Noci Pictures Offers 100% Deductions For Alternative Investors

Noci Pictures Entertainment, A Chicago film finance and production company is offering an innovative way for high net worth investors, hedge funds and private equity groups to receive 100% deductions for film investments as well as state income tax credits.

Yuri Rutman’s Noci Pictures Entertainment is shooting a slate of films in Illinois using a hybrid of tax, finance, risk minimization and exit strategies that offer dollar for dollar Federal Tax Deductions and state income tax credits.

"I don’t know of any other alternative investment that can offer tax incentives, multiple exit strategies, as well as giving back to the local economy, while being involved with the moviemaking process, Rutman states, "that would add to the long
line of recent films either shot in Illinois or about to be shot, including “The Dark Knight”, the upcoming John Dillinger film with Johnny Depp and Christian Bale, as well as a lot of other Hollywood films."

The American Jobs Creation Act Of 2004, the 2004 enactment of Section 181 of the
Internal Revenue Code of 1986 (the "Code") marked an unprecedented change in U.S. policy toward the phenomenon known as "Runaway Production".

Runaway Production refers to a film or television production that leaves one state or country to be filmed in another purely for economic reasons. This movement occurs
because producers tend to film in the location where they can minimize production costs through tax incentives, cheaper labor.

An individual or company who makes an investment into Section 181 qualified productions can take a 100% deduction of their investment against their passive
income in the year their investment was made.

But since Section 181 also allows for all other recourse debt costs which are usually associated with film finance, a $10 million dollar film, where only $3.5 million is equity, an investor can deduct $3.5 million dollars against the $10 million, especially if the latter is mezzanine or gap finance. Plus, an additional 20% in Illinois tax credits can be generated.

Regarding Section 181 as an alternative investment for hedge funds that want to offset their tax liabilities, Rutman adds "That I am redefining film finance that is more serving to the community, local economies, and people who need jobs. Plus, I have so many risk minimization strategies in place and several exit scenarios, there are a lot of hedge and private equity funds who are now starting to feel a bit shafted with their film fund deals simple because they did not do their homework."

Special Situations Mergers & Acquisitions Launch

In response to client needs and evolving capital markets conditions, Duff & Phelps Corporation announced the formation of a Special Situations Mergers & Acquisitions practice.

This group formalizes Duff & Phelps' long-standing expertise advising middle market companies, lenders, and private equity sponsors on transactions occurring in challenging operating and financial environments.

According to Dow Jones, private equity fundraising designated specifically for distressed investments topped $48 billion in 2007, a 300% increase in funds raised over the previous year.

"Hedge funds, sponsors and institutions are amassing large pools of capital for distressed investing, and they are scouring the market for investment opportunities," said Russell Belinsky, Senior Managing Director of Restructuring and co-founder of Chanin Capital Partners, which was acquired by Duff & Phelps in November 2006.

"Meanwhile, the credit crunch is putting a strain on companies and their ability to borrow. As a result, some of these companies will look to sell underperforming operations or assets to raise capital. This puts our Special Situations M&A practice in an ideal position to leverage our relationships and find natural buyers for these assets."

The announcement of a Special Situations M&A practice formalizes an existing service offering of Duff & Phelps. The specific services offered include merger and acquisition advisory services in situations where the target company or its owner is significantly underperforming or experiencing financial distress, including out-of court divestitures and Chapter 11 Section 363 asset sales, and private capital raising for refinancing or recapitalization in times of financial distress.

PIPEs & Opportunities For Hedge Fund Managers

On Febuary 15th, 2008, a reduction in the Rule 144 holding period for restricted shares of public companies will take effect. The holding period, which is being shortened from one year to six months, will result in billions of shares from thousands of companies becoming eligible for public resale on that day.

A new report by Restricted Stock Partners examines 300 transactions and 258 issuers, showing 66% of the issuers highlighted as having greater than three months of their average daily trading volume eligible for sale on Febuary 15th.

The report is based on research on companies that issued unregistered securities in connection with Private Investment in Public Equity (PIPE) deals during the affected period. Hedge funds are the primary investors in the affected shares (many of which are from PIPEs).

37% of affected issuers will have greater than one year of their average daily volume eligible for sale and one-third of affected issuers in the Report will have greater than 25% of their market capitalization eligible for sale on the same day.

“Hundreds of companies may see share amounts equal to 100 or more times their average daily trading volume available for sale on Feb. 15,” according to Barry E. Silbert, founder and CEO of Restricted Stock Partners. “While it is difficult to predict what impact this will have on share prices, investors will certainly want to be familiar with the companies that may be affected.”

The RSTN has already attracted more than 400 members, including global financial institutions, hedge funds, mutual funds and other institutional investors, who collectively manage over $200 billion in assets.

2007's Most Generous Givers Generate Huge Numbers

BusinessWeek's annual ranking of 'Most Generous Givers' lists some of 2007's deepest pockets, although many of the donations also bought the renaming of the recipients projects.

Sixteen of the 50 philanthropists gave more than $100 million, while nine donated $200 million or more. The largest donation coming from Jon Huntsman, who gave over $700 million to the Huntsman Cancer Institute in Utah.

David Koch, a newcomer, donated $100 million for a cancer research center at Massachusetts Institute of Technology. Lorry Lokey gave a $74.5 million donation to the University of Oregon, bringing his total to $132 million so far.

George Soros, Bill and Melinda Gates, Michael and Susan Dell, were also high on the list of generous givers. T. Denny Sanford gave $400 million in a pledge to Sioux Valley Hospitals & Health System in South Dakota, renamed Sanford Health.

Robert Day gave $200 million to the Robert Day Scholars Program and Sandy and Joan Weill donated more than $300 million to Cornell University and its Weill Medical College, which focuses on stem cell research.

RCB Launches Indian Office For High Net Worth Individuals

RBC announced that it has entered the Indian market by opening its first office in the financial hub of Bandra Kurla, Mumbai, in order to provide wealth management services to high net worth individuals and provide capital market services including global debt funding to Indian banks, corporations and financial institutions.

"The strong growth of the Indian economy presents huge opportunities," said Gordon M. Nixon, RBC president and chief executive officer. "RBC is committed to expanding outside North America into areas where we can show competitive strength and India is a natural choice for our strategy in Asia. India is showing an increasing demand for areas in which RBC has competitive strengths, infrastructure and project finance, energy, metals and mining, structured products, currency and bond trading, and wealth management services."

Akhauri Sinha, country head, RBC India, will lead RBC's overall operations in India, while Dipendarra J. Singh will lead RBC's wealth management business with a focus on high net worth individuals, and Vikas Jambotkar will focus on providing RBC services to Indian financial institutions, as well as capital markets services to corporations.

With people from India comprising the second highest Asian immigrant population in Canada after China, RBC is now well positioned to help them invest back into India's buoyant economy. "Indo-Canadians have made and continue to make a huge contribution to the fabric of Canadian life. Their presence and cosmopolitan imprint on our cities, especially Toronto and Vancouver, have been profound. They form an important, indeed critical, link between India and Canada," continued Mr. Nixon.

RCB (The Royal Bank of Canada) serves more than 15 million personal, business, public sector and institutional clients throughout offices in Canada, the U.S. and 36 other countries.

Russia's Hedge Funds Show Stong Growth & Potential

Russia’s strong economic growth, rapidly expanding domestic market and increasing financial market liquidity has been fuel for rapidly expanding hedge funds and specialist investors in Russia and the former Soviet Union (FSU).

One such company is the Pharos Financial Group, which now runs three hedge funds, the Pharos Russia Fund, the Pharos Small Cap Fund, and the one-of-a-kind Pharos Gas Investment Fund.

Pharos has been Moscow based since 1997, making it one of one of the oldest Russian hedge funds, positioning it well for the new Russian market of 2008. The team has over 90 years of combined Russian and Western market experience. Their hedge fund strategy is long biased with shorting capability and has been stress tested with a track record featuring high returns with lower volatility.

Prior to founding Pharos Financial Group in 1997, CEO Peter Halloran was the principal contributor toward building the CS First Boston equity and fixed income brokerage businesses in Russia and the CIS.

He has been working with the development of the Russian capital markets since their inception in 1994, bringing more than $8 billion to the markets through debt, equity and private placements. Halloran has also acted as adviser to Soros Fund Management(the largest investor in Russia to date).

John J. Papesh, marketing director for Pharo said, "Since the Western public perception is different than the reality of the Russian market, I think it would be great to set the record straight when comparing Russia to that of Brazil, India and China, especially at a time when Russia is in favor to other EMs."

The Pharos Russia Fund has been in existence since 1997, offers daily liquidity and is a multi-sector Russia and FSU fund. It has a diverse portfolio of liquid equities, and can short and use derivatives. The fund is up 20% over the past 12 months.

The Pharos Gas Investment Fund is designed to take advantage of the transformation of the gas sector in Russia and Eurasia. As the only hedge fund focused on this sector, it invests in listed equity and offers monthly liquidity. The fund is up 21% over the past 12 months.

The Pharos Small Cap Fund invests in undervalued second and third tier companies and offers monthly liquidity. The fund is up 14% over the past 12 months. Two Pharos Funds have ranked in the Top 15 hedge funds globally by Bloomberg and in the Top 10 by Eurohedge.

Hedge Fund Finance Chief Sentenced To 20 Years

U.S. District Judge Colleen McMahon said of Daniel Marino, the former finance chief of the bankrupt hedge-fund firm Bayou Group LLC, "You are as much a career criminal as any mobster or any drug kingpin." The Judge then sentenced him to 20 years in prison.

His prison time will be followed by three years of supervised release. Restitution will be determined at a later date, but the judge said it likely will be in the amount of hundreds of millions of dollars.

Hedge fund founder Samuel Israel III and finance chief Daniel Marino pleaded guilty in 2005 to using fake results and a phony auditing firm. Investors lost approximately $400 million according to court papers, but the government put the loss at over $450 million.

