Canadian Hedge fund Lionhart Ltd. this month announced the launch of a new fund and the opening of an office in midtown Manhattan, New York. Present in the US since 2000, the addition of the New York office positions the hedge fund to develop the U.S. markets.
The launch of Talon, a private equity hybrid fund, is scheduled for March 2008. With a minimum investment of $1 million, the new hedge fund will be set up with $50 million from Lionhart and $50 million from existing and new investors from the US, Middle East and Europe.
Lionhart said, "Talon will be investing into early stage private financings and placements across a number of sectors including minerals, mining and natural resources, energy, alternative energies, mezzanine and bridge financing, IT and medical technology, property development and sub-sectors of these main areas. Investors will have the opportunity to invest in a blend of all the sectors or in an individual sector."
CEO Terrence Duffy, commenting on the move, said, "Information flow for traders and convenience for investors will improve with this move to Manhattan. This makes a lot of sense given the direction Lionhart is moving and the understandable interest in our fund offerings."
Lionhart is a multi-strategy arbitrage hedge fund with $800 million under management. Lionhart's New York office will open with 11 staff including trading, research, investor relations, and administrative functions. The Toronto-based hedge fund has offices in the world's top financial centers now including New York, Toronto, London and Singapore.
27 Feb 2008
Study On Synthetic Hedge Fund Indices
Synthetic hedge fund indices (SHFIs), also known as 'hedge fund clones' were introduced in 2007, following years of academic research. SHFIs are dynamically managed portfolios of liquid assets (also called replicating factors, which usually exist in futures and exchange-traded funds) that aim at minimising the tracking error with a target non-investable hedge fund index.
Based on research by Innocap Investment Management's, there are four criteria which should be met by SHFIs; they should be representative of the investment universe, transparent, have consistent weighting, timely reporting, stable performance over time, and they should be investable.
SHFIs are to hedge funds what exhange traded funds (ETFs) are to mutual funds, a liquid, low-cost and transparent way to expose a portfolio to the asset class. SHFIs that target a good hedge fund index and use a sophisticated tracking model applied to a wide range of liquid and transparent financial instruments should exhibit an interesting risk-return profile, particularly for the liquidity risk conscious investors.
SHFIs currently constitute a small portion of all hedge fund assets under management because they have been introduced quite recently. Nevertheless, they now constitute a key element in the alternative assets offering of the biggest financial institutions.
Innocap Investment Management is a subsidiary of the National Bank of Canada [TSX: NA-T], it was created to supervise all of the bank's alternative investments activities in capital markets.
Based on research by Innocap Investment Management's, there are four criteria which should be met by SHFIs; they should be representative of the investment universe, transparent, have consistent weighting, timely reporting, stable performance over time, and they should be investable.
SHFIs are to hedge funds what exhange traded funds (ETFs) are to mutual funds, a liquid, low-cost and transparent way to expose a portfolio to the asset class. SHFIs that target a good hedge fund index and use a sophisticated tracking model applied to a wide range of liquid and transparent financial instruments should exhibit an interesting risk-return profile, particularly for the liquidity risk conscious investors.
SHFIs currently constitute a small portion of all hedge fund assets under management because they have been introduced quite recently. Nevertheless, they now constitute a key element in the alternative assets offering of the biggest financial institutions.
Innocap Investment Management is a subsidiary of the National Bank of Canada [TSX: NA-T], it was created to supervise all of the bank's alternative investments activities in capital markets.
25 Feb 2008
New York Hedge Fund Spends $27 Million On Alvarion
After buying a $27 million stake in Alvarion, New York-based hedge fund Renaissance Technologies Corporation has become a party at interest with 5.76% of the company.
With a market cap of $480 million, Israeli company Alvarion provides WiMAX broadband communications technology, they posted $236.6 million in revenue for 2007.
Alvarion said in a document filed with the US Securities and Exchange Commission that the transaction was made on November 8, 2007. Renaissance Technologies is now the largest shareholder in Alvarion, which until now did not have a shareholder owning more than 5%, the threshold of a party at interest under Israeli law.
Renaissance Technologies was founded in 1982 by cryptanalyst James Harris Simons and is now one of the world’s largest hedge funds. The hedge fund uses statistical and mathematical models to make its investments. It has more than $12 billion under management.
With a market cap of $480 million, Israeli company Alvarion provides WiMAX broadband communications technology, they posted $236.6 million in revenue for 2007.
Alvarion said in a document filed with the US Securities and Exchange Commission that the transaction was made on November 8, 2007. Renaissance Technologies is now the largest shareholder in Alvarion, which until now did not have a shareholder owning more than 5%, the threshold of a party at interest under Israeli law.
Renaissance Technologies was founded in 1982 by cryptanalyst James Harris Simons and is now one of the world’s largest hedge funds. The hedge fund uses statistical and mathematical models to make its investments. It has more than $12 billion under management.
UAE and Qatar Hedge Fund Boom
According to research conducted by banking group Mirabaud, the Middle East is set to become increasingly active in the global hedge fund industry. The report also said that the UAE and Qatar could potentially be playing dominant roles in the region.
Mirabaud forecasts that hedge funds will become increasingly attractive to the region’s ever-more sophisticated regional investors, especially given the high levels of excess liquidity in the Middle East.
CEO Gilles Rollet said, "Globally, hedge fund centres have emerged from the most sophisticated financial centres, such as New York, London, Hong Kong and Singapore. The relevant defining attribute of each of these locations is the maturity of their capital markets….The Dubai International Financial Centre has even taken the step, through its regulating body the Dubai Financial Services Authority, to create a Hedge Fund Code of Practice, giving legal weight to the effort to make Dubai a centre in the hedge fund industry."
Increased institutional investment in the regional capital markets, especially the UAE, is another sign of the maturity of markets here, Mirabaud’s research found. Globally, at a time when most traditional investments are generating low levels of returns, institutional investors are increasingly attracted to alternative asset classes such as hedge funds.
"A hedge fund-friendly environment can be seen to emerge from a region with high levels of excess liquidity and strong degrees of professionalism among regulators and service providers. The Middle East is well known for its access to enormous amounts of excess liquidity due to the high price of oil. In the UAE and Qatar, we are now seeing professionalism from both regulators and service providers grow steadily. Both countries have governments that are committed to forging legal structures that allow for increasing financial sophistication in their respective financial districts. If current trends continue, these two countries will undoubtedly emerge as hedge fund centres, and given enough time, will stand on par with Singapore, Hong Kong and even London and New York." Rollet added.
Mirabaud & Cie, was founded in Geneva in 1819. Originally a bank operating solely in Switzerland, Mirabaud has since developed its brand on three continents. The bank, which has nearly $22 billion in assets under management, has offices in Geneva, Zurich, Basel, Paris, Monaco, London, Montreal, Nassau, Hong Kong and now Dubai.
Mirabaud forecasts that hedge funds will become increasingly attractive to the region’s ever-more sophisticated regional investors, especially given the high levels of excess liquidity in the Middle East.
