“We welcome the publication of the Turner Review, which is an impressive and comprehensive piece of work." Andrew Baker, Chief Executive of The Alternative Investment Management Association (AIMA), said, "It is about the banking system’s role in the current financial crisis and as such its principal focus is the banks, not the hedge fund industry. We are grateful to Lord Turner for his even-handed and measured approach and for not making hedge funds the scapegoat for this crisis."
"The Review says that regulators and central banks need to gather better macro-prudential information on hedge fund activities and we completely support this – in fact we called, in our new policy platform of the 24th February, for the disclosure of systemically significant information by hedge fund managers to their national regulators (not all assets are managed in a collective fund structure). We also called for a global manager authorisation and supervision template on the FSA model. AIMA took the lead on behalf of the hedge fund industry globally in these respects.
We are glad that the Review points out that hedge fund leverage “is typically well below that of banks – about two to three on average” compared with levels of up to 50 times with some of the banks; and that “hedge funds in general are not today bank-like in their activities”.
Given those qualifications, we do appreciate why in the interests of financial stability the Review says that regulators need the power to apply appropriate prudential regulation to hedge funds if they judge that their activities have become bank-like in importance.
We note that any such regulation is hypothetical at present (the Review talks of “if it ever did become appropriate” to do this) and we are glad that Lord Turner has stressed that any regulation in this respect should focus on economic substance not legal form.”
AIMA has more than 1,200 corporate members worldwide, based in 43 countries.
Members include leading hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting firms and fund administrators. They all benefit from AIMA’s active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals and its excellent reputation with regulators worldwide.
18 Mar 2009
17 Mar 2009
European Commission Looking For Commentary From Hedge Funds
In an effort to makes major changes to the EU financial regulation services, the European Commission (EC) has launched 'Driving European Recovery', a consultation on major structural changes to European financial services and markets regulation.
The EC are looking for investors such as hedge funds and other interested parties to interview and submit comments before April 10th, when the EC intends to publish its proposals on the future of the EU supervisory architecture.
The Commission endorses the key principles set out in the recent de Larosière report and calls for a supervisory system combining stronger oversight at EU level with maintaining a key role for national supervisors.
The Commission will propose an ambitious new reform programme, designed to deliver “responsible and reliable financial markets for the future”.
The reform program will present a supervisory framework that detects potential risks early, deals with them effectively before they have an impact, and meets the challenge of complex international financial markets.
The Commission will present a European financial supervision package before the end of May 2009, according to a statement, fill gaps where European or national regulation is insufficient or incomplete, based on a ‘safety first’ approach and improve risk management in financial firms and align pay incentives with sustainable performance.
Among other proposals to be revealed in May, the EC will, "Ensure more effective sanctions against market wrongdoing."
The EC are looking for investors such as hedge funds and other interested parties to interview and submit comments before April 10th, when the EC intends to publish its proposals on the future of the EU supervisory architecture.
The Commission endorses the key principles set out in the recent de Larosière report and calls for a supervisory system combining stronger oversight at EU level with maintaining a key role for national supervisors.
The Commission will propose an ambitious new reform programme, designed to deliver “responsible and reliable financial markets for the future”.
The reform program will present a supervisory framework that detects potential risks early, deals with them effectively before they have an impact, and meets the challenge of complex international financial markets.
The Commission will present a European financial supervision package before the end of May 2009, according to a statement, fill gaps where European or national regulation is insufficient or incomplete, based on a ‘safety first’ approach and improve risk management in financial firms and align pay incentives with sustainable performance.
Among other proposals to be revealed in May, the EC will, "Ensure more effective sanctions against market wrongdoing."
16 Mar 2009
Kids Beating the Market While Hedge Funds Struggle
Despite the credit crunch, sixth formers at Sunningdale Preparatory School, near Ascot, Berkshire, have entered funds into a virtual trading competition... and their early efforts are beating the market. Far from being discouraged by the doom and gloom reported on a daily basis, their interest has been ignited.
William Brooks, Deputy Headmaster, is impressed. "The boys are enthused; they have opened accounts and are trading against each other and the staff. I recently showed some prospective parents around and they could not believe their eyes... two boys discussing what limit to place on their newly acquired Allied Irish stock."
In the past, schools would introduce pupils to share dealing by referring to price lists in the daily newspapers, and tallying results by hand. But the internet has brought realistic trading simulations that bring real time reporting, automated paper trails and full historical records, all at the click of a button.
Brooks continued, "We looked at several alternatives but chose Stockopedia as it enables us to research, discuss and trade all from the same website. Using the site allows the boys to better understand market timing without risking real money, while the online community has helped to generate trading ideas."
Before the markets resumed their recent plunge to new lows, the Sunningdale sixth formers traded a rally in banking stocks and managed to exit profitably. Overall, the Sunningdale funds have outperformed the FTSE benchmark by 8.1% over the last month. At the end of March, the 2009 Stockopedia Challenge officially launches and both the boys and the staff are well placed for the prizes on offer, including flights to visit Wall Street.
Edward Croft, Managing Director of Stockopedia, is pleasantly surprised by the results. "Sunningdale's performance to date has been impressive and one of their boys, Archie Bannister, 13, has been this week's top performer. While the FTSE 100 has dropped 15% recently, his fund has made positive gains - making up 10% in the last week alone... it's a very promising start." Croft is pleased that young people are using the site to learn to become more financially autonomous. "Recent scandals, like the Madoff affair, have shown that blindly trusting market professionals can be extremely dangerous - so it's reassuring to see schools encourage independent thinking and analysis in this area at such an early age".