The co-founder James G. Marquez was also implicated in the conspiracy and was sentenced to 51 months in prison. Israel is awaiting sentencing.

"I am truly sorry," Marino said.

SEC Comissioner Says Hedge Funds May Help Solve Market Turmoil

SEC Commissioner Paul Atkins recommended that European and US regulators should learn from each other’s approach to regulating hedge funds, particularly as the hedge fund industry became more international. Atkins said he also expects hedge funds to help solve the market turmoil surrounding sub-prime US mortgage loans.

The Comissioner resisted the agency’s efforts to become involved with hedge funds since he joined the SEC as a commissioner in 2002, the Republican has also questioned the agency’s practice of not allowing hedge funds to market themselves to the general public.

"Most importantly, we must remember that hedge funds are likely to be an important part of the solution to the sub-prime crisis," he told French business school Edhec that, as far as he was able to see, hedge funds could not be blamed for the sub-prime problems.

"Hedge funds and other shareholder activists may have created a negative impression by pursuing their own self-serving agenda at times. This problem may be exacerbated by 'empty voting' and similar practices that are based on decoupling voting rights from economic interests. This is why good disclosure is so important in this area." Atkins also warned that, while shareholder activists can play a valuable role in corporate governance, they will be acting in their own interests and these will not necessarily be the same as the interests of their fellow shareholders.

Indian Policymakers Looking At Hedge Funds To Neutralize Rupee Appreciation

India has been looking to hedge funds and loans since this year's decline began in industrial growth from 11% a year ago to 9.5% in the first half of 2007-08, coupled with a fall in the expansion of India's exports demanded the rationalisation of credit rates by the central banks.

The Federation of Indian Export Organisations president Ganesh Kumar Gupta requested India's policymakers to consider establishing a hedge fund to neutralize rupee appreciation along with an apportionment of low-cost dollar loans to exporters among small and medium enterprises.

"It seems that inflation has become the sole concern of the central bank," said V.N. Dhoot, president of the Associated Chambers of Commerce and Industry of India (Assocham), reacting to the central bank's monetary policy review.

He also expressed concern for the small and medium scale sector, which in the absence of funding from equity markets and competition from cheaper imports was bearing the maximum brunt of a demand slowdown and cost of funds.

Northern Trust FoHF's To Recieve Daily, Instead of Monthly Data

Northern Trust has announced the setup of a worldwide partnership with financial applications company youDevise, it will offer funds of hedge funds daily portfolio management data. Typically, funds of hedge funds ("FoHF") can only get this type of information from their administrators on a monthly basis and without nearly as much detail.

"The combined Northern Trust-HIP solution represents a tremendous step forward in management information systems for the US$1.5 trillion global fund of hedge funds industry," said Wilson Leech, head of Northern Trust's Global Fund Services group. He noted this development comes at a particularly crucial time for the industry as it faces increasing demand from institutional investors for more transparency, governance, and detailed reporting.

The HIP will be fully integrated onto Northern Trust's single, global technology platform so that FoHF clients can obtain daily information about their hedge fund holdings, current value, performance, liquidity, hedging, and a detailed breakdown of assets and transactions. The information will be accessible through Passport, Northern Trust's interactive web portal, which provides clients with secure access to account information and portfolio reports.

"As a result of this integration, funds of hedge funds will no longer have to run shadow accounting and will have online access to data which will have been fully reconciled against, and integrated with, the official month-end NAV(i)," said Peter Cherecwich, head of Global Product and Strategy for Northern Trust's asset servicing business. "This supports Northern Trust's drive to offer comprehensive asset servicing capabilities to the global fund of hedge funds industry."

President Bush' Economic Stimulus Package

Stephen Horan, CFA, head of private wealth for CFA Institute, commented today on the economic stimulus package proposed by President Bush and the U.S. House of Representatives.

“What’s interesting about this proposal is the yet-to-be-determined impact it will have on the soft housing market and the durable goods sector,” said Horan. “The more than $200,000 increase in the jumbo mortgage limits is significant because it might provide some refinancing opportunities to homeowners who are finding it difficult to pay their existing mortgage. Banks, knowing that they can possibly repackage these jumbo loans and sell them back to Fannie Mae or Freddie Mac, might now be willing to refinance at lower rates.”

Horan added that “when it comes to the impact consumer spending will have on sector performance we may possibly see improvements in the consumer non-durable sectors, such as retail. However, time will tell how this plays out.”

Hedge Fund Report

There are more than 8,100 hedge funds globally managing over $1 trillion in assets today. Speculative energy trading has a strong future, but it will not be the traditional utilities and energy merchants that will create and maturate that market.

The report concludes that energy trading will now be dominated by more sophisticated and well-capitalized financial players such as hedge funds and investment banks, as well as by multinational energy companies with a global footprint. Evidence of the fund's influence on oil markets has been the 55% growth in open interest on Nymex crude, heating oil, and gasoline contracts over last year and the more volatile intraday trading moving during recent months. These market drivers are bringing greater financialization and maturation to the energy complex

Other Topics covered in this report include:

Basics of Hedge Funds
Performance and Management Fees
Hedge Funds & Energy Trading
Energy Trading Exchanges
Leading Energy-related Hedge Funds

This reports sells for $497 and can be ordered at http://energybusinessreports.com/shop/item.asp?itemid=1458&affillink=EPRW20080123

About the Publisher: "Energy Hedge Funds" is published by Energy Business Reports (www.EnergyBusinessReports.com), an energy industry think tank and leading source for energy industry information and research products. Details on all reports can be found at http://energybusinessreports.com/shop/item.asp?itemid=1458&affillink=EPRW20080123

Six Asian FOHF Launches

3A SA, the hedge fund management division of Swiss banking group SYZ & CO, has launched six new sub-funds of its $1.3bn Luxembourg-domiciled umbrella fund SICAV, offering Asian and opportunistic fund of hedge fund strategies in US dollar, euro and Swiss franc versions.

The step is envisaged as a complement to an existing portfolio of hedge funds. The new funds are part of Alternative Capital Enhancement, an open-ended investment company (Sicav) structure that currently comprises 20 sub-funds representing various hedge fund strategies including multistrategy, arbitrage, long/short, macro and natural resources.

The surge in investment opportunities has prompted vigorous growth in the alternative investment industry in Asia, where some 1,200 hedge funds manage about $150bn in assets.

The ACE Opportunity Fund is currently invested in 17 hedge funds representing various distinct strategies: US economic slowdown (macro), rising default rate (credit), Russia/technology/gold (long/short equity), increased volatility in Asia (long volatility) and opportunistic managers.

Both new strategies are available in US dollar-, euro- and Swiss franc-denominated versions and in three share classes. Class A and B shares for private investors and discretionary asset managers require a minimum subscription of 1,000 and 10,000 dollars, euros or francs respectively, and carry a 1.5 per cent annual management fee, while Class C for institutional investors has a 5 million dollar, euro or franc minimum and a 1 per cent management fee. The performance fee for all three share classes is 7.5 per cent; all six sub-funds are open for subscription and redemption on a monthly basis.

The alternative management division of Syz & Co, 3A had total assets of more than $4bn at the end of last year.

Syz & Co specialises in asset management through three interconnected area of activity, high-level private banking offered by Banque Syz & Co, the Oyster range of investment funds and 3A as the group's alternative investment unit. The group manages CHF31bn in assets and employs 320 staff at its Geneva headquarters and offices in Zurich, Lugano, Locarno, London, Luxembourg, Nassau, Salzburg, Milan, Rome and Hong Kong.

Turkey Investment Fund Launch

Strateji Asset Management this week announced a newly launched equity hedge fund, the VV Madaus Strategy Turkey. The new fund is Euro based with a 50.000 mimimum investment($73.000), a 1.5% management fee and a 10% performance fee.

The Luxembourg based fund is registered for sales and marketing in Germany and Austria, with signed distribution agreements with eight major banks across Germany, Austria, Luxembourg, Switzerland and other countries.

Strateji was founded in Istanbul in 1995 and has approximately $85 million in assets under management. They have partnered with Berlin based ValVeri Invest GmbH, and Munich based Madaus Capital Partners to produce this fund.

Brazilian Hedge Fund Manager AFX Acquired by $20 Trillion NY Mellon Corporation

Hedge fund manager ARX Capital Management has been acquired by The Bank of New York Mellon Corporation.

The Brazilian hedge fund manager is headquartered in Rio de Janeiro, Brazil, and specialises in multi-strategy, long/short and long only investment strategies and has more than $2.8 billion in assets under management.

Founded in 2001, the company manages 20 equity and hedge funds, in domestic and offshore versions. ARX will be integrated with BNY Mellon Asset Management Brasil with the combined business becoming one of the leading asset managers in Brasil.

Jose Alberto Tovar, CEO of ARX Capital Management, will become the head of the integrated asset management business in Brazil. "We are already seeing new business as a result of the acquisition which is testament to our teams working successfully during integration." Tovar said.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. It has more than $20 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $11 trillion in outstanding debt.

Alex Akesson
Editor for HedgeCo.Net
Email: alex@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Emerging Markets Fund Of Hedge Funds Launched By Matrix

West Palm Beach (HedgeCo.Net)- Matrix announced the launch a new fund of hedge funds (FOHF), the Matrix Emerging Markets Index Fund. The FOHF is designed to allow participation in the upside of emerging markets, whilst reducing downside risk. The initial offering opens on the 28th of January through the 20th of February 2007.

The FOHF is being managed by Maxam Capital Management LLC, with approximately 40 underlying hedge funds, the portfolio will be broadly diversified across emerging market regions and asset classes.

According to the predicted launch portfolio of the new fund, back tested, the FOHF would have provided total returns of 305% but with a maximum drawdown of only 9.71% over the period from the beginning of 2000 to the end of November 2007.

