Working with a group of 150 alternative investment managers, alternative investor research company, Brighton House Associates,(BHA) published its Quarterly Research Report highlighting insights and trends from this research that are most pertinent to industry professionals.
In summary of the report, the markets continued their downward trend in Q1, but the ability of hedge fund managers and alternative investors to adapt and position properly is what allows investment managers to produce returns in even the most difficult markets. Throughout the alternative industry there are still managers making money and using alpha to produce uncorrelated return streams, and investors are conscious of this and judiciously seeking investment with them, the report said.
Currently, many alternative investors are turning towards short-term CTA and global macro managers because they can nimbly navigate these uncertain markets while providing excellent liquidity terms, according to BHA. Investors are also increasingly interested in the relative stability and unique opportunities that private equity funds provide. Investors are looking for generalist funds that can provide them with diversified exposure and buyout funds that can take advantage of drastically undervalued opportunities.
In the real estate space, according to the report, investors are looking for managers that are aggressively taking advantage of the depressed real estate market to acquire undervalued assets.
Investors and managers are eagerly anticipating a market turnaround in the second half of 2009 that should lead to a significant influx of capital into alternative markets, BHA said. Investors that are currently sitting on high levels of cash said that they are actively researching the proper opportunities to put some of that capital to effective use in 2009.
BHA works directly with a wide range of investment managers on a daily basis. These managers range from hedge funds and funds of hedge funds to private equity, real estate, and venture capital funds. They also range in size and experience from emerging managers to some of the most established firms in the industry.
Each quarter, BHA analysts collect detailed profiles from more than 1,000 investors that are actively making investments in hedge funds, private equity and real estate funds, and related funds of funds. These investors are located all across the globe; their assets under management range from less than $100 million to more than $10 billion. The Q2 research is scheduled for release early next week.
28 Jul 2009
'Green' Hedge Fund of Funds Launched by Hedge Fund Veteran
Richard Bookbinder is launching TerraVerde Capital Partners LLC, one of the first “green” hedge fund of funds in the United States. Bookbinder is Managing Member of Bookbinder Capital Management, a New York-based hedge fund of funds, and a founding Principal of Sandler, O’Neill & Partners, L.P.
TerraVerde allocates capital to hedge funds devoted solely to reducing carbon emissions through clean-tech, renewable energy and other environmental sectors such as carbon trading, energy, solar, wind, water, reforestation and more.
“We’re in the early stages of a long-term, multi-generational growth cycle for carbon reduction strategies,” Bookbinder said. “TerraVerde is focused on those green strategies that are capitalizing on the business potential driven by the need for energy security and clean energy use.”
While managing one of Bookbinder Capital’s other hedge fund of funds, Bookbinder studied the emergence of investment opportunities in the “green” space. After an in-depth analysis of the industry, including meeting with hedge fund managers, green private equity funds, scientists, historians, and others, he came to the realization: investment funds with an environmental focus offer sufficient, attractive long-term investment opportunities to dedicate an entire strategy focused solely on the “green” space.
TerraVerde allocates capital to hedge funds devoted solely to reducing carbon emissions through clean-tech, renewable energy and other environmental sectors such as carbon trading, energy, solar, wind, water, reforestation and more.
“We’re in the early stages of a long-term, multi-generational growth cycle for carbon reduction strategies,” Bookbinder said. “TerraVerde is focused on those green strategies that are capitalizing on the business potential driven by the need for energy security and clean energy use.”
While managing one of Bookbinder Capital’s other hedge fund of funds, Bookbinder studied the emergence of investment opportunities in the “green” space. After an in-depth analysis of the industry, including meeting with hedge fund managers, green private equity funds, scientists, historians, and others, he came to the realization: investment funds with an environmental focus offer sufficient, attractive long-term investment opportunities to dedicate an entire strategy focused solely on the “green” space.
AIMA Warns Of Global Impact Of EU Hedge Fund Directive
The Alternative Investment Management Association (AIMA), the global hedge fund industry association, has warned that the European Commission’s draft directive on Alternative Investment Fund Managers would hit fund managers and investors around the world if enacted into European law.
The hedge fund assiciation argues that the directive creates potentially major difficulties for non-EU funds and/or non-EU managers in accessing the EU market. Marketing of funds by managers will only be allowed with a special marketing passport that the directive creates. However the directive also delays its introduction by three years and imposes significant obstacles (such as demonstrating regulatory and tax equivalence) to obtaining it.
AIMA suggests that the directive makes it so difficult and costly for non-EU funds and managers to access the EU market that it is clearly protectionist in effect, if not in intent. This will have major consequences for non-EU funds and managers (particularly in North America and Asia-Pacific) who will face a major loss of business in the EU. Investors will face loss of choice, increased costs and diminished returns.
Andrew Baker, CEO of AIMA, said, “Funds and managers outside the EU face being locked out of the EU market with extremely worrying consequences. Global industry centres such as the United States , Canada , Switzerland , Hong Kong , Singapore , Japan , Australia and South Africa , will all be affected by this. This is not just an internal EU matter.