The Headmaster, Tom Dawson, is "delighted that the boys are filling in some of their free time in this way. My only concern is that they are proving far better investors than I am!"
William Brooks, Deputy Headmaster, is impressed. "The boys are enthused; they have opened accounts and are trading against each other and the staff. I recently showed some prospective parents around and they could not believe their eyes... two boys discussing what limit to place on their newly acquired Allied Irish stock."
In the past, schools would introduce pupils to share dealing by referring to price lists in the daily newspapers, and tallying results by hand. But the internet has brought realistic trading simulations that bring real time reporting, automated paper trails and full historical records, all at the click of a button.
Brooks continued, "We looked at several alternatives but chose Stockopedia as it enables us to research, discuss and trade all from the same website. Using the site allows the boys to better understand market timing without risking real money, while the online community has helped to generate trading ideas."
Before the markets resumed their recent plunge to new lows, the Sunningdale sixth formers traded a rally in banking stocks and managed to exit profitably. Overall, the Sunningdale funds have outperformed the FTSE benchmark by 8.1% over the last month. At the end of March, the 2009 Stockopedia Challenge officially launches and both the boys and the staff are well placed for the prizes on offer, including flights to visit Wall Street.
Edward Croft, Managing Director of Stockopedia, is pleasantly surprised by the results. "Sunningdale's performance to date has been impressive and one of their boys, Archie Bannister, 13, has been this week's top performer. While the FTSE 100 has dropped 15% recently, his fund has made positive gains - making up 10% in the last week alone... it's a very promising start." Croft is pleased that young people are using the site to learn to become more financially autonomous. "Recent scandals, like the Madoff affair, have shown that blindly trusting market professionals can be extremely dangerous - so it's reassuring to see schools encourage independent thinking and analysis in this area at such an early age".
The Headmaster, Tom Dawson, is "delighted that the boys are filling in some of their free time in this way. My only concern is that they are proving far better investors than I am!"
12 Mar 2009
Madoff Linked Fund Manager Sells NY Condo
A hedge fund manager and his partner recently sold their NY condo in Midtown East/Turtle Bay for $1.049 million, according to the Manhattan Blockshopper.
David S. Upson III is the director of hedge fund research, managing director and partner at CTC Consulting, Inc., an investment consulting firm in New York City.
Although there were some links in a court filing to the Madoff hedge fund, CTC says that none of its present and past employees have ever been clients of the Madoff hedge fund, however, according to a statement this month, CTC did provide the performance data given to them by the Madoff funds upon request.
David S. Upson III is the director of hedge fund research, managing director and partner at CTC Consulting, Inc., an investment consulting firm in New York City.
Although there were some links in a court filing to the Madoff hedge fund, CTC says that none of its present and past employees have ever been clients of the Madoff hedge fund, however, according to a statement this month, CTC did provide the performance data given to them by the Madoff funds upon request.
Hedge Fund Manager Joins Water Reclamation Company
Long time hedge fund manager, Eric D. Pedersen has been appointed to the position of Chief Executive Officer and Chairman of the Board of Directors at fresh water reclamation company, STW Resources, Inc.
Pedersen has over 20 years of mergers and acquisitions and financing transaction experience, a significant portion of which has been in the water industry. Prior to joining STW, Pedersen co-managed The Water Fund, LP, a New York-based hedge fund that invested globally in water-related companies.
“We are delighted to bring someone with Eric’s skill set aboard,” Gene Brock, President of the Company, commented. “The depth of his experience in both the finance and water sectors is very complementary to our already strong management bench.”
Pedersen added, “The combination of STW’s oilfield and project management capability with GE’s robust technology creates a partnership that can provide truly unique solutions to our customers’ product water challenges. I am very excited to be part of this dedicated and capable team.”
STW’s first project will utilize technology developed by GE Water & Process Technologies to reclaim approximately 70% of the fresh water from otherwise unusable oil and natural gas hydraulic fracture flow-back water and salt water that is produced in conjunction with the production of oil and natural gas.
Pedersen has over 20 years of mergers and acquisitions and financing transaction experience, a significant portion of which has been in the water industry. Prior to joining STW, Pedersen co-managed The Water Fund, LP, a New York-based hedge fund that invested globally in water-related companies.
“We are delighted to bring someone with Eric’s skill set aboard,” Gene Brock, President of the Company, commented. “The depth of his experience in both the finance and water sectors is very complementary to our already strong management bench.”
Pedersen added, “The combination of STW’s oilfield and project management capability with GE’s robust technology creates a partnership that can provide truly unique solutions to our customers’ product water challenges. I am very excited to be part of this dedicated and capable team.”
STW’s first project will utilize technology developed by GE Water & Process Technologies to reclaim approximately 70% of the fresh water from otherwise unusable oil and natural gas hydraulic fracture flow-back water and salt water that is produced in conjunction with the production of oil and natural gas.
11 Mar 2009
February Sees Lower Hedge Fund Redemptions
There were fewer redemptions in February 2009,($11 billion) compared to January,($30 billion), according to preliminary reports from Eurekahedge, pointing towards the easing of redemption pressures for hedge funds in the future.
The Hedge Fund Index was down 0.5% in February suggesting another month of loss mitigation and strong relative outperformance – The S&P500 was down 11%.
Interestingly, Eurekahedge says, fund of funds managers (-0.2%), on average, have now outperformed hedge fund managers for the first two months of 2009 after 12 months of consecutive underperformance for 2008.
Latin American funds were the only ones to finish the month with decent gains (0.7%), as managers in the region were afforded opportunities with the weakening of most regional currencies against the US dollar, among other things during the month.