"The portfolio will consist of around 40 Underlying hedge funds heavily diversified across the Far East, Eastern Europe, Latin America and the Middle East and will include equities, debt, distressed securities and currency managers, " Bridget Guerin, managing director of Matrix Money Management said, "The managers in the portfolio will be able to hedge out risk via short exposure and other techniques."

Hedge Fund Scam Artist to be Deported

Ayferafat Yalincak, also known as "Jackie Yalincak," and "Irene Kelly," age 50, has been ordered deported to her native Turkey. Her son, Hakan Yalincak, also known as "Hagen Yalincak," age 21, also a Turkish citizen, may also be deported after he completes his 3.5 year sentence, according to officials.

The mother and son team were charged in March of 2007 with operating a multi-million dollar investment hedge fund fraud scheme. According to documents filed with the Court and statements made in court, Ayferafat Yalincak and Hakan Yalincak solicited approximately $7 million from several investors for their fake hedge fund.

The conspiracy charge carried a maximum term of imprisonment of five years and a fine of up to $250,000. She completed her prison term in November after getting credit for serving more than 14 months in prison before her sentencing. She is now in the custody of federal immigration officials.

Prosecutors say Hakan Yalincak charmed his way into the exclusive world of Greenwich high finance by posing as an heir to a wealthy Turkish family. He moved counterfeit checks and brokered deals with a Kuwaiti financier. Ayferafet Yalincak told a federal judge last year that she attended meetings with investors and allowed her son to present her as a member of an exceedingly wealthy Turkish family who was going to invest millions in his hedge fund.

Prosecutors say Ayferafet Yalincak was responsible for an intended loss of $5.3 million and an actual loss of $3.9 million after some of the money was returned to investors.

Mutual Fund to Replicate Hedge Fund in Japan

BNP Paribas Securities announced plans to launch a mutual fund in Japan which will go after similar investment returns to those generated by hedge funds.

The mutual fund will target regional banks and other institutional investors replicating the structure and investment methods of hedge funds.

Japanese regional banks have begun to hold back on hedge fund investments since the requirements for new capital ratios mandate stricter assessment of credit risks for institutions. Since this move last year by the Bank for International Settlements, a growing number of overseas brokerages have begun offering mutual funds and other investments that replicate methods adopted by hedge funds but offer greater transparency.

A Canadian asset management company in which BNP Paribas holds a stake will oversee management of the fund. Because the fund invests in exchange-traded funds and bond futures, it offers higher liquidity and lower costs compared with individual hedge funds charging high fees, according to the Canadian firm.

Alternative Hedge Fund Website

Interesting site here at; Albourne Viilage.com. They have a Mayor, a Town Hall, and an entire village that you can become a resident of.

I like the set up and the alternate assumation of assignation, if you will. Anyhoo, touch base with me if you find any cool investing sites as differentially assimilated.

Also see; AdultVest.com (No connection to Alborne Village)

SMH Capital Fined $450 K for Improper Hedge Fund Sales

The Financial Industry Regulatory Authority (FINRA) announced that it has fined a Houston company, SMH Capital Inc., $450,000 for failing to adopt adequate procedures in its prime brokerage and soft dollar services to hedge funds.

As a result, SMH made improper payments of $325,000 in soft dollars to a hedge fund manager. The firm's failures also included drafting and distributing hedge fund sales materials that did not adequately disclose material investment risks to potential hedge fund investors.

In addition to the fine, SMH was ordered to retain an Independent Consultant to conduct a comprehensive review of the adequacy of the firm's policies, systems, procedures and training with regard to its hedge fund operation.
.
Susan L. Merrill, FINRA Executive Vice President and Chief of Enforcement said, "As broker-dealers increasingly provide services to hedge funds, they need to carefully tailor their supervisory systems and procedures to ensure they guard against conflicts of interest that result in securities law violations," Merrill said, "SMH's inadequate procedures resulted in the firm making soft dollar payments without a reasonable inquiry into red flags indicating the payments were improper."

FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States.

In 2006, members of the public used this service to conduct more than 4.7 million searches for existing brokers or firms and requested more than 207,000 reports in cases where disclosable information existed on a broker or firm.

Vesuvius Hedge Fund Launch

Magma Fund Advisors, Ltd announced the launch of their first hedge fund, the Cayman domiciled Vesuvius Investment Fund, which opened its doors in January, 2008.

The new hedge fund was formed for a select group of international investors, using approximately 10% of the funds gross assets to trade S&P 500 futures contracts based on trends forecasted by Xybemomics.

With Citigroup Global Markets as prime broker, the hedge fund has a 12 month lock up period, a 2% management fee and 20% as performance fee. Vesuvius has a minimum investment of $1,000,000.

The Vesuvius Investment Fund will also, as secondary investment strategy, achieve consistent long-term capital appreciation by using approximately 90% of the hedge fund's assets to hold cash, or other risk adverse positions, in order to offset the risk associated with trading futures.

Magma Fund Advisors was founded in 2007 to secure high quality investment returns for institutional investors and high net worth individuals by applying a diverse range of investment products.

Hedge Funds Not a `Lame Duck´ in Northern Rock Bid

Hedge funds SRM Global and RAB Capital over the weekend announced their reasons for blocking the takeover of Northern Rock, saying their bid is still a viable one.

"It is nothing like the "lame duck" that some would have you believe," said the hedge fund SRM in a statement. "Based on the company's stated guidance regarding its valuation, SRM believes that the company's book value is materially in excess of its current share price."

Major Northern Rock shareholder and fellow hedge fund RAB Capital said that it believes the bank will be able to repay the billions of pounds loaned to it by the Bank of England "with careful guidance and support of its shareholders".

SRM, with the backing of RAB Capital, is seeking support for shareholder resolutions next week that would prevent Northern Rock from selling itself or changing its capital structure without the support of shareholders.

Both SRM and RAB are in support of a bid by Olivant Partners for Northern Rock, rivaling a bid led by Richard Branson's Virgin Group.

"SRM believes that any sale of assets and/or business of the company at below its true value is detrimental to the company and to its shareholders and would inhibit a timely and complete repayment of the Bank of England facilities," the hedge fund said.

Northern Rock has been after a reasonable bid since it became a casualty in the global credit crisis this year.

Dow Jones Top Hedge Fund Trades of 2007

Dow Jones Hedge Fund Trades announced in a a press release today the annual list of the best and boldest hedge fund moves.

Among the top hedge fund trades were two deals by Atticus Management, which resulted in a collective profit of nearly $1.2 billion for the firm. All told, the "Big 10" hedge fund trades garnered profits of more than $3 billion for their respective investors.

Top Trade #1: Freeport McMoran Copper & Gold

Firm: Atticus Management

Profit: $800 million

The New York-based hedge fund hit the mother lode for the second year in the row, scoring paper gains of at least $800 million through its holding in the mining giant.

Top Trade #2: MBIA Inc., Ambac Financial

Firm: Pershing Square Capital Management

Profit: $500+ million

William Ackman's longtime gamble that bond insurance companies would run into trouble finally paid off this year as mortgage loans to high-risk borrowers started going bad and credit markets stumbled.

Top Trade #3: Foster Wheeler

Firm: Tontine Partners

Profit: $426 million

Sage investments in engineering and construction companies helped cushion the Greenwich, Conn.-based firm's losses in finance and housing.

Top Trade #4: Union Pacific, Other U.S. Railroads

Firm: Atticus Management

Profit: $387 million

A counterintuitive bet in a sector that typically slows down as an economic cycle peaks paid off handsomely for Timothy Barakett's shop. On top of paper and actual gains, Atticus made more than $20 million in dividend earnings on its railroad holdings.

Top Trade #5: First Solar

Firm: Maverick Capital

Profit: $350+ million

After a stormy 2006, Maverick rebounded in 2007 thanks to its investments in solar and alternative energy. First Solar was one of the sector's hottest performers.

Top Trade #6: Crown Castle International, American Tower

Firm: Glenview Capital Management

Profit: $319 million

Larry Robbins' New York-based hedge fund got all the right signals when it targeted the wireless towers sector. The trades crowned a successful year that saw the firm up 24%.

Top Trade #7: CF Industries

Firm: Dawson-Herman Capital Management

Profit: $160 million

Ethanol companies suffered this year, but taking a long view of the biofuels sector helped the New York-based firm cultivate a neat return from the fertilizer company.

Top Trade #8: Onyx Pharmaceuticals

Firm: Meditor Capital Management

Profit: $155 million

Having booked some profits in Onyx at the beginning of the year, the U.K.- based firm held on to the company's shares to benefit from a further jump when its cancer drug beat analysts' estimates.

Top Trade #9: Chipotle Mexican Grill

Firm: Tremblant Capital Group

Profit: $95 million

When other firms were asking for the check, Brett Barakett went back for seconds in this fast-food chain that promises healthy fare and delivered a healthy profit for the $4 billion-plus firm.

Top Trade #10: United Therapeutics Corp.

Firm: Shunway Capital Partners

Profit: $73 million

The New York-based firm gradually increased its stake in United Therapeutics during the year, gaining big-time on good news about the company's pulmonary hypertension drug.

To ensure the accuracy of this collection to top trades, Dow Jones Hedge Fund Trades only included trades that were verified directly with fund managers or through securities filings.

Blackstone and Citadel looking at stakes in Australia

The Australian Financial Review reported that US hedge funds Blackstone and Citadel have both flown teams into Australia to discuss buying a stake in troubled shopping centre owner Centro Properties Group. Australian institutions including AMP, Colonial First State and listed property group DB RREEF Trust have also expressed interest in investing in the group, the newspaper said.

Centro said yesterday it is seeking expressions of interest in the potential acquisition of the entire group or its wholesale funds in Australia and the US as it desperately tries to raise funds to refinance 2.7 billion Australian dollars in short-term debt by a February 15 deadline. Another 1.2 billion dollars is due to mature in the next 12 months.

"Some pretty big and credible players are talking about injecting equity in the business," the banker was quoted as saying.