CEO Gilles Rollet said, "Globally, hedge fund centres have emerged from the most sophisticated financial centres, such as New York, London, Hong Kong and Singapore. The relevant defining attribute of each of these locations is the maturity of their capital markets….The Dubai International Financial Centre has even taken the step, through its regulating body the Dubai Financial Services Authority, to create a Hedge Fund Code of Practice, giving legal weight to the effort to make Dubai a centre in the hedge fund industry."
Increased institutional investment in the regional capital markets, especially the UAE, is another sign of the maturity of markets here, Mirabaud’s research found. Globally, at a time when most traditional investments are generating low levels of returns, institutional investors are increasingly attracted to alternative asset classes such as hedge funds.
"A hedge fund-friendly environment can be seen to emerge from a region with high levels of excess liquidity and strong degrees of professionalism among regulators and service providers. The Middle East is well known for its access to enormous amounts of excess liquidity due to the high price of oil. In the UAE and Qatar, we are now seeing professionalism from both regulators and service providers grow steadily. Both countries have governments that are committed to forging legal structures that allow for increasing financial sophistication in their respective financial districts. If current trends continue, these two countries will undoubtedly emerge as hedge fund centres, and given enough time, will stand on par with Singapore, Hong Kong and even London and New York." Rollet added.
Mirabaud & Cie, was founded in Geneva in 1819. Originally a bank operating solely in Switzerland, Mirabaud has since developed its brand on three continents. The bank, which has nearly $22 billion in assets under management, has offices in Geneva, Zurich, Basel, Paris, Monaco, London, Montreal, Nassau, Hong Kong and now Dubai.
22 Feb 2008
CAI's Two New Investment Strategies
Choice Alternative Investments, Ltd.(CAI) has introduced two new alternative investment strategies into the market.
The first being the Standard & Poor's DTI, which is a low volatility strategy that works particularly well with very large fixed income alternative investment strategies, according to Arne Langaskens, advisor at CAI, "Due to the success of the alternative investment strategies, CAI is also looking to expand its exposure in the alternative and hedge fund arena," he said.
The DTI plans to offer yield enhancement and diversification, it currently has over $725 million allocated to it at this point.
The other is CAI Aggressive Growth Strategy ("CAI AG") which is a high volatility aggressive growth relative strength equity strategy. CAI AG is suited more for investors seeking higher rates of return that can accept high volatility for this segment of their portfolio. A major Swiss Bank seeded the strategy and it now has over $15 million allocated to it.
CAI is an uniquely focused alternative asset manager delivering structure, risk control, seeking long-term performance stewarding global capital.
The first being the Standard & Poor's DTI, which is a low volatility strategy that works particularly well with very large fixed income alternative investment strategies, according to Arne Langaskens, advisor at CAI, "Due to the success of the alternative investment strategies, CAI is also looking to expand its exposure in the alternative and hedge fund arena," he said.
The DTI plans to offer yield enhancement and diversification, it currently has over $725 million allocated to it at this point.
The other is CAI Aggressive Growth Strategy ("CAI AG") which is a high volatility aggressive growth relative strength equity strategy. CAI AG is suited more for investors seeking higher rates of return that can accept high volatility for this segment of their portfolio. A major Swiss Bank seeded the strategy and it now has over $15 million allocated to it.
CAI is an uniquely focused alternative asset manager delivering structure, risk control, seeking long-term performance stewarding global capital.
21 Feb 2008
Tremont Hires FoHF Specialist
Tremont Capital Management announced the appointment of fund of hedge fund specialist Susan Crotty as Managing Director of Investment Management Services.
“Sue’s extensive experience consulting to a wide variety of institutions on fund of hedge fund investing, her understanding of what investors are seeking to accomplish with their alternatives strategy, and her knowledge of our industry delivers tremendous benefits to our clients,” said Rupert Allan, Tremont’s President and Chief Executive Officer.
“We set out to scale our operations as we grow fund of hedge fund assets, expand our global footprint and deliver excellence in investment management,” said Allan. “We have taken some very exciting steps to insure that we have the right senior team in place to achieve those goals.”
Crotty was formerly Senior Vice President, Alternatives Practice Leader, at Callan Associates. Prior to her tenure at Callan, she was a Managing Director at Ark Asset Management and a Senior Consultant at Hamilton & Company. She is also a member of the Investment Committee for the State of New Jersey Pension System. Crotty will report to Robert Stone, Executive Vice President and Global Head of Sales.
Tremont also has offices in London, Toronto and Hong Kong. Tremont operating subsidiaries are regulated around the world by the U.S.’s Securities and Exchange Commission, the U.K.’s Financial Services Authority, the Ontario Securities Commission and the Hong Kong Securities and Futures Commission.
“Sue’s extensive experience consulting to a wide variety of institutions on fund of hedge fund investing, her understanding of what investors are seeking to accomplish with their alternatives strategy, and her knowledge of our industry delivers tremendous benefits to our clients,” said Rupert Allan, Tremont’s President and Chief Executive Officer.
“We set out to scale our operations as we grow fund of hedge fund assets, expand our global footprint and deliver excellence in investment management,” said Allan. “We have taken some very exciting steps to insure that we have the right senior team in place to achieve those goals.”
Crotty was formerly Senior Vice President, Alternatives Practice Leader, at Callan Associates. Prior to her tenure at Callan, she was a Managing Director at Ark Asset Management and a Senior Consultant at Hamilton & Company. She is also a member of the Investment Committee for the State of New Jersey Pension System. Crotty will report to Robert Stone, Executive Vice President and Global Head of Sales.
Tremont also has offices in London, Toronto and Hong Kong. Tremont operating subsidiaries are regulated around the world by the U.S.’s Securities and Exchange Commission, the U.K.’s Financial Services Authority, the Ontario Securities Commission and the Hong Kong Securities and Futures Commission.
TCI Challenges Japanese Government On Foreign Investments
UK hedge fund TCI has challenged Japanese attempts to control foreign investments. In a bid to boost its stake in Japanese utility J-Power to up to 20 percent, the Children's Investment Fund, or TCI, has been pressuring the electricity wholesaler to improve corporate governance.
The activist investor has even said in a statement that it would take the Japanese government to court if it rejected its bid. The standoff between TCI and the government over the electricity wholesaler is being watched closely as a test for how open Japan is to foreign investment.
Foreign investors who are seeking stakes above 10% in sectors that Japan considers fundamental to national security such as utilities, arms, nuclear power equipment and aircraft must seek government approval.
J-Power plans to complete its first nuclear power plant in 2012.
TCI, named after its donations to children's charities, manages over $10 billion of assets globally.
Hedge Fund Managers Indicted
Five individuals who defrauded hedge fund investors of more than $200 million dollars have been indicted on charges of conspiracy and wire fraud, according to an FBI release.
Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida named the hedge fund managers in the indictment as Michael Lauer, Martin Garvey, and Eric Hauser, co-owners of management companies which directed the hedge funds, and Laurence Isaacson and Milton Barbarosh, who had financial interests in Boca Raton, Fla.-based “shell” companies in which the hedge funds invested.
All of the defendants are charged with one count of conspiracy to commit mail, wire and securities fraud and six counts of wire fraud. If convicted, each of the defendants faces a maximum sentence of 20 years and a $250,000 fine for each count of wire fraud and five years and a $250,000 fine for the conspiracy count. The indictment also seeks forfeiture of their criminal proceeds.
