In a statement outlining the Cayman Islands financial position, the Hon. McKeeva Bush, Leader of Government Business/Premier Designate issued a statement regarding recent media coverage suggesting that the Cayman Islands is bankrupt, "we can confirm that these accusations are incorrect," she said.
Although Cayman’s two main industries, tourism and financial services, are significantly affected, "we are confident that the strength and resilience which has contributed to Cayman’s significant growth over the past 40 years will continue to serve the country well."
The Government’s efforts include the cutting of Government expenditure, customs duties, licence fees, and a number of other indirect taxes.
The government has also implemented an aggressive inward investment programme through private sector partnerships which will result in a number of new infrastructure projects and other developments. These will result in the region of $3 billion of inward investment in the short to medium term.
"In three weeks time we will be presenting our Budget which will continue to maintain Cayman’s sound financial stability. The Cayman Islands is well placed to take advantage of the global economic recovery and we are committed to continuing the success of our indirect tax system which has served the country so well over its history." McKeeva Bush concluded.
4 Sept 2009
Credit Suisse's AIR Shows Positive Month for Hedge Funds
Long/Short Equity hedge funds returned positive performance in August mainly as a result of the continued uptrend in equity markets, according to Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse.
"Following a strong rally in July, equity markets continued their upward trend in August, reaching highs not achieved since October 2008." Dr. Drachman noted, "Long/Short Equity hedge fund managers continued to increase their overall net exposures in order to benefit from market gains. Despite brief corrections due to a mid-month weak consumer sentiment report, managers were able to finish up for the month. The Credit Suisse Long/Short Equity Replication Index (“AIR Long/Short Equity Index”) was up 1.55% (net) for the month, while the Credit Suisse Global Macro Replication Index (“AIR Global Macro Index”) finished up 0.08% (net) 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.
"Following a strong rally in July, equity markets continued their upward trend in August, reaching highs not achieved since October 2008." Dr. Drachman noted, "Long/Short Equity hedge fund managers continued to increase their overall net exposures in order to benefit from market gains. Despite brief corrections due to a mid-month weak consumer sentiment report, managers were able to finish up for the month. The Credit Suisse Long/Short Equity Replication Index (“AIR Long/Short Equity Index”) was up 1.55% (net) for the month, while the Credit Suisse Global Macro Replication Index (“AIR Global Macro Index”) finished up 0.08% (net) 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.
3 Sept 2009
Global Climate Change Fund Launch
Alternative investment manager and advisor, Climate Change Capital, (CCC) has been appointed to manage a climate change fund for Dublin-domiciled UCITS platform, Russell OpenWorld.
The Global Climate Change Fund will be managed by Climate Change Capital's Global Equities' team of Paul Udall and Ronnie Lim.
The new fund will invest globally in sectors impacted by climate change. Udall and Lim, both Managing Directors at Climate Change Capital together have over 30 years' investment experience, and over 12 years' experience in managing specialist environmental equities. Prior to joining Climate Change Capital in 2007, both worked in the Sustainable Investment team at Morley Fund Management (now Aviva Global Investors), a top-ranked Socially Responsible Investing team.
"Climate Change Capital is uniquely positioned globally as an investment firm to benefit from the significant investment opportunities that exist in climate change," Shaun Mays, Chief Executive Officer at CCC, said, "Russell has a highly-regarded research and due diligence process, and we are pleased to be selected as the manager for one of their specialist, thematic funds."
The fund aims to provide significant excess returns above global equity markets by investing in a manager that takes high conviction active positions in companies that are affected by climate change. This is a relatively new area of investing, therefore, this fund enables investors to add an innovative and differentiated return stream to their portfolios.
With over US $1.5 billion under management as of April 2009, Climate Change Capital aims to provide attractive returns to investors, demonstrating the financial opportunity associated with the low carbon economy.
The Global Climate Change Fund will be managed by Climate Change Capital's Global Equities' team of Paul Udall and Ronnie Lim.
The new fund will invest globally in sectors impacted by climate change. Udall and Lim, both Managing Directors at Climate Change Capital together have over 30 years' investment experience, and over 12 years' experience in managing specialist environmental equities. Prior to joining Climate Change Capital in 2007, both worked in the Sustainable Investment team at Morley Fund Management (now Aviva Global Investors), a top-ranked Socially Responsible Investing team.