"These aren't bottom fishers. They know that if the company can sort out the the liquidity issues, the shares will be over 3 dollars. There's an enormous amount of money to be made."

Centro shares closed 3 cents or 3 percent higher at 1.04 dollars yesterday, although it traded as high as 1.24 dollars earlier in the session.

Centro shares fell from 5.70 dollars to as low as 48 cents after it announced a 3.9 billion dollar financing shortfall, cancelled its half-year to December distribution and slashed its year to June earnings guidance last month.

South African Hedge Fund Index Returns 15.56%

The South African Times reported that their hedge Fund Index returned 15.56% over one year to November, while the month-on-month growth rate dipped by 1.67%.

Director of Clade Investment Management Gavin Goldblatt said, "The volatility in both these markets has also increased dramatically over past months....Bond markets performed considerably better, with a number of central banks raising rates, and a flight to the safety of bonds." As a result the JP Morgan Global Bond Index returned a staggering 4.10%, its highest monthly return in years, according to the paper.

Meanwhile, the Clade equity long-short index fund returned 20.17% over one year, while the offshore enhanced index fund denominated in dollars was up 7.69%, according to the newspaper. November was a very tough month for global equity markets, with the MSCI All World Index losing 4.57%, and the JSE ALSI losing 3.19%.


Goldblatt added, "However, renewed inflation fears in South Africa drove the All Bond Index down 1.55%, for a net return for the last 12 months of only 4.82%. All of Clade’s funds reported losses for the month. However, none of these losses were as large as that of equity markets, and the funds succeeded in their main objective of reducing volatility and preserving capital during difficult times." concluded Goldblatt.

Large Hedge Funds Taking Over From Smaller Counterparts

According to a report by research and data provider Hedge Fund Research, about 863 funds were launched through the third quarter, nearly half the amount for all of
2006. About 408 asset pools were liquidated compared with 717 in 2006.

In 2003, 1,094 new funds were introduced. Liquidations fell to an industry low of
296 funds in 2004.

Kenneth Heinz, Hedge Fund Research president, said investor requirements for size and infrastructure may be making it more challenging to launch a new fund, “In the third quarter of this year, investors allocated nearly 90% of new capital to funds with greater than $1bn (€695.8bn) already under management.”

Big hedge funds tower over the industry. Heinz said less than 10% of hedge funds controlled 73.5% of capital for the year through the third quarter. Half of the $45bn in new hedge fund capital in the third quarter was allocated to funds of hedge funds.

Heinz said that although some collapses were caused by bad investments tied to the sub-prime mortgage market, he said the majority of funds were closed because they failed to meet the expectations of fund managers or investors.

HFR Says Fewer Hedge Fund Launches in 2007

Hedge fund launches slowed in 2007 for the third year in a row, a sign investors may be putting money into existing funds rather than into new ones with perceived higher risks, according to Chicago-based Hedge Fund Research.

863 funds were launched in the roughly $1.9 trillion industry by the end of the third quarter, compared with 1,518 new funds for all of 2006 and 2,073 launches in 2005. Liquidations also slowed, with 408 funds closing by the third quarter 2007, compared with 717 for 2006 and 848 for 2005, HFR said on Wednesday.

HFR also said that the slowing launches and liquidations in an industry with more than 9,000 funds suggests investors are more inclined to allocate to larger, more established hedge funds, which are likely to be more diversified and have better risk controls.

"In the third quarter of this year, investors allocated nearly 90 percent of new capital to funds with greater than $1 billion already under management," said HFR. "Investor requirements for size and infrastructure may be making it more challenging to launch a new fund."


That contrasts with previous years, when investors often clamored to invest in the latest funds, particularly those founded by high-profile former investment bank proprietary traders.

Private Equity Firms & Hedge Funds May Face Key Man Risk

Despite current investor and media attention on unexpected CEO turnover at major public companies, key man risk, the risk that the departure of a key executive or group of executives will lower credit quality, is more prevalent and a risk to credit quality among private equity firms and hedge funds, says Moody’s Investor Service.

“Recent departures at some large financial companies have brought to the fore the need for effective succession planning and management development, but also highlighted that large firms can usually cope with such departures, however unsettling,” says Moody’s vice-president Janet Holmes. “Hedge funds and private equity firms, however, can face considerably more acute CEO [or founder] leadership transition risk.”

Like other firms with founding CEOs, hedge funds and private equity firms face key man risk because they have often been created by successful founder executives who have played a central role in building a franchise and are closely linked with its business, brand and success. However, unlike most other major companies, these firms face additional key man risk because one or a handful of investors may hold most, if not all, of the voting stock.

Generally speaking, older firms will be more likely to have their equity distributed away from their founder, while private equity firms are less likely than hedge funds to have a single owner.

Hedge Funds Ahead for November

Hedge fund returns remained in double digits for the year despite a 1.6 percent dip in November, according to the Greenwich Global Hedge Fund Index. Putting hedge funds ahead of a trio of broad stock indexes through the year's first 11 months.

Among the hedge fund strategies tracked by the index, the Specialty Strategies Group led the pack, up 16.5 percent despite a 1.9 percent drop in November triggered by a fall in emerging markets.

Through November, the GGHFI was up 10.5 percent compared with 6.2 percent for the Standard & Poor's 500, 8 percent for MSCI World Equity, and 3.4 percent for the FTSE 100.

The Long-Short Equity Group lost 2.3 percent in November but was up 10.8 percent for the year. The Directional Trading Group, which bets on futures, was up 9.4 percent for the year, while the Market Neutral Group, was up 7.7 percent through November.

Hedge Fund Launch Expected From GMP Capital

GMP Capital Trust is expected to announced the launch of a new hedge fund this year, according to Canadian newspaper Globe and Mail. The $50-million hedge fund is to be co-headed by star trader Michael Wekerle.

The firm will put up $20-million, employees will add their own money and outside investors will be invited to join, according to the paper. GMP is following a blueprint drawn up by houses such as Goldman Sachs Group Inc., which gleans more than half its revenue from smart investments with its own capital. All the major Canadian dealers also have proprietary trading funds that use hedge fund strategies.

If the fund can build a successful track record, sources at GMP say they anticipate it will attract support from wealthy individuals and outside institutions such as pension funds, which have embraced alternative asset managers in recent years.

The new hedge fund is expected to deploy four investment strategies. There will be a traditional equity trading approach that includes taking long and short positions, the fund will also do credit trading, which would include buying distressed debt, plus what's known as program or algorithmic trading and options-based volatility investing.

Successful hedge funds created by domestic dealers include three-year old Flatiron Capital Management Partners, a $350-million (Canadian) fund backed by National Bank Financial and staffed by its former employees.

Calvert Launches Alternative Energy Opportunities Abroad

Dublin based mutul fund manager Calvert Inc. announced the launched this year of the Calvert Global Alternative Energy Fund. The new hedge fund invests in a broad universe of U.S. and non-U.S. stocks, seeking out companies that are alternative energy market leaders as well as those building a significant presence in the sector.

Jens Peers, head of ECO Investing at Dublin-based KBC Asset Management International Ltd. and lead portfolio manager of the Calvert Global Alternative Energy Fund, said: “Non-U.S. companies and markets will benefit from the improving prospects for alternative energy in 2008 because Europe, Asia and other regions are further along than the U.S in addressing climate change and oil dependency by embracing alternative energy technologies.”

Over the long term, according to their website, Calvert believes that alternative energy technologies will become an increasingly significant solution to the global energy and climate change challenges. The firm believes it will take multiple strategies to address climate change and therefore advocates a broad range of solutions, such as greater energy efficiency and aggressive development of renewable energy sources.

The Fund was launched on May 31, 2007 and is advised by Calvert Asset Management Company, Inc. Calvert is one of the nation’s largest socially responsible mutual fund firms with approximately $16 billion in assets under management offering 41 funds that allow individual and institutional investors to pursue a broad range of investment objectives within a single fund family.

A Challenging Year For Hedge Funds Ends Well

The 2007 Credit Suisse Index shows that hedge funds have outperformed many major global equity indices for the year while maintaining considerably less volatility.

According to Oliver Schupp, President of the Credit Suisse Tremont Index, LLC, the Index finished the period with estimated annual returns of 12.1% for 2007 year to date through November 30.

“We are pleased to present a research piece analyzing the performance of the Credit Suisse/Tremont Hedge Fund Index for 2007,” said Mr. Schupp. “Hedge funds experienced a challenging year due to certain market events but finished the year through November 30 by outperforming many major global equity indices while maintaining considerably less volatility.”

2007 was characterized by unusually high levels of volatility that impacted hedge fund strategies and financial markets throughout the year. A major sell-off in China in late February sparked fears of an Asian crisis reminiscent of 1997. Unexpected liquidation of several high profile hedge funds, as well as November’s equity sell-off in markets worldwide. Nevertheless, hedge fund strategies performed well and the Broad Index returned 2.0% in the fourth quarter with all 10 sectors in positive territory through November 30th.

The asset management business of Credit Suisse is comprised of a number of legal entities around the world that are subject to distinct regulatory requirements; certain asset management products and services may not be available in all jurisdictions or to all client types.

Hedge Funds Sector Positioned To Recover Quickly, F&C Partner Speculates

Commenting on the subprime crisis, Francois Barthelemy, partner at hedge fund F&C Partners said, "Hedge funds tend to suffer in very volatile environments but well-managed portfolios often recover quickly, once the market has come back to some sort of rational pricing of assets."

Despite the recent volatility that led many to describe November as the 'bloodiest' month for hedge funds, the sector is well positioned to benefit from the current turmoil.

Barthelemy explained, "The real question that people are struggling with is that there are a number of signs indicating that we might be moving into recession territory. We have had three great years where the way to make money was about growth and it seems we are now moving into a very different environment."

He belives, "the solution requires the raising of fresh capital and the selling of impaired assets to investors who will have the ability to work them through bankruptcies or restructuring," he said. "Only hedge funds have the legal and investment expertise to buy that type of assets and they are likely to do really well as a result of it."