According to the indictment, Lauer, as founder and primary manager, formed and directed several hedge funds, collectively known as the Lancer Group hedge funds. From October 1999 to July 2003, Lauer and his co-defendants manipulated the closing market price of thinly-traded shell company securities to falsely inflate the value of the Lancer Group hedge funds. Lauer, Isaacson, and Barborosh identified “shell” companies, including ones owned by Barbarosh, in which the Lancer Group would buy large quantities of “restricted” stock at pennies per share in private transactions.
Lauer, Garvey and Hauser next directed brokers to buy a small amount of the same securities for the Lancer Group at a much higher open market price and to make additional small purchases to drive up the price to a closing “target price.” Lauer then falsely valued all of the securities held by the Lancer Group, including those restricted shares obtained for pennies per share, at the much higher closing price, which falsely boosted the 20 percent performance fees paid to the management companies; induced new investors to buy into the funds; and kept existing investors in the funds.
To cover up and perpetuate the scheme, the indictment alleges, Lauer also created fake portfolios of the securities supposedly held by the Lancer Group and obtained falsely inflated appraisals of the shell companies through Isaacson and Barbarosh.
An indictment is merely a charge. All defendants are presumed innocent until proven guilty.
Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida named the hedge fund managers in the indictment as Michael Lauer, Martin Garvey, and Eric Hauser, co-owners of management companies which directed the hedge funds, and Laurence Isaacson and Milton Barbarosh, who had financial interests in Boca Raton, Fla.-based “shell” companies in which the hedge funds invested.
All of the defendants are charged with one count of conspiracy to commit mail, wire and securities fraud and six counts of wire fraud. If convicted, each of the defendants faces a maximum sentence of 20 years and a $250,000 fine for each count of wire fraud and five years and a $250,000 fine for the conspiracy count. The indictment also seeks forfeiture of their criminal proceeds.
According to the indictment, Lauer, as founder and primary manager, formed and directed several hedge funds, collectively known as the Lancer Group hedge funds. From October 1999 to July 2003, Lauer and his co-defendants manipulated the closing market price of thinly-traded shell company securities to falsely inflate the value of the Lancer Group hedge funds. Lauer, Isaacson, and Barborosh identified “shell” companies, including ones owned by Barbarosh, in which the Lancer Group would buy large quantities of “restricted” stock at pennies per share in private transactions.
Lauer, Garvey and Hauser next directed brokers to buy a small amount of the same securities for the Lancer Group at a much higher open market price and to make additional small purchases to drive up the price to a closing “target price.” Lauer then falsely valued all of the securities held by the Lancer Group, including those restricted shares obtained for pennies per share, at the much higher closing price, which falsely boosted the 20 percent performance fees paid to the management companies; induced new investors to buy into the funds; and kept existing investors in the funds.
To cover up and perpetuate the scheme, the indictment alleges, Lauer also created fake portfolios of the securities supposedly held by the Lancer Group and obtained falsely inflated appraisals of the shell companies through Isaacson and Barbarosh.
An indictment is merely a charge. All defendants are presumed innocent until proven guilty.
20 Feb 2008
Boneparth Joins Hall Capital Partners
Hall Capital Partners LLC today announced that John F. Boneparth will join the firm as President. Mr. Boneparth will join Chief Executive Officer and Chief Investment Officer Kathryn A. Hall and Director of Investment Advisory Services John W. Buoymaster as a member of the firm’s Executive Committee. He will also serve on Hall Capital’s Board of Directors along with Ms. Hall; Mr. Buoymaster; F. Warren Hellman, Co-founder and Chairman of Hellman & Friedman; Mark E. McKee, President of Capital Alternatives; and Matthew R. Barger, Senior Advisor for Hellman & Friedman.
Hall Capital is an independent, privately owned SEC-registered investment advisory firm with offices in San Francisco and New York. The firm, which has $22 billion in assets under management, has established a strong reputation as a successful investment partner and manager of traditional and alternative investment strategies. Hall Capital has a 13-year record of building and managing customized global investment portfolios for individuals, families, and institutions.
“We are extremely pleased to have John Boneparth join Hall Capital Partners,” said Kathryn Hall. “His nearly 30 years of experience in the investment management industry as well as his extraordinary talent in building and managing investment management firms will be an important contributor to our company’s growth and future success.”
“Katie Hall and her management team have built a world-class investment platform that offers its clients access to the highest quality traditional and alternative investment products,” said John Boneparth. “I am confident that these products will have great appeal to both institutional and individual investors when they are distributed more broadly, both in the U.S. and abroad.”
“John Boneparth has had great success growing and managing businesses throughout his career,” said Warren Hellman. “The board believes that with John joining Katie’s team, the firm is well-positioned for significant growth and expansion.”
Mr. Boneparth founded Corinthian Cove Consulting, LLC in 2005, where he consulted to investment management companies on business, sales, marketing, client service, and product strategies. Before founding Corinthian Cove Consulting, Mr. Boneparth spent 14 years at Putnam Investments where he held various positions including Chief of U.S. Institutional Sales, Head of International Sales & Client Service, Head of International Business, and Head of Putnam Global Institutional Management. Mr. Boneparth holds a M.S. from University of Pennsylvania and a B.S. from The Wharton School, University of Pennsylvania.
About Hall Capital Partners LLC
Hall Capital Partners LLC (www.hallcapital.com) is an independent, privately owned SEC-registered investment advisory firm with offices in San Francisco and New York. Founded by Kathryn Hall, the firm has a 13-year record in building and managing global investment portfolios, and has established a strong reputation as a successful investor and partner. As of September 30, 2007, the firm directed investment assets in excess of $22 billion for more than 100 clients and its funds of funds program.
Hall Capital is an independent, privately owned SEC-registered investment advisory firm with offices in San Francisco and New York. The firm, which has $22 billion in assets under management, has established a strong reputation as a successful investment partner and manager of traditional and alternative investment strategies. Hall Capital has a 13-year record of building and managing customized global investment portfolios for individuals, families, and institutions.
“We are extremely pleased to have John Boneparth join Hall Capital Partners,” said Kathryn Hall. “His nearly 30 years of experience in the investment management industry as well as his extraordinary talent in building and managing investment management firms will be an important contributor to our company’s growth and future success.”
“Katie Hall and her management team have built a world-class investment platform that offers its clients access to the highest quality traditional and alternative investment products,” said John Boneparth. “I am confident that these products will have great appeal to both institutional and individual investors when they are distributed more broadly, both in the U.S. and abroad.”
“John Boneparth has had great success growing and managing businesses throughout his career,” said Warren Hellman. “The board believes that with John joining Katie’s team, the firm is well-positioned for significant growth and expansion.”
Mr. Boneparth founded Corinthian Cove Consulting, LLC in 2005, where he consulted to investment management companies on business, sales, marketing, client service, and product strategies. Before founding Corinthian Cove Consulting, Mr. Boneparth spent 14 years at Putnam Investments where he held various positions including Chief of U.S. Institutional Sales, Head of International Sales & Client Service, Head of International Business, and Head of Putnam Global Institutional Management. Mr. Boneparth holds a M.S. from University of Pennsylvania and a B.S. from The Wharton School, University of Pennsylvania.