"Climate Change Capital is uniquely positioned globally as an investment firm to benefit from the significant investment opportunities that exist in climate change," Shaun Mays, Chief Executive Officer at CCC, said, "Russell has a highly-regarded research and due diligence process, and we are pleased to be selected as the manager for one of their specialist, thematic funds."
The fund aims to provide significant excess returns above global equity markets by investing in a manager that takes high conviction active positions in companies that are affected by climate change. This is a relatively new area of investing, therefore, this fund enables investors to add an innovative and differentiated return stream to their portfolios.
With over US $1.5 billion under management as of April 2009, Climate Change Capital aims to provide attractive returns to investors, demonstrating the financial opportunity associated with the low carbon economy.
The Securities and Exchange Commission Post-Madoff Reforms
The SEC has just released the information below regarding the actions it will take in the wake of the Madoff scandal. Pillsbury is sponsoring a program in San Francisco on this topic, October 8, 2009.
In the wake of the Madoff fraud, the SEC’s Office of the Inspector General launched an internal investigation in December 2008 to determine why the agency did not detect the scheme. While awaiting the report, the SEC has been taking decisive and comprehensive steps to reduce the chances that such frauds will occur or be undetected in the future.
Safeguarding Investors’ Assets: The SEC in May proposed two rules that would better protect clients of investment advisers from theft and abuse. The rules would provide assurance to these clients that their accounts contain the funds that their investment adviser and account statements say they contain. Among other things, the rules would encourage investment advisers to place their clients’ assets in the custody of an independent firm.
Surprise Exams: One proposal would require all investment advisers who control or have custody of their clients’ assets to hire an independent public accountant to conduct an annual “surprise exam” to verify those assets actually exist. This surprise examination would provide another set of eyes on the clients’ assets, thereby offering additional protection against the theft or misuse of funds.
Third Party Reviews: A second proposal would apply to investment advisers who do not use independent firms to maintain their clients’ assets. Such advisers would be required to obtain a third party written report assessing the safeguards that protect the clients’ assets. The report — prepared by an accountant registered and inspected by the Public Company Accounting Oversight Board — would, among other things, describe the controls that are in place to protect the assets, the tests performed on the controls, and the results of those tests. Existing rules make no distinction between an investment adviser whose affiliate holds its clients’ funds and an investment adviser that uses a truly independent custodian.
Revitalizing the Enforcement Division: Under the leadership of a new Enforcement Director, the SEC is restructuring the division to better ensure that it focuses on significant cases that will have a meaningful impact. The restructuring will reduce bureaucracy and speed up the enforcement process by removing a layer of management in the 1,100 person division. The newly structured division will include specialized units that will enable staff in those units to concentrate their expertise in focused areas and help detect patterns, links, trends and motives. In addition, the Division is streamlining internal processes to make investigative procedures more efficient.
Revamping the Handling of Complaints and Tips: In order to improve the handling of hundreds of thousands of complaints, tips, and referrals it receives each year, the SEC has contracted with Mitre, a federally funded research and development center, to help the agency revamp its processes across the agency. After reviewing and analyzing its intake procedures, the SEC is now beginning to improve upon its processes for collecting, recording, investigating, referring and tracking this information. Among other things, the agency is creating a centralized system for handling this information. Once the information and processes are centralized, the agency will apply risk analytics to better enable it to reveal links, trends, statistical deviations and patterns that might not be observable when each complaint is examined one at a time.
Advocating for a Whistleblower Program: The SEC has advocated for expanded authority from Congress to reward whistleblowers who bring forward substantial evidence to the agency about significant federal securities violations. In proposed legislation that the Chairman sent to Congress, a fund would be established to pay whistleblowers using money collected from wrongdoers that is not otherwise distributed to investors.
Conducting Risk-Based Examinations of Financial Firms: The SEC has dispatched its examiners to conduct a “sweep” of firms that present certain risk characteristics to ensure, among other things, that the clients’ assets in fact exist. Such risks include advisers whose clients’ assets are held with an affiliate, as opposed to an independent entity; hedge funds that seem to have “smooth” or outlier returns; firms that use an unknown auditor or no auditor at all; firms with a disciplinary history; and broker-dealers that sell an affiliate’s hedge fund or limited partnership.