Between December 2000 and December 2004, the Credit Suisse Tremont Distressed Hedge Fund Index was up +72%, while the MSCI World Index was down -2%. "We expect the next few years will see a repeat of this scenario."

Outside distressed assets, there are also attractive opportunities in a number of traditional investment sectors but not on a standalone basis. "While alpha is now easier to find, the beta of the market may kill you. This means it is the best of times for hedged strategies that aim to take most of the beta out of the return," he said.

Barthelemy, whose team is responsible for the management of the F&C Balanced Alpha Fund of Hedge Funds and the F&C Select Alpha Fund of Hedge Funds, concluded, "There is not doubt the world is very volatile and I don't think that buying just equity will work in the next few years. Volatility is not going to go away for a while and you will need a strategy that can cope with that. For me that means hedge funds."

Alternative Energy Fund Launch by Guinness Atkinson

Guiness Atkinson Asset Management has launched an alternative energy fund for UK and European investors. The fund is managed by a team of three fund managers, Tim Guinness as the Lead Manager and Edward Guinness and Matthew Page as Co-Managers.

With a 50/50 top-down/bottom-up approach, the fund looks to identify the sub sectors within the space which have the greatest potential for growth and strong returns.

Tim Guinness said in an interview with Alt Energy Stocks, "I have been running a conventional energy fund since 1998 and have been following alternative energy stocks as a sub sector within the energy universe since then."

"Recently we have preferred wind and solar over fuel cells and biofuels but this is constantly under review." Guinness said, "We then screen the universe of 200 stocks we have identified to try and identify good companies that are cheap where sentiment towards them is improving and stock price action is positive. One tool we use is to screen by value, earnings momentum, economic returns vs peers, and a technical indicator."

Alternative energy includes, but is not limited to power generated through solar, wind, hydroelectric, tidal wave, geothermal, biomass or biofuels. Energy technology includes technologies that enable these sources to be tapped and also various manners of storage and transportation of energy, including hydrogen and other types of fuel cells, batteries and flywheels, as well as technologies that conserve or enable more efficient use of energy.

Hedge Funds Low in November but High Year To Date

The Greenwich Global Hedge Fund Index is up +10.53% year-to-date despite falling -1.61% in November, and it continues to outpace equities for the month and year.

Ben Rossman, Senior Vice President of Greenwich Alternative Investments noted that, “Hedge fund performance, which was less severe than that felt by the equity markets, highlights their unique ability to limit the downside.”

All four equity indices were down by more than 4% in November: the S&P 500, MSCI World Equity, and FTSE 100 Indices posted -4.18% (+6.23% YTD), -4.24% (+7.97% YTD), and -4.30% (+3.41% YTD), respectively.

The November Index currently includes 1,325 funds. Final November results will be posted in early January, once additional funds have submitted returns.

Greenwich Alternative Investments, LLC (and its affiliates) is among the oldest providers of hedge fund indices, asset management services and research to institutional investors worldwide.

Hedge Funds Experiencing Staff Shortages

According to a new survey conducted by CPA firm Rothstein Kass, nearly 70% of hedge funds are having difficulty retaining back-office personnel. "Hedge funds have seen tremendous inflows of capital in recent years, a trend that has accelerated as sophisticated investors seek to mitigate risk in volatile market conditions," said Howard Altman, Co-Managing Principal of Rothstein Kass.

"However, as our research reveals, the rapid pace of industry growth has left back-offices more pressured than ever before. Firms of all sizes are struggling to retain qualified personnel amid existing staffing shortages, including the CFO and COO levels. These problems will only be exacerbated by the industry's increasing institutional focus, since these investors generally demand stricter reporting and compliance capabilities."

Survey findings were based on interviews with over 500 Chief Financial Officers at direct investment hedge funds with at least $100 million in assets under management.

Firms in the study are representative of a wide range of investment styles, experience levels and assets under management. Approximately half had assets between $100 and $999 million. A quarter reported assets of between $1 and $2.99 billion, and the balance were firms with assets in excess of $3 billion.

The study was commissioned and results analyzed by the Rothstein Kass Executive Search Group, which specializes in the recruitment and placement of senior financial executives and staff at alternative investments companies.

"It was clear to us from our daily interactions with clients, that .......it's a time of unprecedented opportunity for talented individuals looking for an exciting career in the hedge fund industry."

Findings are summarized in "The Compensation Conundrum," co- authored by Russ Alan Prince, a leading authority and counselor on private wealth, and Hannah Shaw Grove, a widely recognized expert on behaviors and finances of high-net-worth individuals.

"The Compensation Conundrum" also provides 2007 total compensation projections for key non-investment roles at hedge fund organizations, including CFO, COO and Controller. Figures are composed of base salary and bonus. "Our compensation figures offer ranges for total compensation by position and will serve as a benchmark for future research." said Todd Noah.

Hedge Fund Operator Acquired For $1.32 Billion

In a deal worth up to $1.32 billion, London hedge fund operator Marble Bar Asset Management LLP has been bought by Swiss private banking group EFG International.

EFG said it will initially pay $517 million in cash, plus a further $300 million to $800 million over the next six years, depending on the performance of Marble Bar's funds. Of the initial cash payment to Marble Bar partners and staff, about $400 million will be reinvested in Marble Bar funds for up to six years.

In a press release yesterday, EFG said that the purchase broadens its capabilities in hedge funds and brings the hedge fund-related assets it manages to around $13.3 billion , or 18% of clients funds. Last year, EFG bought fund of hedge funds manager C.M. Advisors for an undisclosed amount.

According to Hedge Fund Research Inc., investors have poured $164 billion into hedge funds in the first nine months of 2007, boosting global assets to $1.8 trillion.

Chief Executive of EFG, Lonnie Howell, said buying Marble Bar gives the bank access to "sheer talent" and will help it meet demand from wealthy individuals for hedge fund investments.

Marble Bar's 2008 net profit is expected be at least $80 million to $100 million EFG said, meaning the purchase price is about 10 times estimated earnings.

Dexion Fund Of Hedge Funds Raise $274.4 Million

Dexion Absolute Limited has now become one of the world's largest exchange-traded funds of hedge funds (FOHF) with net assets of GBP 512 million ($1,056.5 million).

The London Stock Exchange-listed FOHF completed the multi-currency share issue raising GBP 133 million ($274.4 million). The issue was sponsored by Hoare Govett Limited, a member of the ABN AMRO group.

Dexion director Nick Browne said, "We are very pleased with the response to this issue. We have built on the foundations established earlier this year in a number of jurisdictions across Europe and Asia, received strong support from many existing shareholders and gained a wide range of significant new pension fund and other institutional investors."

Bob Cowdell, managing director at ABN AMRO, is quick to point out the significance of the share issue. "This is the largest capital-raising to date in the London-listed funds of hedge funds sector," he says. "It has more than doubled the size of the Company's Euro and US Dollar share classes introduced earlier this year.'

The fund of hedge funds provides direct access to Harris Alternatives LLC manager of the 'Aurora' range of funds. With a 17-year investment record Harris Alternatives currently manages in excess of $7 billion in funds of hedge funds and segregated accounts.

Dexion's investment objective is to generate consistent long-term capital appreciation with low volatility and little correlation to the general equity and bond markets through a portfolio having a diversified risk profile. The FOHF has a database of approximately 550 FOHF managers.

Alpha Titans Fund of Fund Launch

Alpha Titans, a multi-manager hedge fund announced that it will be open to outside investors from December 1st, the fund of funds was launched on November 1st 2007.

Alpha Titans was launched with equal allocations to DE Shaw, Renaissance, Citadel, IKOS and Whitebox. Most of these managers are either closed to new investors, or cannot be acquired by new investors without very high minimums and lockups. Alpha Titans has favorable liquidity terms with many of these managers due to long-standing investments with them.

Alpha Titans is offered to qualified investors through onshore and offshore funds. With a minimum initial investments of $100,000, the fund of funds has quarterly liquidity and no redemption penalties. Investors have the opportunity to choose from three different share classes of leverage, 1x, 1.5x and 2x.

Alpha Titan is an alpha-return investment manager that has achieved superior risk-adjusted returns through skill-based investing.

Global Investment Fund Now Open

West Palm Beach (HedgeCo.Net)- Global Investment House has announced the Global Distressed Fund is now open for new and existing investors until the end of December.

The Barclays group, the world's largest independent hedge fund research company, ranked the Fund earlier this year as the 4th best Fund of Hedge Funds in the world, in terms of risk adjusted return, from a list of 647 funds.

The fund was also ranked by EurekaHedge among the top ten distressed fund of funds in terms of its annualized return, standard deviation, and Sharpe ratio.

Mr. Sameer Al-Gharaballi, Executive Vice President at Global, said the fund's reopening presents an opportunity to invest in one of the best and highly ranked fund of hedge funds.

Al- Gharaballi confirmed that the fund presents an opportunity for investors seeking diversification from local markets with low risk, adding that Global may provide interested investors with loans on invested capital, as a show of confidence in the fund's stable performance.

$2.3 Million Raised By 100 Women in Hedge Funds

The hedge fund industry raised $ 2.3 million at the Sixth 100 Women in Hedge Funds Gala at Cipriani in New York City.

Many well-known leaders in the hedge fund industry attended the gala celebration, among them Tudor Investment Management, Williams Trading, Blue Ridge Capital, Highbridge Capital Management, Eton Park Capital Management, Moore Capital and Atticus Capital.

John Griffin, Founder and President of Blue Ridge Capital, who founded iMentor in 1999 remarked, "We are absolutely delighted to be this year's 100 Women in Hedge Funds beneficiary." To-date, iMentor has matched and supported over 4,000 mentor-mentee pairs, partnering with over 30 schools and after-school programs in underserved communities.