About Hall Capital Partners LLC
Hall Capital Partners LLC (www.hallcapital.com) is an independent, privately owned SEC-registered investment advisory firm with offices in San Francisco and New York. Founded by Kathryn Hall, the firm has a 13-year record in building and managing global investment portfolios, and has established a strong reputation as a successful investor and partner. As of September 30, 2007, the firm directed investment assets in excess of $22 billion for more than 100 clients and its funds of funds program.
19 Feb 2008
Centaurus Capital Raises Stake In UK Waste Management
Centaurus Capital Ltd. announced an increase in their stake in Biffa PLC to 4.23%. The London-based hedge fund bought about 1.15 million shares in two tranches, lifting its stake to about 14 million shares, or 3.758%.
UK waste management and recyling business, Biffa, recently agreed to a takeover offer by WasteAcquisitionco, a consortium of various entities within the Montagu Funds, the Global Infrastructure Partners Funds and UCIL at 350 pence per share, valuing Biffa at about £1.23 billion ($2.4 billion).
Centaurus Capital is a private investment management company with an emphasis on Europe. Centaurus was launched in year 2000 and originated from an investment team working together at BNP Paribas since 1993.
In 2005, the Centaurus Alpha Fund was awarded the Hedge Funds Review European Performance Award in the category of Event Driven Fund.
Other hedge funds such as Cheyne Capital Management (UK) LLP and Davidson Kempner European Partners LLP, an affiliate of New York-based Davidson Kempner Capital Management LLC, have emerged as investors in Biffa in the hope of a bidding war.
UK waste management and recyling business, Biffa, recently agreed to a takeover offer by WasteAcquisitionco, a consortium of various entities within the Montagu Funds, the Global Infrastructure Partners Funds and UCIL at 350 pence per share, valuing Biffa at about £1.23 billion ($2.4 billion).
Centaurus Capital is a private investment management company with an emphasis on Europe. Centaurus was launched in year 2000 and originated from an investment team working together at BNP Paribas since 1993.
In 2005, the Centaurus Alpha Fund was awarded the Hedge Funds Review European Performance Award in the category of Event Driven Fund.
Other hedge funds such as Cheyne Capital Management (UK) LLP and Davidson Kempner European Partners LLP, an affiliate of New York-based Davidson Kempner Capital Management LLC, have emerged as investors in Biffa in the hope of a bidding war.
Asia-Pacific Investable Hedge Fund Index Launch
Index compiler MSCI Barra announced today that it is to launch the MSCI Asia-Pacific Hedge Fund OPTIX Index, a new investable hedge fund index designed to reflect the overall structure and composition of the Asia-Pacific hedge fund universe.
Henry Fernandez, CEO of MSCI Barra, said, “The forthcoming launch of the MSCI Asia-Pacific Hedge Fund OPTIX Index responds to investor demand for a liquid and representative investable hedge fund index that reflects the overall Asia-Pacific hedge fund opportunity set. The index is designed to serve as the basis of index-linked financial products, such as funds, derivatives, and structured products.”
The MSCI Asia-Pacific Hedge Fund OPTIX Index will be composed of only funds that are open to new subscriptions and with at least monthly liquidity, according to a statement from the index compiler.
NAI, working with SPARX International (Hong Kong) Limited will be responsible for selecting and conducting due diligence on the hedge fund managers. NAI will also monitor the investment mandate of each managed fund.
Calculation of the index is expected to begin in March 2008, and it is expected to launch with around 20 constituent funds. The index will be constructed and maintained by MSCI Barra according to the MSCI Investable Hedge Fund Index Methodology.
Henry Fernandez, CEO of MSCI Barra, said, “The forthcoming launch of the MSCI Asia-Pacific Hedge Fund OPTIX Index responds to investor demand for a liquid and representative investable hedge fund index that reflects the overall Asia-Pacific hedge fund opportunity set. The index is designed to serve as the basis of index-linked financial products, such as funds, derivatives, and structured products.”
The MSCI Asia-Pacific Hedge Fund OPTIX Index will be composed of only funds that are open to new subscriptions and with at least monthly liquidity, according to a statement from the index compiler.
NAI, working with SPARX International (Hong Kong) Limited will be responsible for selecting and conducting due diligence on the hedge fund managers. NAI will also monitor the investment mandate of each managed fund.
Calculation of the index is expected to begin in March 2008, and it is expected to launch with around 20 constituent funds. The index will be constructed and maintained by MSCI Barra according to the MSCI Investable Hedge Fund Index Methodology.
18 Feb 2008
2008: The Year of Carbon Finance and Trading
The seventh annual Wall Street Green Trading Summit is presenting answers to carbon trading questions such as;
What is carbon neutral? How are clean energy technologies tied to emissions trading? What are the carbon investment opportunities? These and other timely questions will be discussed and answered at the sixth annual Wall Street Green Trading and Finance Summit. Experts from Morrison & Foerster, Evolution Markets, Point Carbon, NYMEX, Natsource, Orion Energy Services, APX, EcoSecurities, and Brown Rudnick..
2008 is the beginning of global carbon markets under Kyoto and is demonstrating a tremendous interest in how to reduce the carbon footprint of companies.
Also feartured at the conference;
• US Carbon Market Developments
• What's the Difference Between Carbon Credits & Offsets
• What's New in European Carbon Trading
• What Impact Will Carbon Regulation Have on US Businesses
• What's the Commercial Value of Carbon Sequestration
• What is NYMEX's Green Exchange
• How Renewables & Carbon Offsets Interact
• What is Carbon Finance
• Why the US is the Next Carbon Market
• Relationship Between Carbon & Renewables
Organized by:
Global Change Associates & Hedge Connection
What is carbon neutral? How are clean energy technologies tied to emissions trading? What are the carbon investment opportunities? These and other timely questions will be discussed and answered at the sixth annual Wall Street Green Trading and Finance Summit. Experts from Morrison & Foerster, Evolution Markets, Point Carbon, NYMEX, Natsource, Orion Energy Services, APX, EcoSecurities, and Brown Rudnick..
2008 is the beginning of global carbon markets under Kyoto and is demonstrating a tremendous interest in how to reduce the carbon footprint of companies.
Also feartured at the conference;
• US Carbon Market Developments
• What's the Difference Between Carbon Credits & Offsets
• What's New in European Carbon Trading
• What Impact Will Carbon Regulation Have on US Businesses
• What's the Commercial Value of Carbon Sequestration
• What is NYMEX's Green Exchange
• How Renewables & Carbon Offsets Interact
• What is Carbon Finance
• Why the US is the Next Carbon Market
• Relationship Between Carbon & Renewables
Organized by:
Global Change Associates & Hedge Connection
MAM Hedge Fund Launch
Martin Asset Management announced the launch of the MAM Global ETF Fund, LP (a domestic Delaware Limited Partnership).
The MAM Global ETF Fund is set to launch on February 15th, the new hedge fund features monthly liquidity and will exclusively invest in Exchange Traded Funds with a Global Macro strategy.
The California based global wealth management platform also features two ETF (Exchange Traded Funds) strategies and one Alternative Energy Strategy.