Increasing Focus on Agency-Wide Risk Assessment: The SEC is assessing and improving the use of risk assessment techniques, agency-wide, to more proactively identify areas of risk to investors. The agency is increasing collaboration with third parties and other government agencies to identify firms or products that may pose risk to investors or markets. The agency is also improving our ability to monitor the industry — by identifying the data and information that financial firms would submit to the SEC — to allow it to better identify those particular firms that warrant a closer look by examiners and enforcement staff.
Improving Fraud Detection Techniques for Examiners: The SEC instituted measures to improve the ability of examiners to detect fraud and other types of violations. The measures include more rigorous reviews of firms before the examiners enter the premises, and a more complete exam guide that focuses not only on obvious signs of fraud but also more subtle signals that deserve closer inspection, such as a firm using an unknown accountant. The measures also include increased checks on outside entities to verify that assets actually exist there and expanded use of exams of an entire entity when firms have joint or dual registrants such as affiliated broker-dealers and investment advisers.
Recruiting Staff with Specialized Experience: The SEC is working to bring in new staff with diverse skill sets to expand its knowledge base and improve its ability to assess risk, conduct examinations, detect and investigate wrongdoing, and focus our priorities. Some initial examples included:
Senior Specialized Examiners: The agency is hiring new staffers to the examination unit who have specialized experience in areas such as trading, operations, portfolio management, options, compliance, valuation, new instruments and portfolio strategies, and forensic accounting.
Industry and Market Fellows Program: The agency is hiring new staffers who are highly-seasoned financial experts to keep pace with the practices of Wall Street and protect investors. These experts would provide other staffers with new information and perspectives to help them identify emerging issues and understand the ways the industry is changing.
Expanding and Targeting Training: The SEC is providing its staff with targeted training related to hedge funds and specialized products, derivatives and options, complex trading, and investigations of regulated entities. Additionally, the SEC is conducting programs to train hundreds of staffers to become Certified Fraud Examiners, and expanding the availability of programs for staffers to become Certified Financial Analysts.
Seeking More Resources: The SEC has been seeking additional funding to hire more examiners who can go into more financial firms to see whether they are in compliance with the law, as well as for more enforcement staff who can bring more enforcement cases when fraud and other violations of the law are found. In recent years, the SEC has not had adequate resources to oversee the securities industry. For example, the SEC has just over 400 people in its exam program to examine the more than 11,000 regulated investment advisers and 8,000 mutual funds.
Integrating Broker-Dealer and Investment Adviser Examinations: The New York Regional Office has adopted a protocol that will integrate examination teams to make sure people with the right skill sets are assigned to examinations. Under the new protocol, a single team of examiners, drawn from the broker-dealer and investment managements units, will jointly examine selected firms to ensure that the examination team includes those most expert in the subject of the exam. In addition, this initiative includes greater cross-training and coordination between broker-dealer and investment management staff on their examination plans.
Enhancing Licensing, Education and Oversight Regime for “Back-Office” Personnel: Working with senior SEC staff, FINRA has committed to establish a new system to enhance the oversight and professional requirements of personnel performing back-office functions at broker-dealer firms. “Back-office” personnel typically perform critical custody, accounting, transfer agency and account maintenance functions. They have an important role that must be performed with skill and integrity. Under the new regime, certain back-office personnel would be subject to licensing and education requirements as well as enhanced oversight. The new regime will further promote the qualifications and professionalism of those performing back office functions so that client accounts are better protected.
http://www.sec.gov/spotlight/secpostmadoffreforms.htm
Thanks to Jay B. Gould, Partner, Pillsbury Winthrop Shaw Pittman LLP.
In the wake of the Madoff fraud, the SEC’s Office of the Inspector General launched an internal investigation in December 2008 to determine why the agency did not detect the scheme. While awaiting the report, the SEC has been taking decisive and comprehensive steps to reduce the chances that such frauds will occur or be undetected in the future.