The Hedge Fund Index was down 0.5% in February suggesting another month of loss mitigation and strong relative outperformance – The S&P500 was down 11%.
Interestingly, Eurekahedge says, fund of funds managers (-0.2%), on average, have now outperformed hedge fund managers for the first two months of 2009 after 12 months of consecutive underperformance for 2008.
Latin American funds were the only ones to finish the month with decent gains (0.7%), as managers in the region were afforded opportunities with the weakening of most regional currencies against the US dollar, among other things during the month.
Connecticut To Raise Accredited Hedge Fund Investor Standard
The Banks Committee of the Connecticut General Assembly voted yesterday to pass a bill that will raise the minimum financial qualifications for hedge fund investors to $2.5 million and for institutional investors, $5 million.
If the bill, called "An Act Concerning Hedge Funds" is passed by the Connecticut General Assembly, it may become effective as early as October 1, 2009.
This marks a substantial increase above the minimum investor assets ($1 million) required under existing federal standards, making it harder for hedge fund managers in Connecticut to raise capital.
The Connecticut Bill was one of three bills introduced in mid-February to the legislature for consideration by the Banks Committee of the Connecticut General Assembly. Two other bills cover financial disclosure and licensing requirements, they up for vote in the near future.
If the bill, called "An Act Concerning Hedge Funds" is passed by the Connecticut General Assembly, it may become effective as early as October 1, 2009.
This marks a substantial increase above the minimum investor assets ($1 million) required under existing federal standards, making it harder for hedge fund managers in Connecticut to raise capital.
The Connecticut Bill was one of three bills introduced in mid-February to the legislature for consideration by the Banks Committee of the Connecticut General Assembly. Two other bills cover financial disclosure and licensing requirements, they up for vote in the near future.
10 Mar 2009
Survey Reports $1.64 Trillion In Hedge Fund Assets
The top 10 hedge fund adminstraators reported $1.64 trillion in hedge fund assets under administration (AuA) in the Q4 2008, according to HFN, with Citco Fund Services, State Street Alternative Investment Solutions and Goldman Sachs Administration Services taking the top three positions.
HFN also released early estimates for February hedge fund asset flows which indicate the outflow from the industry continued during the month, but at a much slower rate than prior months. Early estimates show hedge fund assets fell an additional 2.2% in February 2009 to $1.746 trillion compared to a reduction of 7.6% in January 09.
The drop was largely due to net investor redemptions and fund liquidations of $35.9 billion during the month and combined with a reduction due to performance losses of $3.53 billion. Early estimates have the HFN Hedge Fund Aggregate Average -0.61% for February, but this figure will likely go lower as more funds report.
Taking into account internal estimates of where month end performance will likely settle, February 2009 should go down as the 5th highest level of hedge fund outperformance over equity markets in the last twenty years.
The Q4 2008 HFN Administrator Survey contains information on hedge fund and fund of funds assets under administration (AuA) from 60 administrators. Results detail total reported AuA, regional concentration, growth rates and top ten lists for more than 20 criteria.
HFN also released early estimates for February hedge fund asset flows which indicate the outflow from the industry continued during the month, but at a much slower rate than prior months. Early estimates show hedge fund assets fell an additional 2.2% in February 2009 to $1.746 trillion compared to a reduction of 7.6% in January 09.
The drop was largely due to net investor redemptions and fund liquidations of $35.9 billion during the month and combined with a reduction due to performance losses of $3.53 billion. Early estimates have the HFN Hedge Fund Aggregate Average -0.61% for February, but this figure will likely go lower as more funds report.
Taking into account internal estimates of where month end performance will likely settle, February 2009 should go down as the 5th highest level of hedge fund outperformance over equity markets in the last twenty years.
The Q4 2008 HFN Administrator Survey contains information on hedge fund and fund of funds assets under administration (AuA) from 60 administrators. Results detail total reported AuA, regional concentration, growth rates and top ten lists for more than 20 criteria.
9 Mar 2009
SEC To Contact Hedge Fund Investors
At the MFA Legal, Compliance and Operations Seminar in New York last week, SEC staff described its examination and enforcement priorities for the foreseeable future with respect to hedge funds and investment advisers.
According to a letter obtained by HedgeCo, the SEC staff said that as part of their examination of hedge funds and investment advisers, the SEC intends to contact investors, verifying that the hedge fund/investment manager is providing the same statement information to both the client and SEC staff.
The concern here is that the manager might be providing one set of statements to the SEC for exam purposes and another set of statements to the clients that contain materially different account balances or performance information.
This aspect of the exam program may have significant investor relationship implications for fund managers. When questioned, the SEC staff members indicated that they may issue a press release stating that this aspect will be part of examinations going forward.
The SEC staff indicated that fund managers may run the risk of obstructing the examination by getting ahead of the process and communicating directly with investors ahead of SEC staff.
The SEC also warned investors about con-artists who may use the names of SEC employees to mislead, trick and conduct "emergency" examinations.
According to a letter obtained by HedgeCo, the SEC staff said that as part of their examination of hedge funds and investment advisers, the SEC intends to contact investors, verifying that the hedge fund/investment manager is providing the same statement information to both the client and SEC staff.
The concern here is that the manager might be providing one set of statements to the SEC for exam purposes and another set of statements to the clients that contain materially different account balances or performance information.
This aspect of the exam program may have significant investor relationship implications for fund managers. When questioned, the SEC staff members indicated that they may issue a press release stating that this aspect will be part of examinations going forward.
The SEC staff indicated that fund managers may run the risk of obstructing the examination by getting ahead of the process and communicating directly with investors ahead of SEC staff.