100 Women in Hedge Funds annually presents two awards that have historically recognized under-the-radar achievements and leadership. The 2007 Effecting Change award honored many leaders across the hedge fund industry who serve as powerful examples of effective mentoring.

The 2007 Industry Leadership Award was awarded to Jane Mendillo, Chief Investment Officer, Wellesley College in recognition of her talent, ethics and passion, which help define the hedge fund industry's standard of excellence.

Since its first session in 2002, 100 Women in Hedge Funds has hosted more than 150 events globally, connected more than 150 senior women through their Peer Advisory Councils and raised in excess of $13 million for philanthropic causes in the areas of women's health, education and mentoring.

Germany as Europe's Most Attractive Destination For Renewable Energy Investors

Germany has emerged as Europe's most attractive destination for commercial investors in the renewable energy sector, while the UK has lost momentum due to a comparative lack of pace on policy matters, according to the latest "Ernst & Young Renewable Energy Country Attractiveness Indices", which tracks and scores global investment in renewable energy.

The index, launched at the World Energy Congress in Rome, reveals that Germany has jumped from fifth to second place, displacing the UK, India and Spain, which jointly held this position last quarter.

It also suggests that although the credit crunch has left many investors overexposed to certain sectors, renewables projects still offer a relatively low-risk option for investors.

Although EU countries dominate the Country Attractiveness Indices, the US remains the most attractive destination overall for investment in renewables, a position it has held for two years.

Jonathan Johns, Head of Renewable Energy at Ernst & Young, says the US will continue to attract the lion's share of global investment particularly if changes to legislation continue.

The Ernst & Young Country Attractiveness Indices provide scores for national renewable energy markets, renewable energy infrastructures and their suitability for individual technologies. The indices provide scores out of 100 and are updated on a regular basis.

BlackRock Launches Distressed Securities Funds

BlackRock, the biggest listed US asset manager, on Tuesday announced the launch of more distressed securities funds to take advantage of the current credit market troubles, according to Reuters.

Chairman and Chief Executive Laurence Fink said the firm would launch hedge funds investing in distressed mortgages and distressed real estate. These funds would raise "multibillion dollars". BlackRock has already raised a "very large" leveraged-loan fund and is now in the process of investing the money.

Just last week, BlackRock again earned first place in DALBAR’s 2007 Trends & Best Practices in the "Leading Mutual Fund Statements" category. DALBAR issues this award annually.

"At BlackRock, our goal is to produce a comprehensive investor statement tailored to
shareholder needs" said Anne Ackerley, managing director at BlackRock. "Receiving this award for three consecutive years demonstrates our successes and is a clear indication of our ability to deliver beyond expectations and surpass the industry standard."

BlackRock is one of the world’s largest publicly traded investment management firms. With a reported AUM of $1.3 trillion as of September 30, 2007.

Hedge Funds More Proactive in Search for New Research

Hedge funds manage external research more proactively than long only managers, according to a study released by Integrity Research Associates. Hedge funds review their external research more frequently than long only investment managers, are three times more likely to seek assistance finding external research, and are much less confident that they have already found the best sources of external research.
“Our study confirms that hedge funds are more aggressively seeking out new sources of research than long only managers,” says Michael Mayhew, Integrity’s chairman and author of the study. “Long only managers are complacent about external research whereas hedge funds are continuously looking for what’s new and innovative.”

Conducted in October, 2007, the survey polled forty-three research directors at US based hedge funds and long only institutional investors. The survey focused on how institutional investors source and value external research. Highlights from the study include:

• Forty-two percent (42%) of hedge funds evaluate their portfolio of research providers at least monthly compared to five percent (5%) of long only managers.
• Hedge funds are three times more likely to use external sources to identify research, with forty-five percent (45%) of hedge fund research directors using outside sources compared to thirteen percent (13%) for long only directors of research.
• Thirty percent (30%) of hedge funds were either Not Too Confident or Somewhat Confident that they are using the best external research available compared to eighteen percent (18%) of long only managers.

“As long only managers introduce more alternative product like 130/30 funds, they are talking the talk, but our survey suggests that they are not yet walking the walk,” adds Mayhew.

Hedge Funds See Best Performance In 5 Years

According to the HFN Hedge Fund Aggregate Average, the second round of U.S. Federal Reserve interest rate reductions pushed hedge fund returns up +3.32% in October 2007.

Strategies which rebounded sharply following the U.S. Fed's actions in September were again beneficiaries in October. The HFN Emerging Markets Average was +5.01% in October and +22.22% YTD. Energy sector funds took advantage of oil prices closing in on $100/barrel.

The hedge fund’s excellent performance wasn't limited to commodity related strategies, several equity related strategies outperformed broad equity benchmarks. Long only strategies outperformed the S&P 500 by the largest margin in the last twenty months. Additionally, technology sector funds returned +5.07% in October while the healthcare sector and small/micro cap funds returned +5.07% and 3.43%, respectively.

Hedge funds influenced by market volatility through options strategies produced their best average performance in five years, and macro funds continue to benefit from strong trends in currency and commodity markets.

HedgeFund.net (HFN), a division of Channel Capital Group Inc, is a source for hedge fund news and information. Registered users include a wide range of institutional investors and high net worth individuals.

Hedge Funds in the Middle East Conference

The third Annual Conference for Hedge Funds in the Middle East, organized by Hedge Funds Review magazine, got underway on November 5 under the sponsorship of Investcorp, the alternative investment specialist.

The opening session was attended by His Excellency Mr Rasheed Muhammed Al-Maraj, the Governor of the Central Bank of Bahrain. Attending the conference are leading investors from various Gulf nations, in addition to hedge fund managers from the Middle East, North Africa, Europe, Asia and the United States, who have been discussing the latest strategies for alternative investments.

Investcorp Managing Director Sewanyana Kironde welcomed the participants. He was followed by the co-heads of hedge funds at Investcorp, Ibrahim Gharghour and Deepak Gurnani, who presented a review of global strategies for hedge fund activity. Their presentation stressed the importance of studying risks and managing them wisely in order to attain balanced investments.

Investcorp has more than 10 years' experience in hedge funds. At present it manages $6.4bn in hedge fund assets, making it one of the biggest international investors in this area. Hedge funds are now being used in the portfolios of institutional investors and high net worth individuals as an alternative means of maximising returns and increasing wealth.

In collaboration with the conference organizers, Investcorp has designed this summit to facilitate discussion about the various hedge fund strategies, about the means of addressing geographic distribution and about Islamic Sharia compliance in the Middle East market, which is growing at a rapid pace.

The conference, which continues until Wednesday night, also featured a "Day at the Races" at the Bahrain International Circuit, and a banquet dinner.

$61 Million Shariah Fund Launch By KAMKO

KIPCO Asset Management Company ("KAMCO") today announced the launch of the Al Raya Investment Company KSC, with the private placement of 170 million shares. The fund will primarily target international investors in developed markets interested in Shariah compliant international asset management.

"Al Raya Investment Company aims to be the first and most comprehensive Islamic investment company in Kuwait and the GCC region with a clear focus on international Islamic asset management products and services," said Mr. Hazem Al-Braikan, Chairman of the Founders' Committee.

Al Raya is a private company that will be incorporated under Kuwaiti company law as a Kuwaiti closed shareholding company, and will be registered with the Central Bank of Kuwait as an Islamic Investment Company.

Primarily, the company will target international equities, asset management, alternative investment products, advisory services and portfolio management segments of the market.

Islamic finance represents a fast growing market segment. At the end of 2006, over 250 Islamic financial institutions operated in more than 75 countries, holding assets estimated at more than $265 billion with another $400 billion in financial investments.

It is estimated that within the next 10 years, 50 to 60% of the total savings of the world's 1.5 billion Muslims will be in the form of Shariah compliant products, and that the potential market for Islamic financial services to be in the area of $4 trillion.

"KAMCO is delighted to announce this new investment opportunity to its clients and investors in Kuwait and internationally," said Mrs. Intisar Al-Suwaidi, KAMCO Vice Chairman. "We strongly believe that this private placement offering will be of significant interest to selected and sophisticated investors."

BNP Paribas Adds Three Members to Their Hedge Fund Relationship Management Team

BNP Paribas announced today the expansion of its Hedge Fund Relationship team with the appointments of Conrad Johnson as a director in New York and Stephanie Wong as an associate director in Hong Kong.

Conrad joins BNP Paribas from J.P. Morgan Securities in New York where he worked in Fixed Income prime brokerage. In his new role, Conrad will assist his team in optimizing the firm's relationships across its various business lines with the world's leading Hedge Funds.

Prior to joining BNP Paribas, Stephanie was with HSBC managing Hedge Fund relationships in Asia. Her career started with JP Morgan in the Structured Finance CDO/CLO group in 2000 and later moved to Hedge Fund Credit function with JPM in Singapore.

Also announced was the relocation of Mark Walker to London from New York to further the global effort as Head of Hedge Fund Relationship Management for Europe. With over fifteen years' experience, Mark will help drive the bank's efforts in the dynamically growing European hedge fund market. Mark will also spearhead the Hedge Fund Capital Markets Solutions Group by drawing upon the vast capabilities of the firm to deliver capital introduction, and more recently DCM and ECM syndication and structuring solutions. Conrad, Stephanie and Mark all functionally report to Talbot Stark, Global Hedge Fund Relationship Manager.

Commenting on Conrad's appointment, Talbot Stark said, "Hedge Funds are a core client sector for BNP Paribas. Mark, Conrad and Stephanie will draw on our extensive footprint across Europe, the US and Asia and our superior capability in derivatives across asset classes, to set ourselves apart from our competitors by adding value for our Hedge Fund clients through the delivery of dynamic solutions."

The BNP Paribas Hedge Fund Relationship Management Team was formed in 2006 to co-ordinate client coverage across Fixed Income, Equity Derivatives and Commodities ensuring that BNP Paribas effectively covers its hedge fund clients and is constantly developing its business in close alignment with their needs.