Safeguarding Investors’ Assets: The SEC in May proposed two rules that would better protect clients of investment advisers from theft and abuse. The rules would provide assurance to these clients that their accounts contain the funds that their investment adviser and account statements say they contain. Among other things, the rules would encourage investment advisers to place their clients’ assets in the custody of an independent firm.
Surprise Exams: One proposal would require all investment advisers who control or have custody of their clients’ assets to hire an independent public accountant to conduct an annual “surprise exam” to verify those assets actually exist. This surprise examination would provide another set of eyes on the clients’ assets, thereby offering additional protection against the theft or misuse of funds.
Third Party Reviews: A second proposal would apply to investment advisers who do not use independent firms to maintain their clients’ assets. Such advisers would be required to obtain a third party written report assessing the safeguards that protect the clients’ assets. The report — prepared by an accountant registered and inspected by the Public Company Accounting Oversight Board — would, among other things, describe the controls that are in place to protect the assets, the tests performed on the controls, and the results of those tests. Existing rules make no distinction between an investment adviser whose affiliate holds its clients’ funds and an investment adviser that uses a truly independent custodian.
Revitalizing the Enforcement Division: Under the leadership of a new Enforcement Director, the SEC is restructuring the division to better ensure that it focuses on significant cases that will have a meaningful impact. The restructuring will reduce bureaucracy and speed up the enforcement process by removing a layer of management in the 1,100 person division. The newly structured division will include specialized units that will enable staff in those units to concentrate their expertise in focused areas and help detect patterns, links, trends and motives. In addition, the Division is streamlining internal processes to make investigative procedures more efficient.
Revamping the Handling of Complaints and Tips: In order to improve the handling of hundreds of thousands of complaints, tips, and referrals it receives each year, the SEC has contracted with Mitre, a federally funded research and development center, to help the agency revamp its processes across the agency. After reviewing and analyzing its intake procedures, the SEC is now beginning to improve upon its processes for collecting, recording, investigating, referring and tracking this information. Among other things, the agency is creating a centralized system for handling this information. Once the information and processes are centralized, the agency will apply risk analytics to better enable it to reveal links, trends, statistical deviations and patterns that might not be observable when each complaint is examined one at a time.
Advocating for a Whistleblower Program: The SEC has advocated for expanded authority from Congress to reward whistleblowers who bring forward substantial evidence to the agency about significant federal securities violations. In proposed legislation that the Chairman sent to Congress, a fund would be established to pay whistleblowers using money collected from wrongdoers that is not otherwise distributed to investors.
Conducting Risk-Based Examinations of Financial Firms: The SEC has dispatched its examiners to conduct a “sweep” of firms that present certain risk characteristics to ensure, among other things, that the clients’ assets in fact exist. Such risks include advisers whose clients’ assets are held with an affiliate, as opposed to an independent entity; hedge funds that seem to have “smooth” or outlier returns; firms that use an unknown auditor or no auditor at all; firms with a disciplinary history; and broker-dealers that sell an affiliate’s hedge fund or limited partnership.
Increasing Focus on Agency-Wide Risk Assessment: The SEC is assessing and improving the use of risk assessment techniques, agency-wide, to more proactively identify areas of risk to investors. The agency is increasing collaboration with third parties and other government agencies to identify firms or products that may pose risk to investors or markets. The agency is also improving our ability to monitor the industry — by identifying the data and information that financial firms would submit to the SEC — to allow it to better identify those particular firms that warrant a closer look by examiners and enforcement staff.
Improving Fraud Detection Techniques for Examiners: The SEC instituted measures to improve the ability of examiners to detect fraud and other types of violations. The measures include more rigorous reviews of firms before the examiners enter the premises, and a more complete exam guide that focuses not only on obvious signs of fraud but also more subtle signals that deserve closer inspection, such as a firm using an unknown accountant. The measures also include increased checks on outside entities to verify that assets actually exist there and expanded use of exams of an entire entity when firms have joint or dual registrants such as affiliated broker-dealers and investment advisers.