The SEC also warned investors about con-artists who may use the names of SEC employees to mislead, trick and conduct "emergency" examinations.
Hedge Fund Manager To Take Investors On Central Asia Investment Tour
Ansher Fund Management is planning an on-site tour of emerging investment opportunities in Uzbekistan and Kazakhstan, two representative markets across the Central Asian region.
Beginning in Tashkent, the capital of Uzbekistan and then to Almaty, the financial center of Kazakhstan, Ansher's investment team will deliver detailed presentations on the region's investment opportunities. The tour begins in Zurich on March 31st.
"During the visit, you will have a unique opportunity to gain a direct insight into political and business environment, as well as into potential lucrative investment opportunities of the Region." Ravshan Yunusov, Managing Director said, "You will have a chance to meet with the representatives to understand the legal and regulatory framework for the protection of foreign investments in these countries."
Ansher says they will assist with booking/flight/tickets/visas, see; www.ansherholding.com for more details.
"We strongly believe that as a result of this trip, you will be pleasantly surprised with the investment potential of the Region, and explore the new frontier markets that offer opportunities for both diversification and growth of your portfolio." Yunusov said, "Central Asia and the Caucasus is still expected to remain as the fastest growing Region of the world according to IMF. Accordingly, our funds have performed strongly in 2008 (+14.2%), and we still anticipate significant growth opportunities in the Region for 2009."
Beginning in Tashkent, the capital of Uzbekistan and then to Almaty, the financial center of Kazakhstan, Ansher's investment team will deliver detailed presentations on the region's investment opportunities. The tour begins in Zurich on March 31st.
"During the visit, you will have a unique opportunity to gain a direct insight into political and business environment, as well as into potential lucrative investment opportunities of the Region." Ravshan Yunusov, Managing Director said, "You will have a chance to meet with the representatives to understand the legal and regulatory framework for the protection of foreign investments in these countries."
Ansher says they will assist with booking/flight/tickets/visas, see; www.ansherholding.com for more details.
"We strongly believe that as a result of this trip, you will be pleasantly surprised with the investment potential of the Region, and explore the new frontier markets that offer opportunities for both diversification and growth of your portfolio." Yunusov said, "Central Asia and the Caucasus is still expected to remain as the fastest growing Region of the world according to IMF. Accordingly, our funds have performed strongly in 2008 (+14.2%), and we still anticipate significant growth opportunities in the Region for 2009."
2 Mar 2009
Hedge Fund Calculator Team Expansion
HedgeCo Networks announced the creation of a new Hedge Fund Calculator Professional Services team. The team consists of experienced graphic designers, hedge fund marketers and consultants, CAIAs and CFAs.
The HedgeCo Hedge Fund Calculator has been in use by HedgeCo.Net for over 7 years, creating tens of thousands of hedge fund performance reports. In the first ninety days after its inception, the HedgeCo Hedge Fund Calculator gained widespread recognition and attracted hundreds of hedge funds who generated thousands of analytical reports.
"The addition of our Professional Services team will make our offering incredibly compelling, especially for managers aiming to save time, cut costs and produce high quality performance reports for their investors and prospective investors," stated Aaron Wormus, Managing Director of HedgeCo Networks. "The combination of ground-breaking technology and relevant expertise enables us to create reports with a lead time of as little as 24 hours. Managers no longer need to spend countless hours and thousands of dollars on complicated software. We consult with each client individually to produce personalized reports at a fraction of the price of other solutions in the marketplace."
HedgeCo Networks LLC manages HedgeCo.Net along with a portfolio of nine other websites devoted to alternative investments. With over 25,000 active members, HedgeCo.Net offers a vast array of hedge fund services, including website design, consultation, and third-party marketing and seeding. The Company has consulted or helped to launch over 500 new hedge funds, both onshore and offshore. HedgeCo Networks was founded in 2001 by Evan Rapoport and Andrew Schneider.
The HedgeCo Hedge Fund Calculator has been in use by HedgeCo.Net for over 7 years, creating tens of thousands of hedge fund performance reports. In the first ninety days after its inception, the HedgeCo Hedge Fund Calculator gained widespread recognition and attracted hundreds of hedge funds who generated thousands of analytical reports.
"The addition of our Professional Services team will make our offering incredibly compelling, especially for managers aiming to save time, cut costs and produce high quality performance reports for their investors and prospective investors," stated Aaron Wormus, Managing Director of HedgeCo Networks. "The combination of ground-breaking technology and relevant expertise enables us to create reports with a lead time of as little as 24 hours. Managers no longer need to spend countless hours and thousands of dollars on complicated software. We consult with each client individually to produce personalized reports at a fraction of the price of other solutions in the marketplace."
HedgeCo Networks LLC manages HedgeCo.Net along with a portfolio of nine other websites devoted to alternative investments. With over 25,000 active members, HedgeCo.Net offers a vast array of hedge fund services, including website design, consultation, and third-party marketing and seeding. The Company has consulted or helped to launch over 500 new hedge funds, both onshore and offshore. HedgeCo Networks was founded in 2001 by Evan Rapoport and Andrew Schneider.
25 Feb 2009
Diamond Fund Set to Launch
KPR Capital Limited announces the launch of the KPR Diamond Fund. The fund offers investors a unique access to physical diamonds capitalising on the price appreciation of top quality colourless diamonds.
The Fund aims to provide returns which are not correlated with traditional asset classes, act as a hedge against inflation and benefit from the supply/demand imbalance over the long term. The fund is part of KPR Fund SPC, a Cayman Islands open-ended investment company.