Their investment style focuses on the overall markets and the economy rather than individual stocks and bonds. The strategy includes the analysis of economic data such as GDP, inflation, unemployment, money flows and overall market conditions to determine the current phase of the business cycle (expansion, peak, contraction or trough).
Once the business cycle is identified, through active management within separately managed accounts, the hedge fund then rebalances its investment portfolios. Custody can be obtained anywhere in the world with no restrictions on nationality of clients.
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
The MAM Global ETF Fund is set to launch on February 15th, the new hedge fund features monthly liquidity and will exclusively invest in Exchange Traded Funds with a Global Macro strategy.
The California based global wealth management platform also features two ETF (Exchange Traded Funds) strategies and one Alternative Energy Strategy.
Their investment style focuses on the overall markets and the economy rather than individual stocks and bonds. The strategy includes the analysis of economic data such as GDP, inflation, unemployment, money flows and overall market conditions to determine the current phase of the business cycle (expansion, peak, contraction or trough).
Once the business cycle is identified, through active management within separately managed accounts, the hedge fund then rebalances its investment portfolios. Custody can be obtained anywhere in the world with no restrictions on nationality of clients.
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
Hedge Fund Vehicle Dexion Absolute Raises $263 Million
Dexion Absolute, a 1.4 billion pound ($2.7 billion) fund of hedge funds (FoHF) announced today that it raised a further $263 million for its hedge fund investments. Dexion had previously raised $950 million above its original target in an oversubscribed share issue in December last year.
According to the Association of Investment Companies, hedge funds made up the biggest proportion both of investment firms' new issues and firms raising additional capital in 2007.
The FoHF's assets are invested in an actively managed portfolio of hedge funds selected by its Investment Advisor and diversified by investment strategy, style and manager. Another fund of hedge funds that is marketed by Dexion Capital, is considering a new offer of shares to meet demand from new and existing investors. The fund of macro hedge funds is managed by Permal Group, part of Legg Mason Inc.
According to the Association of Investment Companies, hedge funds made up the biggest proportion both of investment firms' new issues and firms raising additional capital in 2007.
The FoHF's assets are invested in an actively managed portfolio of hedge funds selected by its Investment Advisor and diversified by investment strategy, style and manager. Another fund of hedge funds that is marketed by Dexion Capital, is considering a new offer of shares to meet demand from new and existing investors. The fund of macro hedge funds is managed by Permal Group, part of Legg Mason Inc.
15 Feb 2008
Hedge Funds & Alternative Investments Handbook
Research and Markets has announced the addition of “The Hedge Funds & Alternative Investments Handbook 2008” to their offering.
The 2008 edition of this guide to the world of alternative investments comes as the playing field becomes more exciting due to new concepts, regulation and increasingly global reach of hedge funds. The handbook brings together an internationally acclaimed editorial board of experts in the field of alternative investments.
Including topical debate, discussion and the latest research on the issues of the moment within the hedge funds and alternative investments world. Leading players from exchanges, funds, law firms and investment banks present exclusive insights into offshore developments, the key regions, regulation and the role of education and ethics in this rapidly changing and evolving scene.
Articles in this year’s Hedge Funds and Alternative Investments Handbook explore;
alternative beta replication
precious metals
the role of branding
self regulation
global activism
ethics and regional perspectives.
The 2008 edition of this guide to the world of alternative investments comes as the playing field becomes more exciting due to new concepts, regulation and increasingly global reach of hedge funds. The handbook brings together an internationally acclaimed editorial board of experts in the field of alternative investments.
Including topical debate, discussion and the latest research on the issues of the moment within the hedge funds and alternative investments world. Leading players from exchanges, funds, law firms and investment banks present exclusive insights into offshore developments, the key regions, regulation and the role of education and ethics in this rapidly changing and evolving scene.
Articles in this year’s Hedge Funds and Alternative Investments Handbook explore;
alternative beta replication
precious metals
the role of branding
self regulation
global activism
ethics and regional perspectives.
14 Feb 2008
HedgeCo Networks Offers Clients of NorthPoint Trading Suite of HedgeCo Web Services
HedgeCo LLC, a premier hedge fund database, consulting and services company, announced today a strategic relationship with NorthPoint Trading Partners, LLC. This relationship will offer clients of NorthPoint a chance to enhance their Internet presence through the use of the HedgeCo Websites Platform.
"Through our partnerships, HedgeCo is striving to enhance the offerings of our partners, as well as draw on expertise of our partners to take the HedgeCo Networks products to a new level." said Evan Rapoport, Chief Executive Officer of HedgeCo, LLC. "By having the ability to offer our products to their clients, our partners will find that their offerings and position in the market will strengthen substantially."
The announcement once again shows how HedgeCo Networks continues to distinguish its company from other service providers by offering high-tech, cost-effective services and analytic tools.
Products being offered through this agreement include the HedgeCo Hedge Fund Website platform, the Hedge Fund Calculator analytics tool, and the opportunity to integrate with HedgeCo.Net, the premier hedge fund Internet portal.
“NorthPoint Trading is committed to being able to provide every possible advantage and resource to help our clients grow their business. We are excited to be able to offer the expertise and experience of the Hedgeco Websites team to our clients.” said Michael DeJarnette, Co-Founder and President of NorthPoint Trading Partners, LLC, a broker/dealer focused on providing Prime Brokerage to small to mid-sized hedge funds.
HedgeCo Networks is actively seeking partners in various verticals to develop and deploy future products.
HedgeCo, LLC manages HedgeCo.Net the premier Hedge Fund Database and Information Portal. HedgeCo offers a wide variety of services, including website design, consultation, and third party marketing.
The HedgeCo Websites team has worked with the Hedge Fund industry for 3 years. Drawing on the experience used in creating and managing HedgeCo.Net over 150 websites for Hedge Fund firms in USA, Europe and Australia.
NorthPoint Trading Partners, LLC is a
premier institutional brokerage and fund services company, dedicated to providing prime brokerage services to small and medium sized hedge funds. Through a fully disclosed clearing relationship with Goldman Sachs Execution and Clearing, L.P. (GSEC), clients receive the benefits of boutique firm service and pricing, combined with GSEC's professional clearing and prime brokerage services, integrated portfolio and trading functionality, suite of pre- and post-trade analytics, and direct access
to the Goldman Sachs & Co.'s securities lending group.
Goldman Sachs Execution & Clearing, L.P. is not affiliated with NorthPoint Trading Partners, LLC or any of its subsidiaries or affiliates.
"Through our partnerships, HedgeCo is striving to enhance the offerings of our partners, as well as draw on expertise of our partners to take the HedgeCo Networks products to a new level." said Evan Rapoport, Chief Executive Officer of HedgeCo, LLC. "By having the ability to offer our products to their clients, our partners will find that their offerings and position in the market will strengthen substantially."
The announcement once again shows how HedgeCo Networks continues to distinguish its company from other service providers by offering high-tech, cost-effective services and analytic tools.
Products being offered through this agreement include the HedgeCo Hedge Fund Website platform, the Hedge Fund Calculator analytics tool, and the opportunity to integrate with HedgeCo.Net, the premier hedge fund Internet portal.