BNP Paribas is a European leader in global banking and financial services and is one of the 5 strongest banks in the world according to Standard & Poor's. BNP Paribas also has a significant presence in the United States and strong positions in Asia and the emerging markets.

Sidley Austin Named Top Hedge Fund Firm

Institutional Investor’s Alpha Magazine has ranked Sidley Austin LLP the number one legal adviser to the hedge fund industry among onshore law firms for the second consecutive year.

Thomas A. Cole, chair of the firm’s Executive Committee said, “We are particularly gratified by the results of this year’s Alpha Awards because we have once again been chosen by our clients,” he explained. “We have been privileged to work with some of the most respected hedge funds and alternative asset managers and we are very proud of the performance of our team, which this ranking acknowledges.”

The Alpha Awards are calculated from the responses of nearly 1,000 hedge fund firms, representing roughly $1.4 trillion in assets under management. Additionally, this year Alpha introduced a new ranking showing which providers best serve hedge fund firms with assets $1 billion or more; Sidley was ranked first in this new category. Additionally, Sidley placed first in almost every sub-category, including “business planning,” “client service,” “hedge fund expertise” and “regulatory and compliance.”

Sidley’s hedge fund and investment management practice comprises approximately 95 lawyers in New York, Chicago, Los Angeles, San Francisco, Hong Kong and London. Sidley was also named Investment Funds Law Firm of the Year in the 2007 Asian Legal Business Awards.

Prudential Launches 4 Sub-Funds In Hong Kong

Prudential Asset Management today announced its entrance into Hong Kong's retail funds market with the launch of its first four retail sub-funds, the M&G Global Basics Fund, M&G Global Leaders Fund, M&G Pan European Fund, and the M&G American Fund.

The launch signals the latest stage of development for Prudential's asset management business in Asia, which has operated in the Hong Kong market since 1994. The Hong Kong launch follows the sub-funds' previous introduction to retail investors in Singapore, Korea, Japan, Taiwan and Malaysia where they attracted significant interest with inflows exceeding $760 million over eight months to 31 August 2007.

"We are launching our retail presence in Hong Kong by introducing some of our core funds to the market." Guy Strapp, Regional Head of Investment Management said about the launch, "These funds have a history of consistent performance and will provide Hong Kong investors with access to global equity markets to help diversify investment portfolios."

Prudential Asset Management (Hong Kong) Limited is a subsidiary of Prudential plc (United Kingdom). Its insurance operations span 12 markets, Mainland China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

With $66 billion in assets under management, it is the only foreign asset manager in the top 5 position in more than one Asian market.

High Turnover Among Hedge Fund Employees

A survey conducted by Job Search Digest revealed insights into the world of hedge fund compensation. Most respondents, the survey shows, have less than two years with their firms, suggesting high employee turnover in the industry.

The high turnover extends to workers on both sides of the Atlantic. Though 50% of survey respondents had more than 10 years of professional experience, more than 60% of respondents reported being with their current firm for two years or less. This short tenure is reflected in a fraction of the professional sharing in the equity pie.

"The survey raises an interesting question," says David Kochanek, president of Job Search Digest, "Are the players unhappy because intelligent, well-educated hard charging 'Type A' people are never satisfied? Or, does the hedge fund industry have a problem."

With the very top hedge fund managers earning hundreds of millions of dollars, even those making a million a year wonder what they could be making if they jump to another firm." Kochanek added.

Production-based bonuses are an integral part of employees' compensation, the survey found, and range from 38% of base salary to more than 400% for top producers. The survey found the further you move up in the organization, the bigger that bonus percentage becomes.

When it comes to educational requirements, a bachelor's degree is the minimum for jobs in the field, but an advanced degree or master's in business administration isn't a requirement for many positions, the survey found. "Although MBA¹s are earning more on average, hedge fund players can be successful in the firm without an MBA or other advanced degree," said Kochanek.

The 2007 Hedge Fund Search Digest Compensation Survey captures information from industry players at all levels. The respondents are from more than 200 hedge funds firms, including Credit Suisse, Deutsche Bank, Goldman Sachs, and Morgan Stanley.

GCC Economist Urges Consideration Of Asset Based Rather than Oil Based Economy

According to Dr Nasser Saidi, Chief Economist of the Dubai International Financial Centre, "Economies of GCC states should now be considered as asset-based ones rather than oil-based."

The 'Sovereign Reserve Management, Pension and Institutional Funds Congress 2007' was held in Doha, Qatar. During the keynote address Dr Saidi said that in the UAE for example, "asset revenue is more important than resources". The economist discussed at length sovereign wealth funds. These funds are foreign currency assets held by states over and above the reserves of their central banks.

"We have seen the emergence of GCC countries going into acquisitions. With oil prices up, government spending has gone up. This resulted in the emergence of bureaucracies in GCC countries and as welfare states."

Though sovereign wealth funds are fully-capitalized and have low leverage, accounting for $3.1trillion globally, hedge funds account for $1.4 trillion but are highly-leveraged. However, both these funds are dwarfed by the size of insurance funds which amount to $16-17 trillion and pension funds, which total $18 trillion globally.

"It is highly unlikely that sovereign funds will act in a cohesive way. Growth is driven by high commodity prices, not just oil. This has led to high current account surpluses," said Dr Saidi.

Saidi said if a country has an extra $20 billion on hand, questions would arise on how the money should be invested. "The money should not be put into the central bank's reserves but placed where the money would get high returns. Emerging economies have now turned from being net capital importers to net capital exporters. The money is mainly going to other emerging markets."

It is matter of time, anything between five to ten years, for China to start investing in oil-producing states. "This will be because of China's need for energy resources and the need to diversify its assets," Dr Saidi said.

The Gulf Cooperation Council (GCC) also known as the The Cooperation Council for the Arab States of the Gulf (CCASG) is a trade bloc involving the six Arab states of the Persian Gulf with many economic and social objectives.

Fund Of Resources-Hedge Fund Launch

The Gibraltar based Sirius Investment Management is launching the Sirius Investment Fund II, a natural resource and mining-focused fund of hedge funds, which will be open to new investment on 1 November.

It will invest predominantly in hedge funds that invest in very early stage mining plays and other natural resources, projects which are not dependent on fluctuations in commodity prices to generate returns, Sirius said.

It is particularly interested in projects which are moving from exploration to production, the stage with the greatest uplift in valuation. Larger companies with established production are more sensitive to the commodity price, Sirius added, so the fund will not invest in such opportunities. It targets 20% and hopes to raise $300m.

The Sirius Resource Fund, a resources special situations hybrid fund launched in April this year is broadly targeting iron ore, gold, diamonds, energy and copper plays, but expects to concentrate primarily on African emerging markets. Its special situations strategy will see investment targeted in pre-initial public offering companies as well as in small-cap listed equities and physical assets.

The fund has delivered 54.2% since inception, with an August return of 16.07% and has $50 million in assets under management.

Blackstone Appoints New Hilton Head

Hilton Hotels Corporation and Blackstone Group announced the completion of their merger last week and are now expected to name Host chief executive of Hotels & Resorts Inc Christopher Nassetta as president and CEO, according to the Wall Street Journal.

The Merger has been financed with $20.6 billion of mortgage and mezzanine debt financing and approximately $5.7 billion of equity invested by hedge funds affiliated with The Blackstone Group. As part of his new responsibilities, Nassetta will build up Hilton’s luxury lines, aiming to "marry" the hotel’s numerous lines, including Embassy Suites, Doubletree and Hampton Inn, with many of Blackstone's own hotels.

Acquisition financing was provided by Bear Stearns, Bank of America, Deutsche Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley. Hilton Hotels Corporation is the leading global hospitality company, with 2,896 properties totaling approximately 490,000 rooms in 76 countries and territories.

The Blackstone Group is a global alternative asset manager and provider of financial advisory services. Its alternative asset management businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds.

UAE Investors To Increase Hedge Fund Holdings

Private investors in the United Arab Emirates plan to increase their holdings in alternative investments such as private equity, hedge funds and derivatives in the next three years, according to a new global report published by Barclays Wealth.

However, fewer than half of UAE investors polled expressed confidence in their knowledge of personal finance, hedge funds and private equity.

The report, 'Barclays Wealth Insights: Risk, Return and Reward', reveals that investors with at least $100,000 in investable assets plan to put more money into alternative investments over the next three years, as they seek more absolute returns.

The report reveals a trend amongst these investors of an increasing appetite for financial products which help reduce volatility, such as derivatives, private equity and hedge funds, particularly in the Middle East and Asia. At the same time, there is a move away from equities, which suggests investors have more of an appetite for returns that are stable rather than driven by market movements.

The survey, based on a global sample of 790 respondents that includes 100 individuals from the UAE, shows that 41% of UAE investors plan to invest in hedge funds in the next three years compared with the past three years (32%), according to the report.

Soha Nashaat, Managing Director and Head of Middle East at Barclays Wealth said, "Assets like hedge funds,... can all be used to manage risk, reduce volatility and stabilize results. Shariah-compliant products are of particular interest, as they are viewed in absolute return terms as well. The region has seen huge development in the Islamic finance sector in recent years and this is rapidly filtering through to the asset management arena, where considerable product development is now taking place."

Real Estate Entrepreneur Rod Khleif And Personal Philanthropy

The Florida real estate investor Rod Khleif has founded two non-profit charity organizations -Tiny Hands Foundation and A Better Choice Foundation.

The Tiny Hands Foundation was founded by Rod Khleif in the year 2001 with an intention to create an experience of joy for low-income children by providing a holiday meal for their entire family.

Through his basket brigade, implementing educational programs, researching cancer methodologies and love, Mr. Khleif intends to make a huge impact on the world. Through this foundation Rod Khleif has fed thousands of children around the holidays with giant baskets of food during the holidays for the past 6 years. Rod Khleif along with the “Tiny Hands Foundation” will feed 1,600 families on November 17, 2007 for the Thanksgiving holiday.