The investment manager has engaged a team of diamond industry experts that have in-depth knowledge and industry insight of the diamond market. The fund’s investment adviser is Goldwinds Asset Management Limited, a London based asset management firm.
Giovanni Pennetta, CEO of Goldwinds Asset Management, said, “The long term outlook for diamonds is robust. We are confident that this fund will provide the means for investors to diversify their portfolio and gain exposure to physical diamonds in a cost-efficient way. We see this as a huge investment opportunity that investors should not miss.”
The fund is open to investors in February and will launch on the 2nd March 2009. The fund has a minimum investment of US$ 250,000. Investors in the fund may benefit from the option to purchase stones on selected diamond sales by the fund at a wholesale price. The Diamond Segregated Portfolio may be offered, sold or transferred directly or indirectly to Non US Taxpayers and US Tax-exempt investors. US Taxpayers may invest in interest of the Partnership, KPR Diamond Fund L.P.
The Fund aims to provide returns which are not correlated with traditional asset classes, act as a hedge against inflation and benefit from the supply/demand imbalance over the long term. The fund is part of KPR Fund SPC, a Cayman Islands open-ended investment company.
The investment manager has engaged a team of diamond industry experts that have in-depth knowledge and industry insight of the diamond market. The fund’s investment adviser is Goldwinds Asset Management Limited, a London based asset management firm.
Giovanni Pennetta, CEO of Goldwinds Asset Management, said, “The long term outlook for diamonds is robust. We are confident that this fund will provide the means for investors to diversify their portfolio and gain exposure to physical diamonds in a cost-efficient way. We see this as a huge investment opportunity that investors should not miss.”
The fund is open to investors in February and will launch on the 2nd March 2009. The fund has a minimum investment of US$ 250,000. Investors in the fund may benefit from the option to purchase stones on selected diamond sales by the fund at a wholesale price. The Diamond Segregated Portfolio may be offered, sold or transferred directly or indirectly to Non US Taxpayers and US Tax-exempt investors. US Taxpayers may invest in interest of the Partnership, KPR Diamond Fund L.P.
Hedge Funds Hold Up in January
Morningstar reported a summary of hedge fund performance for January 2009 as well as asset flows for 2008. As stocks and government bonds got clobbered in January, hedge funds held up relatively well, the report said.
The Morningstar 1000 Hedge Fund Index declined only 1.2% and the currency-hedged Morningstar with MSCI Hedge Fund Composite Asset-Weighted Index rose 1.2%, against the MSCI World Index's 8.9% drop and the BarCap Global Aggregate Index's 3.3% decline.
"Some liquidity returned to the credit markets in January, helping certain hedge fund strategies, but even hedge funds trading equities persevered through January's tough markets," said Morningstar Hedge Fund Analyst Nadia Papagiannis. "Overall, hedge funds held their own in January."
The rise in the U.S. dollar created profits for some price-trend-following and global-macro non-trend funds in January, but volatility across equity, government bond, and commodity markets throughout the month led to trading losses. The Morningstar Global Non-Trend Hedge Fund Index rose 0.1% while the Morningstar Global Trend Hedge Fund Index declined 1.6%.
Investors continued to pull out of hedge funds, withdrawing $26 billion in December and $70 billion for the year. Europe- and U.S.-equity hedge funds saw the largest redemptions, losing $14.8 and $18.3 billion respectively in 2008.
The Morningstar 1000 Hedge Fund Index declined only 1.2% and the currency-hedged Morningstar with MSCI Hedge Fund Composite Asset-Weighted Index rose 1.2%, against the MSCI World Index's 8.9% drop and the BarCap Global Aggregate Index's 3.3% decline.
"Some liquidity returned to the credit markets in January, helping certain hedge fund strategies, but even hedge funds trading equities persevered through January's tough markets," said Morningstar Hedge Fund Analyst Nadia Papagiannis. "Overall, hedge funds held their own in January."
The rise in the U.S. dollar created profits for some price-trend-following and global-macro non-trend funds in January, but volatility across equity, government bond, and commodity markets throughout the month led to trading losses. The Morningstar Global Non-Trend Hedge Fund Index rose 0.1% while the Morningstar Global Trend Hedge Fund Index declined 1.6%.
Investors continued to pull out of hedge funds, withdrawing $26 billion in December and $70 billion for the year. Europe- and U.S.-equity hedge funds saw the largest redemptions, losing $14.8 and $18.3 billion respectively in 2008.
Rasmala Launches 2 Saudi Funds
The Saudi Capital Market Authority has approved Rasmala Investments request to launch two Saudi Equity funds. One of the funds 'Rasmala Saudi Equity Fund' will be managed according to the Shari'a guidelines approved by the fund's Shari'a Committee Jadwa and the other will be a conventional fund.
"The funds will invest in companies and industries that are poised to benefit from continuing opportunities in the Saudi economy. We believe the steep correction the market has witnessed since late last year has created many valuable opportunities, particularly for investors who view the prospects and strength of the Saudi economy favorably," Muhammad Shabbir, Head of Asset Management and CIO, said.
"Both funds will be suitable for investors who seek capital appreciation over the medium to long-term and will focus on adding value through a robust stock selection process relying primarily on the fundamental analysis skills of Rasmala's asset management team." Hamad Al Huthaili, Managing Director of Rasmala said, "Rasmala pioneered the fund-of-funds model in the MENA markets and the Company strives to provide high quality investment products to major segments of Saudi investors."
"The funds will invest in companies and industries that are poised to benefit from continuing opportunities in the Saudi economy. We believe the steep correction the market has witnessed since late last year has created many valuable opportunities, particularly for investors who view the prospects and strength of the Saudi economy favorably," Muhammad Shabbir, Head of Asset Management and CIO, said.