This will also have a very significant impact on investors. EU investors, in particular, face a situation where they can use only EU asset managers of EU domiciled funds investing assets under an EU custodian. And international investors with EU funds or managers will find that their costs will go up and their returns will go down because of the restrictions and compliance costs the directive imposes.
We believe that the provisions of the draft directive with protectionist consequences will not only hit the industry worldwide but weaken the competitiveness of the EU in investment management and make the EU a less attractive destination for international investment. Naturally, we hope that it can be revised to avoid this.”
The hedge fund assiciation argues that the directive creates potentially major difficulties for non-EU funds and/or non-EU managers in accessing the EU market. Marketing of funds by managers will only be allowed with a special marketing passport that the directive creates. However the directive also delays its introduction by three years and imposes significant obstacles (such as demonstrating regulatory and tax equivalence) to obtaining it.
AIMA suggests that the directive makes it so difficult and costly for non-EU funds and managers to access the EU market that it is clearly protectionist in effect, if not in intent. This will have major consequences for non-EU funds and managers (particularly in North America and Asia-Pacific) who will face a major loss of business in the EU. Investors will face loss of choice, increased costs and diminished returns.
Andrew Baker, CEO of AIMA, said, “Funds and managers outside the EU face being locked out of the EU market with extremely worrying consequences. Global industry centres such as the United States , Canada , Switzerland , Hong Kong , Singapore , Japan , Australia and South Africa , will all be affected by this. This is not just an internal EU matter.
This will also have a very significant impact on investors. EU investors, in particular, face a situation where they can use only EU asset managers of EU domiciled funds investing assets under an EU custodian. And international investors with EU funds or managers will find that their costs will go up and their returns will go down because of the restrictions and compliance costs the directive imposes.
We believe that the provisions of the draft directive with protectionist consequences will not only hit the industry worldwide but weaken the competitiveness of the EU in investment management and make the EU a less attractive destination for international investment. Naturally, we hope that it can be revised to avoid this.”
SEC To Curtail Abusive Short Sales
The SEC announced several actions protecting against short sales and make more short sale information available to the public.
"Today's actions demonstrate the Commission's determination to address short selling abuses while at the same time increasing public disclosure of short selling activities that affect our markets," said SEC Chairman Mary Schapiro.
First, the Commission made permanent a rule, that seeks to reduce the potential for abusive "naked" short selling in the securities market. The new rule, Rule 204, requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale. The temporary rule, approved by the SEC in the fall of 2008, was set to expire on July 31.
Second, the Commission and its staff are working together with several self-regulatory organizations (SRO) to make short sale volume and transaction data available through the SRO Web sites. This effort will result in an increase over the amount of information presently required by another temporary rule, known as Temporary 10a-3T. That rule, which will expire on August 1, applies only to certain institutional money managers and does not require public disclosure.
Apart from these measures, the Commission is continuing to actively consider proposals on a short sale price test and circuit breaker restrictions.
Third, the Commission intends to hold a public roundtable on September 30 to discuss securities lending, pre-borrowing, and possible additional short sale disclosures. The roundtable will consider, among other topics, the potential impact of a program requiring short sellers to pre-borrow their securities, possibly on a pilot basis, and adding a short sale indicator to the tapes to which transactions are reported for exchange-listed securities.
Short selling often can play an important role, the SEC said, in the market for a variety of reasons, including contributing to efficient price discovery, mitigating market bubbles, increasing market liquidity, promoting capital formation, facilitating hedging and other risk management activities, and importantly, limiting upward market manipulations. There are, however, circumstances in which short selling can be used as a tool to manipulate the market.
"Today's actions demonstrate the Commission's determination to address short selling abuses while at the same time increasing public disclosure of short selling activities that affect our markets," said SEC Chairman Mary Schapiro.
First, the Commission made permanent a rule, that seeks to reduce the potential for abusive "naked" short selling in the securities market. The new rule, Rule 204, requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale. The temporary rule, approved by the SEC in the fall of 2008, was set to expire on July 31.
Second, the Commission and its staff are working together with several self-regulatory organizations (SRO) to make short sale volume and transaction data available through the SRO Web sites. This effort will result in an increase over the amount of information presently required by another temporary rule, known as Temporary 10a-3T. That rule, which will expire on August 1, applies only to certain institutional money managers and does not require public disclosure.
Apart from these measures, the Commission is continuing to actively consider proposals on a short sale price test and circuit breaker restrictions.
Third, the Commission intends to hold a public roundtable on September 30 to discuss securities lending, pre-borrowing, and possible additional short sale disclosures. The roundtable will consider, among other topics, the potential impact of a program requiring short sellers to pre-borrow their securities, possibly on a pilot basis, and adding a short sale indicator to the tapes to which transactions are reported for exchange-listed securities.
Short selling often can play an important role, the SEC said, in the market for a variety of reasons, including contributing to efficient price discovery, mitigating market bubbles, increasing market liquidity, promoting capital formation, facilitating hedging and other risk management activities, and importantly, limiting upward market manipulations. There are, however, circumstances in which short selling can be used as a tool to manipulate the market.
Subscribe to:
Posts (Atom)