“NorthPoint Trading is committed to being able to provide every possible advantage and resource to help our clients grow their business. We are excited to be able to offer the expertise and experience of the Hedgeco Websites team to our clients.” said Michael DeJarnette, Co-Founder and President of NorthPoint Trading Partners, LLC, a broker/dealer focused on providing Prime Brokerage to small to mid-sized hedge funds.
HedgeCo Networks is actively seeking partners in various verticals to develop and deploy future products.
HedgeCo, LLC manages HedgeCo.Net the premier Hedge Fund Database and Information Portal. HedgeCo offers a wide variety of services, including website design, consultation, and third party marketing.
The HedgeCo Websites team has worked with the Hedge Fund industry for 3 years. Drawing on the experience used in creating and managing HedgeCo.Net over 150 websites for Hedge Fund firms in USA, Europe and Australia.
NorthPoint Trading Partners, LLC is a
premier institutional brokerage and fund services company, dedicated to providing prime brokerage services to small and medium sized hedge funds. Through a fully disclosed clearing relationship with Goldman Sachs Execution and Clearing, L.P. (GSEC), clients receive the benefits of boutique firm service and pricing, combined with GSEC's professional clearing and prime brokerage services, integrated portfolio and trading functionality, suite of pre- and post-trade analytics, and direct access
to the Goldman Sachs & Co.'s securities lending group.
Goldman Sachs Execution & Clearing, L.P. is not affiliated with NorthPoint Trading Partners, LLC or any of its subsidiaries or affiliates.
12 Feb 2008
Report Examines Developments in the Spanish Fund Supermarket
Research and Markets has announced the addition of "Fund supermarkets in Spain 2007" to their offering. The report examines developments in the Spanish fund supermarket sector and assesses the distribution channels that are in operation. The report analyzes both the current and possible future trends of the industry.
Spanish legislation has recently made provisions for two new fund classes available to retail investors, exchange traded funds and funds of hedge funds, allowing fund supermarkets to offer a comprehensive range of investment funds. Covering both domestic and international markets as they exercise considerable control over the fortunes of fund managers through their short-lists of recommended funds.
Year-on-year growth in assets under management fell from 11.94% in 2005 to 1.31% in 2006. This sharp decline in growth is partly attributed to a growing preference for bank deposits (among conservative investors) triggered largely by the introduction of a new tax regime, and increasing demand for foreign funds (among more sophisticated investors).
Spanish legislation has recently made provisions for two new fund classes available to retail investors, exchange traded funds and funds of hedge funds, allowing fund supermarkets to offer a comprehensive range of investment funds. Covering both domestic and international markets as they exercise considerable control over the fortunes of fund managers through their short-lists of recommended funds.
Year-on-year growth in assets under management fell from 11.94% in 2005 to 1.31% in 2006. This sharp decline in growth is partly attributed to a growing preference for bank deposits (among conservative investors) triggered largely by the introduction of a new tax regime, and increasing demand for foreign funds (among more sophisticated investors).
Hedge Funds Decline in January 2008
The Greenwich Global Hedge Fund Index (GGHFI), fell -2.44% in January amid severe declines in global equity markets such as the S&P 500, MSCI World Equity, and FTSE 100 indices.
Meanwhile, 79% of hedge funds outperformed the S&P 500, with 33% ending the month in positive territory.
Margaret Gilbert, Managing Director of GGHFI said, "Despite January being hedge funds’ weakest month since July 2002, hedge funds fell far less than equities..... This ‘downside protection’ is particularly apparent over the last twelve months with hedge funds returning +7.14%, outperforming the S&P 500 by +9.45% during this period."
For January, all four hedge fund strategy groups outperformed the S&P 500, according to the report. Directional Trading ended up +0.81%, while dedicated Short Sellers were the stellar performers, up +6.99%. January’s Index currently includes 1,011 constituent funds.
Greenwich Alternative Investments, LLC manages one of the world's largest hedge fund databases and is a provider of hedge fund indices, asset management services and research to institutional investors worldwide.
Meanwhile, 79% of hedge funds outperformed the S&P 500, with 33% ending the month in positive territory.
Margaret Gilbert, Managing Director of GGHFI said, "Despite January being hedge funds’ weakest month since July 2002, hedge funds fell far less than equities..... This ‘downside protection’ is particularly apparent over the last twelve months with hedge funds returning +7.14%, outperforming the S&P 500 by +9.45% during this period."
For January, all four hedge fund strategy groups outperformed the S&P 500, according to the report. Directional Trading ended up +0.81%, while dedicated Short Sellers were the stellar performers, up +6.99%. January’s Index currently includes 1,011 constituent funds.
Greenwich Alternative Investments, LLC manages one of the world's largest hedge fund databases and is a provider of hedge fund indices, asset management services and research to institutional investors worldwide.
Hedge Funds World Conference
The 2008 ninth annual Hedge Funds World Middle East Conference is to be held at the Madinat Jumeirah Hotel from 3-6 March 2008.
A highlight will be the Second Annual Hedge Funds World Middle East Awards Ceremony on 4 March, presented by Man Investments and Terrapinn. The awards recognise excellence and innovation in the Middle East hedge fund industry and promote the asset class in the region. Finalists for the awards are listed below.
Man Investments, one of the world's leading providers of alternative investments, is once again a principal sponsor of the event. The company, which has prospered in the Middle East for more than 20 years, has strongly supported the Hedge Funds World Middle East Conference since the first such event in 1999.
A special highlight at the conference will be the welcome address by Nasser Al Shaali, CEO of the Dubai International Financial Centre Authority. The DIFC has established itself as the first international financial centre of the region and the fastest growing in the world. Today it is home to more than 500 companies including many of the world's leading financial firms.
Keynote speakers include industry leaders such as: Sindo Oliveros, director of Pension Plan and Endowments, the World Bank Pension Fund; Ronald A. Rolighed, Managing Director, Harris Alternatives LLC; Ikho Suh, Head of Investment Strategy, Korea Investment Corporation; Christopher Durand, Head of Alternative Investments, Abu Dhabi Investment Company; Dr Mehraj Mattoo, Global Head of Commerzbank Alternative Investment Strategies; Ann Thivierge, MD and Head of Active International Allocation Strategy, Morgan Stanley; and Dr Susgil Wadhwani, CBE, CEO, Wadhwani Asset Management.
Antoine Massad, Chief Executive of Man Investments Middle East Limited who is once again chairing the event said, 'The hedge fund industry has made big advances in the region in recent years, offering investors wider choices and a range of new opportunities.. At this event, we will again recognise this progress and promote it through the Hedge Funds World Middle East Awards.'
A highlight will be the Second Annual Hedge Funds World Middle East Awards Ceremony on 4 March, presented by Man Investments and Terrapinn. The awards recognise excellence and innovation in the Middle East hedge fund industry and promote the asset class in the region. Finalists for the awards are listed below.
Man Investments, one of the world's leading providers of alternative investments, is once again a principal sponsor of the event. The company, which has prospered in the Middle East for more than 20 years, has strongly supported the Hedge Funds World Middle East Conference since the first such event in 1999.
