Research Inc, said. "Improved liquidity in credit markets contributed to narrowing some of the pricing dislocations that were created near the end of 2008, and the combination of improved credit markets, gains in emerging markets, and decreased risk aversion have driven broad-based gains in 2009."

Merlin Merger Provides Hedge Fund Managers Access to Network of Industry Experts

Hedge fund prime broker Merlin Securities and financial tech group Gerson Lehrman, announced an exclusive research partnership which will allow Merlin to provide emerging managers with access to Gerson Lehrman Group’snetwork of more than 200,000 experts. As a result of the partnership, Gerson Lehrman Group’s platform will be much more accessible to fund managers with assets of up to $150 million.

”We are very pleased to announce this exclusive partnership with Gerson Lehrman
Group,” Stephan Vermut, founder and managing partner of Merlin Securities, said,
”Gerson Lehrman Group is a trusted name and resource for generating alpha, and as
leaders in our respective markets, the combination of Gerson Lehrman Group’s worldrenowned expert network with Merlin’s prime, multi-prime and analytical solutions represents an extremely powerful offering for emerging managers.”

”The decision to offer services to emerging managers was a natural one,” Alexander Saint-Amand, president and chief executive officer of Gerson Lehrman Group, said, ”Like our current clients, emerging managers greatly value the sophisticated expertise offered through our global network. We are excited to be working with Merlin as our partner in providing Gerson Lehrman Group services to emerging managers.”

Merlin was recognized as the #1 prime broker for funds less than $1 billion by Alpha
magazine’s 2008 hedge fund service provider survey for the second year running. Merlin was also the top-ranked non-algorithmic-driven firm and second overall among brokerages trading NYSE stocks as measured by arrival price, according to the 2008 Elkins/McSherry annual transaction cost survey.

3 Aug 2009

Hedge Funds Strategy Demand Q2 2009: Brighton House Associates Q2 Report

During the first quarter, most alternative investors spent their time rebalancing their portfolios, redeeming with current managers, and waiting for the market to correct itself. This process freed up capital and uncovered gaps in portfolios, ultimately leading to a significant increase in alternative investment interest in the second quarter, according to a report by Brighton House Associates (BHA), a hedge fund and FoHF reserach firm.

Fixed-income strategies and volatility arbitrage were sought after, and experienced a significant boom in interest, as investors looked to take advantage of pricing inefficiencies created by rebounding markets, the report said. Investors’ concerns were evident by a push for greater liquidity, transparency, and access from managers of alternative funds. This shift manifested itself in conversations BHA analysts had with the global investor community.

Nearly a quarter of all real estate fund interest in Q2 came from wealth advisors. Consultants and government pension plans also showed significant interest. 48% of the real estate investors that BHA spoke were specifically targeting the commercial sector. In terms of strategy; most investors were looking opportunistically at any type of real estate exposure, and the majority of investors were focused on core and value-added strategies.

The second quarter of 2009 was very strong for alternative investment funds. Funds of hedge funds in particular saw an increase in investor interest after a disastrous Q1. In the first quarter, BHA received 108 mandates for funds of funds from investors; in the second quarter that number jumped over 40%. Several factors contributed to this change, including increased investor tolerance for lock-ups and longer redemption periods, increased investor interest in single-strategy funds of funds, and various investor types looking to increase their funds of funds exposure.

Many investors that spent the first quarter on the sidelines outlined active mandates while others committed capital to funds. Investors reported interest not only in funds with which they had long standing relationships, but also in new funds to which they were introduced in the past few months.

While many strategies realized increased interest during the quarter, volatility arbitrage and fixed income were two of the most intriguing, the report said. The rise in interest in volatility arbitrage is of little surprise. As the push for liquidity, focused investors on highly liquid, short-term trading-oriented funds. Investors also increasingly favored the relative stability and predictable returns that fixed-income funds provide. In the private equity space, venture capital showed signs of rebounding after a rough start to the year.

During the second quarter, 57% of investors profiled by BHA analysts maintained minimum asset requirements of $1 million to $200 million for potential funds, and 19% looking for funds with a minimum of $21 million to $75 million. During the second quarter, 57% of investors profiled by BHA analysts maintained minimum asset requirements of $1 million to $200 million for potential funds, and 19 percent looking for funds with a minimum of $21 million to $75 million.

Investors and managers are hoping to build on the momentum created during the second quarter and carry it forward into the second half of the year, the report concluded.

Brighton House Associates is an alternative investment research firm that speaks to investors across the globe about their current interest and activity in alternative investment funds. Brighton House works with a network of over 100 fund managers and assists in indentifying qualified investors for their internal marketing campaigns.

Each quarter, BHA analysts collect detailed profiles from more than 1,000 investors globaly that are actively making investments in hedge funds, private equity and real estate funds, and related funds of funds. These investors'(AUM) range from less than $100 million to more than $10 billion dedicated towards alternative investments.

Bandon Provides Smaller Investors Access To Flagship Hedge Fund Strategy

Hedge fund manager Bandon Capital Management, LLC, has made it’s flagship investment strategy, DIRS - Directional Interest Rate Strategy - available to investment advisors through Adhesion’s WealthADV UMA platform.

The flagship strategy, celebrating it’s 5th year anniversary at the end of this month, seeks to provide investors with absolute returns, uncorrelated with the equity and fixed income markets by investing in the US Treasury Market using ETF’s or mutual funds and is available to non-accredited investors.

Bandon is focused on delivering the attractive investment characteristics of alternative investing – absolute returns with low correlations – to the mass affluent and small institutional investors while minimizing or eliminating many of the structural negatives including high minimums, high fees, long lock ups and lack of liquidity and transparency.

Bill Woodruff, Founder and Managing Principal said “every day we hear from advisors sharing the frustration of their clients, whose account balances have been decimated and are not yet reflecting the economic recovery they keep hearing about. Increasingly, advisors are recognizing the benefit of allocating a portion of their portfolio to absolute return strategies - just like large institutional and ultra HNW investors – and are knocking on our door. We could not be more pleased with the opportunity to be included on the Adhesion platform which has many benefits including an open custody approach that enables advisors and their clients to access Bandon’s strategies through Schwab Institutional, Fidelity, TD Ameritrade and Pershing”.

Michael Stier, President and CEO of Adhesion said “We continue to see increasing demand for absolute return oriented, non market correlated strategies from our advisors and their clients, and could not be more pleased to have one of the leaders in this emerging area, join our platform”.