Recruiting Staff with Specialized Experience: The SEC is working to bring in new staff with diverse skill sets to expand its knowledge base and improve its ability to assess risk, conduct examinations, detect and investigate wrongdoing, and focus our priorities. Some initial examples included:
Senior Specialized Examiners: The agency is hiring new staffers to the examination unit who have specialized experience in areas such as trading, operations, portfolio management, options, compliance, valuation, new instruments and portfolio strategies, and forensic accounting.
Industry and Market Fellows Program: The agency is hiring new staffers who are highly-seasoned financial experts to keep pace with the practices of Wall Street and protect investors. These experts would provide other staffers with new information and perspectives to help them identify emerging issues and understand the ways the industry is changing.
Expanding and Targeting Training: The SEC is providing its staff with targeted training related to hedge funds and specialized products, derivatives and options, complex trading, and investigations of regulated entities. Additionally, the SEC is conducting programs to train hundreds of staffers to become Certified Fraud Examiners, and expanding the availability of programs for staffers to become Certified Financial Analysts.
Seeking More Resources: The SEC has been seeking additional funding to hire more examiners who can go into more financial firms to see whether they are in compliance with the law, as well as for more enforcement staff who can bring more enforcement cases when fraud and other violations of the law are found. In recent years, the SEC has not had adequate resources to oversee the securities industry. For example, the SEC has just over 400 people in its exam program to examine the more than 11,000 regulated investment advisers and 8,000 mutual funds.
Integrating Broker-Dealer and Investment Adviser Examinations: The New York Regional Office has adopted a protocol that will integrate examination teams to make sure people with the right skill sets are assigned to examinations. Under the new protocol, a single team of examiners, drawn from the broker-dealer and investment managements units, will jointly examine selected firms to ensure that the examination team includes those most expert in the subject of the exam. In addition, this initiative includes greater cross-training and coordination between broker-dealer and investment management staff on their examination plans.
Enhancing Licensing, Education and Oversight Regime for “Back-Office” Personnel: Working with senior SEC staff, FINRA has committed to establish a new system to enhance the oversight and professional requirements of personnel performing back-office functions at broker-dealer firms. “Back-office” personnel typically perform critical custody, accounting, transfer agency and account maintenance functions. They have an important role that must be performed with skill and integrity. Under the new regime, certain back-office personnel would be subject to licensing and education requirements as well as enhanced oversight. The new regime will further promote the qualifications and professionalism of those performing back office functions so that client accounts are better protected.
http://www.sec.gov/spotlight/secpostmadoffreforms.htm
Thanks to Jay B. Gould, Partner, Pillsbury Winthrop Shaw Pittman LLP.
2 Sept 2009
Hedge Fund FII Named to Inc. 500/5000 List
Hedge fund firm, Financial Investments Inc. (FII), is to be recognized as one of the 500/5000 winners to be honored at a special event in Washington, the hedge fund will also be featured in the September issue of Inc. magazine.
The Inc. 500 celebrates the fastest-growing private companies in America. FII is a Herndon, Virginia-based Alternative financial investment management firm that has recently garnered national recognition for its growth and outstanding performance. Companies that qualify for the Inc. 500 must have a sales history of four or more years and annual revenues of at least $2 million in 2008.
FII has also been recognized by Virginia Business Magazine as a regional semi-finalist for its Small Business Success Story of the Year. In 2008 and 2009, the Virginia Chamber of Commerce also named FII to their "Fantastic 50" list of the state's 50 fastest growing companies.
"FII was founded in 1997, and has achieved annual revenue growth in excess of 40% each year for the last four years," said Craig Kendall, President and CEO. "Our customer focus and disciplined approach to investments with commodities, equities and equity indexes has resulted in consistent commendable returns for our institutional and private investors. Time and again we have exceeded returns to investors in excess of the S & P 500 during this year's volatile market," he added.
This is the second year that FII has been recognized in the Inc 500/5000 awards program. "FII continued with its growth and improvement of services all during the recent meltdown that the financial markets have experienced. A feat that we are most proud of", stated Kendall.
FII evolved from the original accounting firm of Kendall & Company, CPA's. In 2005, FII created Financial Commodity Investments (FCI) to provide products and services relating to commodity markets. As of July, 2009, the FCI products have generated net positive YTD returns in excess of 20% to investors. In August, 2009 the FCI alternative investment products were also recognized and ranked as one of the top Top Commodity Trading Advisors, CTA's for five year returns as tracked and reported by Barclays in their Barclay Managed Funds Report.