A special highlight at the conference will be the welcome address by Nasser Al Shaali, CEO of the Dubai International Financial Centre Authority. The DIFC has established itself as the first international financial centre of the region and the fastest growing in the world. Today it is home to more than 500 companies including many of the world's leading financial firms.
Keynote speakers include industry leaders such as: Sindo Oliveros, director of Pension Plan and Endowments, the World Bank Pension Fund; Ronald A. Rolighed, Managing Director, Harris Alternatives LLC; Ikho Suh, Head of Investment Strategy, Korea Investment Corporation; Christopher Durand, Head of Alternative Investments, Abu Dhabi Investment Company; Dr Mehraj Mattoo, Global Head of Commerzbank Alternative Investment Strategies; Ann Thivierge, MD and Head of Active International Allocation Strategy, Morgan Stanley; and Dr Susgil Wadhwani, CBE, CEO, Wadhwani Asset Management.
Antoine Massad, Chief Executive of Man Investments Middle East Limited who is once again chairing the event said, 'The hedge fund industry has made big advances in the region in recent years, offering investors wider choices and a range of new opportunities.. At this event, we will again recognise this progress and promote it through the Hedge Funds World Middle East Awards.'
11 Feb 2008
Hedge Fund Launches By QIM
US based Quantitative Investment Management(QIM), has launched two new hedge funds, the Quantitative Tactical Fund and the Quantitative Fund. Director of Marketing, John McAllister said of the launches, "The multi-strat gives us an ability to provide a fund of funds using three products that we expect to have very low correlations to each other, and it is expected to have the best Sharpe ratio of all the products."
One of the hedge funds launched is a diversified equities hedge fund, currently trading only U.S. names. With $126.8 million in assets under management, the Tactical Fund trades the 1,500 most liquid U.S. names, with plans to expand into Europe and Japan this year.
The smaller of the two funds, the Quantitative Fund, is a multi-strategy fund of funds with $1 million currently in assets under management. It currently invests solely in the 1X versions of other QIM funds, including the Global, Tactical and the Ultra funds. Allocations made to the fund in 2008 will receive a 10% fee discount for the life of the investment.
With $2.8 billion in assets under management, QIM is a global investment firm specializing in alternative investment strategies for institutional and private investors. QIM employs a proprietary quantitative approach to trading financial and commodity futures through its flagship offering, the QIM Global Program.
One of the hedge funds launched is a diversified equities hedge fund, currently trading only U.S. names. With $126.8 million in assets under management, the Tactical Fund trades the 1,500 most liquid U.S. names, with plans to expand into Europe and Japan this year.
The smaller of the two funds, the Quantitative Fund, is a multi-strategy fund of funds with $1 million currently in assets under management. It currently invests solely in the 1X versions of other QIM funds, including the Global, Tactical and the Ultra funds. Allocations made to the fund in 2008 will receive a 10% fee discount for the life of the investment.
With $2.8 billion in assets under management, QIM is a global investment firm specializing in alternative investment strategies for institutional and private investors. QIM employs a proprietary quantitative approach to trading financial and commodity futures through its flagship offering, the QIM Global Program.
Hedge Fund Awareness
A white paper released today by SEI, titled "Five Critical Challenges for Hedge Funds Taking Aim at the Institutional Market", details the growing institutional acceptance of hedge fund investing.
Forty-seven percent of the institutions surveyed said they already invest in hedge funds. Within that group, 73% of pension plans and 55% of institutions overall said they had increased hedge fund allocations over the last several years. Portfolio allocations to hedge funds averaged 30% for endowments, 13% for pension funds, and 24% for institutions.
The paper is based partly on a survey of more than 100 institutional investors by SEI and the research firm of Infovest21.
Hedge fund assets under management have been growing at a compound annual rate of 26% since 1990, reports the SEI analysis, with much of that growth coming from the institutional market. "To maintain that growth trajectory, the hedge fund industry will need to branch out from its traditional high-net-worth, foundation, and endowment clientele to serve the broader institutional market," said Paul Schaeffer, Managing Director of Strategy and Innovation for SEI’s Investment Manager Services division. "But to compete for those assets, the industry must recognise that large institutions have a distinct set of demands concerning issues such as the quality of infrastructure, transparency, and risk."
At the same time, institutions expressed continued concerns with hedge fund investing. “Headline risk” was named by 37% of survey respondents as their biggest worry, followed by lack of transparency (19%) and poor performance (15%). Institutions also remain cautious in selecting hedge funds, the survey found, devoting an average of seven months to due diligence and 12 additional weeks to approval.
In the paper, SEI identifies five challenges hedge funds should address in order to attract more institutional assets:
1) Demonstrate institutional-quality infrastructure and operations. Infrastructure was ranked the number-one criterion in hedge fund selection, with 46% of those surveyed naming it most important. Of those who responded this way, 54% said it was because “better managed firms produce better returns.” The quality of fund administration was a prime concern. Of those respondents most concerned with infrastructure, two-thirds said it is unacceptable for funds to handle their own administration internally, and half demand a “big-name” administrator; 81% said they take steps to verify that hedge fund investments are valued independently.
2) Meet investor demands for reporting and transparency. The lack of transparency was the second most commonly cited worry with hedge fund investing, with 19% of institutions ranking it number one. This concern was greatest at the strategy level, with 85% of respondents saying they would not invest in a strategy they do not fully understand. More than half said they seek portfolio transparency at the industry or sector level, and one-third were most concerned with transparency of the investment process. Only 11% said they seek transparency of specific investment positions.
3) Build stable management teams with a full range of skill sets. Interviewees ranked “people at the firm” as the third most important factor in hedge fund selection, surpassed only by “firm infrastructure” and “performance.” Other survey responses revealed that investor concerns with hedge funds’ organisational stability and staffing are not confined to those making investment decisions, but cut across all key management and support positions.
4) Shift focus from performance to investment disciplines. Institutions are as concerned with investment process and risk profile as they are with the level of absolute returns, the survey revealed. Interviewees ranked “consistent, stable returns,” “uncorrelated returns,” and “high risk-adjusted returns” as more important objectives than “high absolute returns.” Seventy-two percent of interviewees said the investment strategy, rather than performance, is their starting point for hedge fund selection.
5) Keep abreast of public policy and regulatory trends. Citing ongoing deliberations over hedge-fund-related regulation, tax policies, and accounting rules and investor concerns with “headline risk,” the paper urges the industry to “commit whatever resources are needed to ensure that hedge fund managers meet the highest possible standards for their overall compliance and general business practices.”
“The overriding message is that institutions clearly prefer to do business with institutional-style organisations,” concluded Schaeffer. “For hedge funds, the challenge will be to fit the profile of an institutional-quality fund while preserving the performance attributes that attracted major investors in the first place.”
Forty-seven percent of the institutions surveyed said they already invest in hedge funds. Within that group, 73% of pension plans and 55% of institutions overall said they had increased hedge fund allocations over the last several years. Portfolio allocations to hedge funds averaged 30% for endowments, 13% for pension funds, and 24% for institutions.
The paper is based partly on a survey of more than 100 institutional investors by SEI and the research firm of Infovest21.