Rod Khleif also founded “A Better Choice Foundation” to support the search for alternative cures for cancer, emphasizing a non-traditional, holistic approach to a cancer patient’s physical and emotional well-being.

This foundation was formed to educate the public and doctors about the benefits of fighting cancer holistically. A Better Choice Foundation is in the process of assembling as many methodologies and practitioners as possible to form a collective voice, which will be presented to the public thus creating a massive impact.

Greenspan Concerned With Low-risk Long-term Rates

According to former Federal Reserve Chairman Alan Greenspan, "Low risk-free long-term rates worldwide seem to be one factor driving investors to reach for higher returns, thereby lowering the compensation for bearing credit risk and many other financial risks over recent years", he said in a said in an interview published on Friday by the Federal Reserve board.

"The search for yield is particularly manifest in the massive inflows of funds to private equity firms and hedge funds. These entities have been able to raise significant resources from investors who are apparently seeking above-average risk-adjusted rates of return, which, of course, can be achieved by only a minority of investors."

Greenspan also expressed his concern over, "many new hedge fund entrepreneurs....embracing a strategy of pinpointing temporary market inefficiencies, the exploitation of which is expected to yield above-average rates of return."

Greenspan concluded with, "I trust such an episode would not induce us to lose sight of the very important contributions hedge funds and new financial products have made to financial stability by increasing market liquidity and spreading financial risk, and thereby enhancing economic flexibility and resilience."

Hedge Funds Go For Stability

GFT UK, one of Europe's leading suppliers of innovative IT solutions is seeing hedge funds beginning to adopt business housekeeping methods in an attempt to reduce risk and improve continuity.

Having seen the assets under management in global hedge funds reach $2.48 trillion in July this year the market was positively buoyant; that was until the summer’s credit crunch which has taken its toll and seen the funds stutter through a turbulent few months.

The growth spurt, followed by a downturn, has raised some business continuity issues for hedge funds. Market and personnel changes can be very damaging for such technology and process-light companies. When fund managers leave, so does their knowledge and competencies.

These companies’ traditional lack of technical infrastructure is perhaps beginning to change. GFT has recently received an increase in request for process reviews from hedge funds. It would seem that even in these traditionally finance-driven companies, infrastructure is beginning to play a vital role.

GFT has been approached by a leading hedge fund, keen get the procedures and processes of its European Equities Team documented. GFT was selected due to previous project work and a strong knowledge of internal operations.

Hedge Fund Hires New Members To Allocation Committee

The Portland City Council and the Multnomah County Commission recently appointed 2 new members to the Portland Children's Investment Fund Allocation Committee. They are respectively: Alissa Keny-Guyer, a consultant for foundations and nonprofits; and Adrienne Livingston, executive director of the Black United Fund of Oregon.

Both Keny-Guyer and Livingston have spent much of their professional careers devoted to improving the lives of others, especially the youngest and most vulnerable in our society.

The Children's Investment Hedge Fund annually allocates about $10 million to programs throughout Portland in areas of early childhood, after school and mentoring and child abuse prevention and intervention. A five-member Allocation Committee meets publicly to make funding decisions for the Fund.

In 2002 Portland voters passed Measure 26-33 creating the Children’s Investment Fund. The Fund provides approximately $10 million a year for five years to support 65 programs in early childhood development, after-school and mentoring and child abuse prevention and intervention. Programs annually help more than 10,000 of the city’s neediest children and their families so youth enter kindergarten prepared to succeed, stay engaged in school and safe after school and families most at risk for abuse and neglect receive support and intervention services.

Technology Biggest Spending Area For Hedge Funds

According to a poll of over 100 top global hedge funds (and fund of funds) managers,
collectively managing some $900 billion in assets, shows that three quarters of respondents identified technology as the biggest spending area in the next two year, for 58% of funds, expenditure on risk management systems was anticipated to be the biggest proportion of that spend.

Only 13% of respondents expect to raise permanent capital in the next two years. The most popular route is deemed to be a partial sale to an external owner. The greatest interest in raising permanent capital comes, from managers in the Far East.

David Sung of Ernst & Young's Hong Kong office said: "Given that the managers in the Far East have yet to experience the maturity of businesses in the US and Europe, the idea of having more permanent capital could be appealing as a faster means of stabilizing their asset base."

Greater transparency around the valuation process is the foremost medium-to-high level regulatory challenge for 64% of respondents in the next two years; conflicts of interest (57%) and market abuse (55%) are the next key concerns. Valuation and pricing risks were also deemed the second greatest operational risk for managers.

The survey shows that the majority of funds (80%) expect incentive fees and management fees to decrease in the next two years. Almost two-thirds also identified increased operational costs as a significant future pressure on fees over the same period.

The survey was carried out by Ernst & Young in partnership with Ipsos MORI, an independent research company, across a number of leading global hedge funds, and fund of funds managers.

Research Shows Hedge Fund Talent A Priority

According to new research 'Navigating New Complexities' published today by Ernst & Young. The world's leading hedge funds managers are more concerned about attracting and retaining talented people and managing growth than anything else.

"Governance and infrastructure are the top enablers for hedge fund growth, as the industry continues to mature and develop," said Leon Chin, partner in the Ernst & Young Toronto hedge funds practice.

The poll of over 100 top global hedge funds (and fund of funds) managers, collectively managing some $900 billion in assets, shows that retaining the right people (42%) and managing growth (39%) are the highest level challenges over the next year, compared to just 9% who anticipate investing or developing in new products. Respondents were principals, chief operating officers and chief financial officers at these funds.

Art Tully, co-leader of the global hedge funds practice at Ernst & Young, said: "The global hedge fund industry now manages $2.5 trillion of assets; $41.1 billion poured in from investors in the second quarter of 2007 alone.

The industry appears to be proving that it can handle such inflows. The ability to absorb such flows is only tested by the capacity to grow and retain talent.

Hedge funds are working just as hard as other financial institutions to ensure they attract and retain the right people. Salary packages (86%) and firm culture (83%) are the main attractions enticing the best staff to join.

The managers surveyed for this research represented some US$900 billion in funds (approximately 55% of the entire industry).

Ernst & Young has teams around the world, including North America, the UK, Cayman, Bermuda, Ireland, continental Europe, Hong Kong and Australia, who are part of our global alternative asset management practice.

Federal Reserve moves to stop Credit Crunch

In September, according to the Credit Suisse/Tremont Hedge Fund Index, the U.S. Federal Reserve moved to stop the spreading Credit Crunch from further impacting the global economy with a half-percentage-point cut in interest rates.

Overall, the market environment has led to the majority of hedge fund sectors ending September on a positive note. In particular, the Managed Futures sector benefited with a 5.13% return as the market rebounded and volatility rose, leaving managers with a positive opportunity set.

The cut sought to ease terms on direct loans from its discount window in hopes banks would use the Fed's cash to restore liquidity to the credit markets. The interest rate cuts sparked a rally in global stock markets as investor fears were somewhat quelled, said Oliver Schupp. "However, the rate cut also led to a sharp fall by the U.S. Dollar and the rise of long-term Treasury-bond yields and oil prices, which could potentially foster inflationary pressures."

The Index is constructed using the Credit Suisse/Tremont database of more than 5,000 hedge funds. It includes both open and closed funds located in the U.S. and offshore, but does not include fund of funds. The Index is calculated as a total return index on a monthly basis, adjusted for asset in- and outflow, including a reselection according to the procedure outlined above on a quarterly basis.

Robeco Bank Bought By Kaupthing Bank Luxembourg S.A.

Private banking and alternative asset manager Robeco Bank of Belgium was purchased by Kaupthing Bank of Luxembourg, it was announced today.

Robeco was established in Rotterdam in 1929, and has EUR 142 billion ($201.5 billion) in assets under management (as of 31 December 2006). Their product range runs from equity and fixed-income investments, to money-market and real-estate funds and alternative investments, such as private equity, hedge funds and structured products.

George Möller, Chief Excecutive Officer of Robeco said, "The Belgian market has evolved enormously over these last years with most banks now operating an `open architecture´. They are increasingly incorporating the financial products of other specialist banks -including Robeco-. This opening up enables us to focus on third party distribution and on the institutional market in Belgium."

Magnus Gudmundsson, Managing Director of Kaupthing Bank Luxembourg said, "Robeco Bank Belgium represents an excellent strategic fit forKaupthing Bank in terms of geographic diversification, products and business culture. This acquisition is a logical step in building up Private Banking offerings in the Benelux countries. By taking over the activities of Robeco Bank Belgium we become immediately operational in Belgium and will have a platform for further growth".

Robeco has offices in Bahrain, Belgium, Germany, France, Japan, Luxembourg, Poland, Spain, the United States and Switzerland. Robeco has a bank license in Belgium, France and the Netherlands.

Thomson Financial Invests $180 Million in TradeWeb

Thomson Financial today announced it plans to form a strategic partnership with nine of the world's leading global dealers including, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, The Royal Bank of Scotland, and UBS to drive the expansion of electronic trading using the TradeWeb platform.

Under the terms of the agreement, the dealers will invest approximately $180 million to purchase a minority stake in TradeWeb's established markets. Separately, Thomson and the dealers will fund additional investment in asset class expansion.

"This partnership is a natural step forward in the evolution of the online financial marketplace, taking us closer to the time when almost all trading is electronic," said Jim Toffey, CEO of Thomson TradeWeb. "TradeWeb is ideally positioned to seize this opportunity, and expand e-trading for our clients on one platform through organic growth and through acquisition. The end-game is to be the leading global network where markets meet."

The transaction is expected to close in the next few months, pending regulatory approval. TradeWeb will maintain its global headquarters in Jersey City, NJ. Average daily trading volume on TradeWeb exceeds $250 billion.


Thomson TradeWeb is the leading online fixed-income trading network with over 12 million trades executed and total volume surpassing $200 trillion since its inception in 1998.