"Both funds will be suitable for investors who seek capital appreciation over the medium to long-term and will focus on adding value through a robust stock selection process relying primarily on the fundamental analysis skills of Rasmala's asset management team." Hamad Al Huthaili, Managing Director of Rasmala said, "Rasmala pioneered the fund-of-funds model in the MENA markets and the Company strives to provide high quality investment products to major segments of Saudi investors."
23 Feb 2009
AlphaMetrix Launches Index Tracker Fund
The AlphaMetrix STTI tracker fund, launched in mid-December 2008 by AlphaMetrix LLC, is designed to track the performance of Newedge’s AlternativeEdgeSM Short-Term Traders Index (STTI).
The fund currently has approximately $70 million under management, with additional commitments from large institutional investors expected in the coming months, according to the company. In January 2009, its first full month, the fund was up 1.94%.
"Short-term strategies have little to no correlation to any traditional or alternative investments, making them appealing to investors seeking to add pure ‘liquid alpha’ to their portfolios," said Aleks Kins, CEO of AlphaMetrix. "Further, the Short-Term Traders Index includes a wide range of diversified trading strategies, with each CTA heavily vetted, highly liquid and completely transparent."
Interest in short-term trading strategies is rising for many reasons, including unease over the lack of liquidity in other alternative investments such as hedge funds, the counter party guarantee offered by the exchange-traded derivatives market, historically strong risk-adjusted returns, limited downside risk and low volatility.
"The index is a highly practical application of our research into the best ways to construct portfolios,” said Galen Burghardt, head of research for Newedge. “We expected short-term futures traders to demonstrate valuable diversifying properties, and we have been very satisfied with the results. We expect the index to produce results that continue to be uncorrelated to every major asset class and expect the average correlation of returns in the index to remain low. As a result, we expect the index to track returns in this space with very low volatility."
The fund currently has approximately $70 million under management, with additional commitments from large institutional investors expected in the coming months, according to the company. In January 2009, its first full month, the fund was up 1.94%.
"Short-term strategies have little to no correlation to any traditional or alternative investments, making them appealing to investors seeking to add pure ‘liquid alpha’ to their portfolios," said Aleks Kins, CEO of AlphaMetrix. "Further, the Short-Term Traders Index includes a wide range of diversified trading strategies, with each CTA heavily vetted, highly liquid and completely transparent."
Interest in short-term trading strategies is rising for many reasons, including unease over the lack of liquidity in other alternative investments such as hedge funds, the counter party guarantee offered by the exchange-traded derivatives market, historically strong risk-adjusted returns, limited downside risk and low volatility.
"The index is a highly practical application of our research into the best ways to construct portfolios,” said Galen Burghardt, head of research for Newedge. “We expected short-term futures traders to demonstrate valuable diversifying properties, and we have been very satisfied with the results. We expect the index to produce results that continue to be uncorrelated to every major asset class and expect the average correlation of returns in the index to remain low. As a result, we expect the index to track returns in this space with very low volatility."
Case Dismissed Against SAC Hedge Fund
Federal Judge Stanley R. Chesler of the Federal District Court of New Jersey, Friday threw out a Canadian pharmaceutical company shareholder lawsuit against a group of hedge funds including SAC Capital Advisors LP.
The Judge dismissed the lawsuit, saying "The conduct is so egregious, and the futility of imposing alternate sanctions is so clear, that dismissal is the only appropriate sanction."
Apparently the shareholders had violated a New York judge’s order sealing documents in a related Biovail case.
"The record before the court suggests that these proceedings and the RICO action proceedings were all part of a choreographed strategy by Biovail and its attorneys designed to constitute a counterattack against the Biovail securities action," the Judge wrote.
"We are gratified that the court has seen through this charade and has dismissed the case," a spokesman for SAC said.
The Judge dismissed the lawsuit, saying "The conduct is so egregious, and the futility of imposing alternate sanctions is so clear, that dismissal is the only appropriate sanction."
Apparently the shareholders had violated a New York judge’s order sealing documents in a related Biovail case.
"The record before the court suggests that these proceedings and the RICO action proceedings were all part of a choreographed strategy by Biovail and its attorneys designed to constitute a counterattack against the Biovail securities action," the Judge wrote.
"We are gratified that the court has seen through this charade and has dismissed the case," a spokesman for SAC said.
20 Feb 2009
Taurus Launches Shriah Compliant Mutual Fund
India hedge fund manager, Taurus Mutual Fund, launched India’s first actively managed Equity Oriented Shariah compliant fund, the ‘Taurus Ethical Fund’.
With a minimum investment of INR 5000 ($100K), the open-ended actively managed mutual fund opens on February 19, 2009 and closes on March 20, 2009.
Launching in Mumbai, the fund has been certified by an independent Shariah Board named TASIS (Taqwaa Advisory and Shariah Investment Solutions).
“It’s all about investing in the right businesses and Shariah compliance ensures that," Waqar Naqvi, CEO, Taurus Mutual Fund said, "The need to pick businesses that foster wealth creation over the long term and distribute it equitably forms the basis of Shariah investing. It also provides an effective filter to identify and avoid speculative businesses. No wonder, Shariah compliant businesses have weathered the sub prime crisis”.
With a minimum investment of INR 5000 ($100K), the open-ended actively managed mutual fund opens on February 19, 2009 and closes on March 20, 2009.
Launching in Mumbai, the fund has been certified by an independent Shariah Board named TASIS (Taqwaa Advisory and Shariah Investment Solutions).