The Inc. 500 celebrates the fastest-growing private companies in America. FII is a Herndon, Virginia-based Alternative financial investment management firm that has recently garnered national recognition for its growth and outstanding performance. Companies that qualify for the Inc. 500 must have a sales history of four or more years and annual revenues of at least $2 million in 2008.
FII has also been recognized by Virginia Business Magazine as a regional semi-finalist for its Small Business Success Story of the Year. In 2008 and 2009, the Virginia Chamber of Commerce also named FII to their "Fantastic 50" list of the state's 50 fastest growing companies.
"FII was founded in 1997, and has achieved annual revenue growth in excess of 40% each year for the last four years," said Craig Kendall, President and CEO. "Our customer focus and disciplined approach to investments with commodities, equities and equity indexes has resulted in consistent commendable returns for our institutional and private investors. Time and again we have exceeded returns to investors in excess of the S & P 500 during this year's volatile market," he added.
This is the second year that FII has been recognized in the Inc 500/5000 awards program. "FII continued with its growth and improvement of services all during the recent meltdown that the financial markets have experienced. A feat that we are most proud of", stated Kendall.
FII evolved from the original accounting firm of Kendall & Company, CPA's. In 2005, FII created Financial Commodity Investments (FCI) to provide products and services relating to commodity markets. As of July, 2009, the FCI products have generated net positive YTD returns in excess of 20% to investors. In August, 2009 the FCI alternative investment products were also recognized and ranked as one of the top Top Commodity Trading Advisors, CTA's for five year returns as tracked and reported by Barclays in their Barclay Managed Funds Report.
Edinburgh Firm Expands Hedge Fund Business
Specialist active equity manager, Martin Currie Investment Management Limited, has expanded its global hedge fund arm with two senior hires, Alastair Barrie and Clayton Cheek.
Barrie joins in the newly created role of global head of hedge fund sales and Cheek joins as US head of hedge fund sales. Both bring with them extensive business development experience and join existing sales director, Mike Gibb.
Alastair pereviously worked at RBS where he was director of institutional business. In this new position he will be responsible for growing their global hedge fund business. Prior to RBS Alastair was director of global hedge fund sales and UK wholesale distribution at Henderson.
Clayton joins Martin Currie’s office in New York. Previously he worked for Man Investments in New York where he was head of institutional sales for the US. Prior to Man, he was managing director, head of client development Americas for Ivy Asset Management.
"We are thrilled that Alastair and Clayton are joining our successful and growing hedge fund business." Allan MacLeod, managing director of sales, marketing and client service at Martin Currie said, "Our hedge fund business is now over nine years old and has over US$1 billion under management across ten funds. It is a clear reflection on the quality of our business that we have been able to attract such high calibre professionals."
Martin Currie manages £10.7 billion ($18 billion) for clients worldwide, with $1.2 billion of that in absolute return funds.
Barrie joins in the newly created role of global head of hedge fund sales and Cheek joins as US head of hedge fund sales. Both bring with them extensive business development experience and join existing sales director, Mike Gibb.
Alastair pereviously worked at RBS where he was director of institutional business. In this new position he will be responsible for growing their global hedge fund business. Prior to RBS Alastair was director of global hedge fund sales and UK wholesale distribution at Henderson.
Clayton joins Martin Currie’s office in New York. Previously he worked for Man Investments in New York where he was head of institutional sales for the US. Prior to Man, he was managing director, head of client development Americas for Ivy Asset Management.
"We are thrilled that Alastair and Clayton are joining our successful and growing hedge fund business." Allan MacLeod, managing director of sales, marketing and client service at Martin Currie said, "Our hedge fund business is now over nine years old and has over US$1 billion under management across ten funds. It is a clear reflection on the quality of our business that we have been able to attract such high calibre professionals."
Martin Currie manages £10.7 billion ($18 billion) for clients worldwide, with $1.2 billion of that in absolute return funds.