Hedge fund assets under management have been growing at a compound annual rate of 26% since 1990, reports the SEI analysis, with much of that growth coming from the institutional market. "To maintain that growth trajectory, the hedge fund industry will need to branch out from its traditional high-net-worth, foundation, and endowment clientele to serve the broader institutional market," said Paul Schaeffer, Managing Director of Strategy and Innovation for SEI’s Investment Manager Services division. "But to compete for those assets, the industry must recognise that large institutions have a distinct set of demands concerning issues such as the quality of infrastructure, transparency, and risk."
At the same time, institutions expressed continued concerns with hedge fund investing. “Headline risk” was named by 37% of survey respondents as their biggest worry, followed by lack of transparency (19%) and poor performance (15%). Institutions also remain cautious in selecting hedge funds, the survey found, devoting an average of seven months to due diligence and 12 additional weeks to approval.
In the paper, SEI identifies five challenges hedge funds should address in order to attract more institutional assets:
1) Demonstrate institutional-quality infrastructure and operations. Infrastructure was ranked the number-one criterion in hedge fund selection, with 46% of those surveyed naming it most important. Of those who responded this way, 54% said it was because “better managed firms produce better returns.” The quality of fund administration was a prime concern. Of those respondents most concerned with infrastructure, two-thirds said it is unacceptable for funds to handle their own administration internally, and half demand a “big-name” administrator; 81% said they take steps to verify that hedge fund investments are valued independently.
2) Meet investor demands for reporting and transparency. The lack of transparency was the second most commonly cited worry with hedge fund investing, with 19% of institutions ranking it number one. This concern was greatest at the strategy level, with 85% of respondents saying they would not invest in a strategy they do not fully understand. More than half said they seek portfolio transparency at the industry or sector level, and one-third were most concerned with transparency of the investment process. Only 11% said they seek transparency of specific investment positions.
3) Build stable management teams with a full range of skill sets. Interviewees ranked “people at the firm” as the third most important factor in hedge fund selection, surpassed only by “firm infrastructure” and “performance.” Other survey responses revealed that investor concerns with hedge funds’ organisational stability and staffing are not confined to those making investment decisions, but cut across all key management and support positions.
4) Shift focus from performance to investment disciplines. Institutions are as concerned with investment process and risk profile as they are with the level of absolute returns, the survey revealed. Interviewees ranked “consistent, stable returns,” “uncorrelated returns,” and “high risk-adjusted returns” as more important objectives than “high absolute returns.” Seventy-two percent of interviewees said the investment strategy, rather than performance, is their starting point for hedge fund selection.
5) Keep abreast of public policy and regulatory trends. Citing ongoing deliberations over hedge-fund-related regulation, tax policies, and accounting rules and investor concerns with “headline risk,” the paper urges the industry to “commit whatever resources are needed to ensure that hedge fund managers meet the highest possible standards for their overall compliance and general business practices.”
“The overriding message is that institutions clearly prefer to do business with institutional-style organisations,” concluded Schaeffer. “For hedge funds, the challenge will be to fit the profile of an institutional-quality fund while preserving the performance attributes that attracted major investors in the first place.”
8 Feb 2008
IFC Seminar
The Islamic Financial Services Board, the World Bank Group Corporate Governance Department, and the IFC Global Corporate Governance Forum are organising a joint seminar on corporate governance issues in Islamic finance. The two-day seminar will be hosted in Manama by the Central Bank of Bahrain on March 11 to 12, 2008.
The Seminar aims to increase awareness of corporate governance issues in Islamic finance, including banking, insurance, and capital markets (particularly collective investment schemes), among financial regulators and market participants. It will be structured around the corporate governance standards that were developed by the Islamic Financial Services Board, with insights from regulatory officials, corporate governance specialists from international multilateral agencies, and industry practitioners.
H.E. Rasheed Mohammed Al Maraj, Governor of the Central Bank of Bahrain, and Professor Rifaat Ahmed Abdel Karim, Secretary General of the Islamic Financial Services Board, will deliver the opening and welcoming remarks.
Peter Dey, Chairman of the Forum's Private Sector Advisory Group, will deliver a keynote address on the Cross-Sectoral Approach toward Good Governance. Dey served as chairman of the Toronto Stock Exchange Committee on Corporate Governance in Canada, which released a report entitled Where Were the Directors? (also known as the Dey Report) in December 1994. He will be joined by 21 other speakers.
The seminar's main objectives are to:
Highlight corporate governance issues specific to institutions that offer Islamic financial services and to help regulators and market participants improve their understanding of these, especially as the Islamic financial services industry continues to grow rapidly within the global financial system.
Provide stakeholders an opportunity to exchange views and experience about good governance frameworks and best practices.
Generate discussion and policy recommendations about strengthening and improving the corporate governance of institutions that offer Islamic financial services, in accordance with internationally accepted standards.
Those interested in attending the seminar can download the registration form from www.ifsb.org.
The Seminar aims to increase awareness of corporate governance issues in Islamic finance, including banking, insurance, and capital markets (particularly collective investment schemes), among financial regulators and market participants. It will be structured around the corporate governance standards that were developed by the Islamic Financial Services Board, with insights from regulatory officials, corporate governance specialists from international multilateral agencies, and industry practitioners.
H.E. Rasheed Mohammed Al Maraj, Governor of the Central Bank of Bahrain, and Professor Rifaat Ahmed Abdel Karim, Secretary General of the Islamic Financial Services Board, will deliver the opening and welcoming remarks.
Peter Dey, Chairman of the Forum's Private Sector Advisory Group, will deliver a keynote address on the Cross-Sectoral Approach toward Good Governance. Dey served as chairman of the Toronto Stock Exchange Committee on Corporate Governance in Canada, which released a report entitled Where Were the Directors? (also known as the Dey Report) in December 1994. He will be joined by 21 other speakers.
The seminar's main objectives are to:
Highlight corporate governance issues specific to institutions that offer Islamic financial services and to help regulators and market participants improve their understanding of these, especially as the Islamic financial services industry continues to grow rapidly within the global financial system.
Provide stakeholders an opportunity to exchange views and experience about good governance frameworks and best practices.
Generate discussion and policy recommendations about strengthening and improving the corporate governance of institutions that offer Islamic financial services, in accordance with internationally accepted standards.
Those interested in attending the seminar can download the registration form from www.ifsb.org.
7 Feb 2008
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."
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."
5 Feb 2008
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.
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.
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.
4 Feb 2008
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.
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.
"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.
30 Jan 2008
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.
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.
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.
29 Jan 2008
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.
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.
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.
28 Jan 2008
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."
"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.”
“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.”
25 Jan 2008
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
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.
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.
23 Jan 2008
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.
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.
22 Jan 2008
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!
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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."
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."
21 Jan 2008
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.
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.
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.
18 Jan 2008
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)
14 Jan 2008
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.
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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.
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.
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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.
7 Jan 2008
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.
"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.
3 Jan 2008
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.
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.
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.
2 Jan 2008
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.
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.
21 Dec 2007
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.
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.
20 Dec 2007
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.
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.
“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.
18 Dec 2007
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.
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.
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.
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.
14 Dec 2007
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.
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."
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."
13 Dec 2007
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.
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.
12 Dec 2007
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.
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.
"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.
4 Dec 2007
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.
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.
3 Dec 2007
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.
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.
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