“It’s all about investing in the right businesses and Shariah compliance ensures that," Waqar Naqvi, CEO, Taurus Mutual Fund said, "The need to pick businesses that foster wealth creation over the long term and distribute it equitably forms the basis of Shariah investing. It also provides an effective filter to identify and avoid speculative businesses. No wonder, Shariah compliant businesses have weathered the sub prime crisis”.
Hedge Fund Provider Teams up With FN in India Investing Summit
Financial News is hosting the the Investors India Summit 2009 on the 19th and 20th May in London with Indian hedge fund provider Axience as its media partner.
The summit is aimed at delivering insight into the domestic as well as global development of India while identifying the potential hurdles and risks of doing business in the country. In this process, it intends to examine the possible impact of a global economic downturn on India as well as provide a unique meeting point and networking platform for all those doing or wishing to do business with or in India.
The conference will cover keynote discussions on varied subjects like ‘The global challenges of the 21st century', ‘Global Indian Investments', ‘Development of Financial Markets in India', ‘India - Fertile ground for Private Equity', etc. It will also discuss case studies on diverse topics like Capital markets, Infrastructure, Technology, Media, Telecommunication, Real Estate, etc.
Approximately 500 delegates including senior executives representing reputed firms from across the globe are expected to attend this summit.
Financial News has appointed Axience, an India-based business services firm, as its Media Partner for the conference. Axience provides bespoke research and analytics solutions to financial service institutions, consulting firms and general industries. Its key clients include global investment banks, asset management, hedge fund and private equity firms, leading consultancies and governmental agencies.
'We are glad to partner with Financial News for this key industry event which promises to bring industry, regulators, agencies and financial services firms together. Though doing business in and with India has been a topic of interest since quite sometime now, yet we still lack platforms which bring various parts of industry together. Financial News Summit 2009 fills in that gap,' said Hemant Jain, CEO of Axience.
The summit is aimed at delivering insight into the domestic as well as global development of India while identifying the potential hurdles and risks of doing business in the country. In this process, it intends to examine the possible impact of a global economic downturn on India as well as provide a unique meeting point and networking platform for all those doing or wishing to do business with or in India.
The conference will cover keynote discussions on varied subjects like ‘The global challenges of the 21st century', ‘Global Indian Investments', ‘Development of Financial Markets in India', ‘India - Fertile ground for Private Equity', etc. It will also discuss case studies on diverse topics like Capital markets, Infrastructure, Technology, Media, Telecommunication, Real Estate, etc.
Approximately 500 delegates including senior executives representing reputed firms from across the globe are expected to attend this summit.
Financial News has appointed Axience, an India-based business services firm, as its Media Partner for the conference. Axience provides bespoke research and analytics solutions to financial service institutions, consulting firms and general industries. Its key clients include global investment banks, asset management, hedge fund and private equity firms, leading consultancies and governmental agencies.
'We are glad to partner with Financial News for this key industry event which promises to bring industry, regulators, agencies and financial services firms together. Though doing business in and with India has been a topic of interest since quite sometime now, yet we still lack platforms which bring various parts of industry together. Financial News Summit 2009 fills in that gap,' said Hemant Jain, CEO of Axience.
19 Feb 2009
Hedge Fund Trembulant Ups Stake in Fast Food
Hedge fund Tremblant Capital reported that it now owns 1.1 million shares of Chipotle Mexican Grill, bringing its total shares in the Denver-based fast food restaurant to 5.7%.
"Chipotle shares have fallen recently, and the hedge fund obviously saw opportunity there," news resource SeekingAlpha says, "keep in mind that this hedge fund typically doesn't take larger than 5% stakes in companies (which requires a 13G filing), so it definitely likes this name, as this is the first major filing from them in quite some time."
With $4.1 billion in assets under management, hedge fund Tremblant is based in New York and run by Bret Barakett, who is a former portfolio manager at Moore Capital Management.
"Chipotle shares have fallen recently, and the hedge fund obviously saw opportunity there," news resource SeekingAlpha says, "keep in mind that this hedge fund typically doesn't take larger than 5% stakes in companies (which requires a 13G filing), so it definitely likes this name, as this is the first major filing from them in quite some time."
With $4.1 billion in assets under management, hedge fund Tremblant is based in New York and run by Bret Barakett, who is a former portfolio manager at Moore Capital Management.
Asian Macro Hedge Fund Launch
A new Asia macro hedge fund has been launched by Dexion Capital and Morgan Stanley veterans Andrew Gale and Lee Ka Sha.
With a minimum investment is $100,000, the fund will invest in Asian interest rates and currencies, opening trading on May 1, according to HedgeWeek.
Lee will play the role of CEO, with Gale as chief executive. Gale most recently was responsible for product development and fundraising for Dexion Capital's London-listed closed-ended funds of hedge funds and third-party funds. Lee was a founding member of Abax Global Capital in Hong Kong, where he managed both the South Asia special situations portfolio and macro positioning.
“In the course of these discussions it has become apparent that most investors look to their macro investments to be a diversifier providing a different source of returns than the inherent beta in credit and equity strategies,” Gale said, "the fund launch was based on investor demand."
With a minimum investment is $100,000, the fund will invest in Asian interest rates and currencies, opening trading on May 1, according to HedgeWeek.
Lee will play the role of CEO, with Gale as chief executive. Gale most recently was responsible for product development and fundraising for Dexion Capital's London-listed closed-ended funds of hedge funds and third-party funds. Lee was a founding member of Abax Global Capital in Hong Kong, where he managed both the South Asia special situations portfolio and macro positioning.
“In the course of these discussions it has become apparent that most investors look to their macro investments to be a diversifier providing a different source of returns than the inherent beta in credit and equity strategies,” Gale said, "the fund launch was based on investor demand."