1 Sept 2009
Castle Hall Alternatives Publishes White Paper on Hedge Fund Operational Failures
Hedge fund operational due diligence provider, Castle Hall Alternatives, published its latest White Paper, ‘From Manhattan to Madoff: the Causes and Lessons of Hedge Fund Operational Failure.’
The Paper’s analysis and findings are based on HedgeEvent, a comprehensive, web-based database of more than 300 operational events, now available to Castle Hall’s due diligence clients. HedgeEvent supplements HedgeDiligence, the firm’s existing client web portal.
Chris Addy, Castle Hall’s CEO, said “the colossal fraud perpetrated by Bernie Madoff, together with a number of other recent cases, has made investors acutely concerned by the risk of operational ‘blow ups’. However, there has been little systematic study of operational failure, meaning that investors have limited guidance as to the extent of this problem.”
“The creation of HedgeEvent, which has taken more than two years to compile, has enabled us to summarize key metrics related to hedge fund operational failure” said Addy. “From Manhattan to Madoff analyzes operational events by number, estimated loss, causal factor and by the strategy of the funds involved.”
HedgeEvent contains 327 cases of hedge fund operational failure through June 30, 2009. Madoff, with an estimated financial impact of $64 billion, is by far the largest; the remaining cases have an aggregate estimated financial impact of approximately $15 billion. Of the 327 operational events, 121 have an estimated impact of $10 million or more, and 31 of at least $100 million.
“While operational failures are material – Madoff spectacularly so – it does not seem that fraud is pervasive in the hedge fund industry” said Addy. “Investors should, however, be very focused on the lessons which can be learned from those hedge funds which did generate large losses. Many of these were well established firms which attracted capital from reputable investors.”
Across all Events, the most common causes of operational failure are theft and misappropriation followed by existence of assets (the manager claimed to own fake securities or operated a Ponzi scheme where reported assets did not exist). The most common strategies subject to operational failure are long / short equity followed by managed futures. It is notable that investors have traditionally viewed these strategies, holding largely exchange-traded securities, as straightforward with low operational risk.
The Paper’s analysis and findings are based on HedgeEvent, a comprehensive, web-based database of more than 300 operational events, now available to Castle Hall’s due diligence clients. HedgeEvent supplements HedgeDiligence, the firm’s existing client web portal.
Chris Addy, Castle Hall’s CEO, said “the colossal fraud perpetrated by Bernie Madoff, together with a number of other recent cases, has made investors acutely concerned by the risk of operational ‘blow ups’. However, there has been little systematic study of operational failure, meaning that investors have limited guidance as to the extent of this problem.”
“The creation of HedgeEvent, which has taken more than two years to compile, has enabled us to summarize key metrics related to hedge fund operational failure” said Addy. “From Manhattan to Madoff analyzes operational events by number, estimated loss, causal factor and by the strategy of the funds involved.”
HedgeEvent contains 327 cases of hedge fund operational failure through June 30, 2009. Madoff, with an estimated financial impact of $64 billion, is by far the largest; the remaining cases have an aggregate estimated financial impact of approximately $15 billion. Of the 327 operational events, 121 have an estimated impact of $10 million or more, and 31 of at least $100 million.
“While operational failures are material – Madoff spectacularly so – it does not seem that fraud is pervasive in the hedge fund industry” said Addy. “Investors should, however, be very focused on the lessons which can be learned from those hedge funds which did generate large losses. Many of these were well established firms which attracted capital from reputable investors.”
Across all Events, the most common causes of operational failure are theft and misappropriation followed by existence of assets (the manager claimed to own fake securities or operated a Ponzi scheme where reported assets did not exist). The most common strategies subject to operational failure are long / short equity followed by managed futures. It is notable that investors have traditionally viewed these strategies, holding largely exchange-traded securities, as straightforward with low operational risk.
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.
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.
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.
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.
"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.
“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:
http://www.thehedgefundjournal.com/magazine/200908/research/global-50-funds-of-hedge-funds.php
The Global 50 is a listing of the largest funds of hedge funds groups ranked by AUM as at 30 June 2009.
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:
http://www.thehedgefundjournal.com/magazine/200908/research/global-50-funds-of-hedge-funds.php
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.
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.
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 (HedgeCo.net) - 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
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!
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
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!
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.
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.
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.
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.
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.
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