Prime brokers doing away with OTC 'give ups'
Hedge funds of varying sizes report being given notice by prime brokers that OTC derivative give up arrangements will end - quickly. Funds ranging in size from $25M to $2.5B are being told new derivative trades "done away" will no longer be accepted near the end of the first quarter and that give up relationships will end completely in April.
‘Give up arrangements’ are where the executing broker writes trade tickets on behalf of both counterparties to the trade – provided hedge funds with three advantages: easier post-trade operations, cross margining and credit intermediation.
“Challenged by investors to provide increasing levels of transparency, independent validation and reporting frequency, funds would also have to find the operational bandwidth and capability to efficiently manage the complexities of OTC trade processing involving multiple instruments, high volumes and multiple counterparties." Hans Hufschmid, CEO of GlobeOp Financial Services commented, "And the February 28 deadline after which major dealers will not accept novation consents by email looms.”
GlobeOp also noted that during the Lehman Brothers crisis in September 2008, hedge funds began diversifying counterparty risk by abandoning the practice of single prime broker give ups and converting to multiple direct counterparty relationships.
Now, Hufschmid observes, “Intense revenue pressure on banks and on credit risk overall is forcing banks with prime broking activities to take a very tough approach to profitability. Give ups were, for many, never a core business, used to support the profitable business of lending securities to hedge funds. As risk tolerances and the lending business have become less attractive, the reasons for providing low or non- profitable support services like give ups are falling away."
“If the initial signals become a trend as financial markets and the hedge fund sector restructure, out sourcing will increase in appeal as hedge funds simultaneously face increased investor demand for independent administration and robust infrastructure declining fund performance and management fees to fund or ramp up the required technology and people resources continued attractive opportunities for strategies involving OTC derivatives.”
‘Give up arrangements’ are where the executing broker writes trade tickets on behalf of both counterparties to the trade – provided hedge funds with three advantages: easier post-trade operations, cross margining and credit intermediation.
“Challenged by investors to provide increasing levels of transparency, independent validation and reporting frequency, funds would also have to find the operational bandwidth and capability to efficiently manage the complexities of OTC trade processing involving multiple instruments, high volumes and multiple counterparties." Hans Hufschmid, CEO of GlobeOp Financial Services commented, "And the February 28 deadline after which major dealers will not accept novation consents by email looms.”
GlobeOp also noted that during the Lehman Brothers crisis in September 2008, hedge funds began diversifying counterparty risk by abandoning the practice of single prime broker give ups and converting to multiple direct counterparty relationships.
Now, Hufschmid observes, “Intense revenue pressure on banks and on credit risk overall is forcing banks with prime broking activities to take a very tough approach to profitability. Give ups were, for many, never a core business, used to support the profitable business of lending securities to hedge funds. As risk tolerances and the lending business have become less attractive, the reasons for providing low or non- profitable support services like give ups are falling away."
“If the initial signals become a trend as financial markets and the hedge fund sector restructure, out sourcing will increase in appeal as hedge funds simultaneously face increased investor demand for independent administration and robust infrastructure declining fund performance and management fees to fund or ramp up the required technology and people resources continued attractive opportunities for strategies involving OTC derivatives.”
18 Feb 2009
Emerging Hedge Fund Managers Get Fee Cuts Through Philanthropy
Hedge fund admin provider, Variman LLC, and Hedge Funds Care are working together offering discounted monthly service fees to emerging hedge fund managers who donate the standard set-up fee to Hedge Funds Care on behalf of Variman LLC.
"Given the difficult times our industry is currently facing, Variman Fund Services is making an effort to support both the needs of the marketplace and those of abused children, we believe this initiative will be worthwhile and bring solid value to all involved." Variman said.
Hedge Funds Care was established in 1998, Hedge Funds Care has distributed over $18 million through more than 500 grants. In 2009, annual benefits will take place in New York, San Francisco, Chicago, Atlanta, Boston, Denver, Toronto, London and the Cayman Islands. Variman LLC is headquartered in Short Hills, NJ, USA with offices in Dubai and India.
"Given the difficult times our industry is currently facing, Variman Fund Services is making an effort to support both the needs of the marketplace and those of abused children, we believe this initiative will be worthwhile and bring solid value to all involved." Variman said.
Hedge Funds Care was established in 1998, Hedge Funds Care has distributed over $18 million through more than 500 grants. In 2009, annual benefits will take place in New York, San Francisco, Chicago, Atlanta, Boston, Denver, Toronto, London and the Cayman Islands. Variman LLC is headquartered in Short Hills, NJ, USA with offices in Dubai and India.
17 Feb 2009
Diamond Hedgers Report Increase in Fund Assets
Recently launched Codiam Fund, which invests in pre-cut colored diamonds, has reported an increase of 9% in the fund's net asset value over the first three months of trading.
"We launched the fund in difficult market conditions, confident that our experience and expertise would enable us to identify and purchase rare coloured diamonds that would grow in value for our investors, and the increase to our net asset value has proved this to be true," says Codiam managing director Philip Baldwin, who co-founded the business with Mahyar Makhzani.
The fund managers believe the colored diamonds offer a hedge against market and political crises, as they have not decreased in price on a wholesale level in 35 years, consistently outperforming other diamond categories, with their value increasing on average between ten and 15% a year.
"We launched the fund in difficult market conditions, confident that our experience and expertise would enable us to identify and purchase rare coloured diamonds that would grow in value for our investors, and the increase to our net asset value has proved this to be true," says Codiam managing director Philip Baldwin, who co-founded the business with Mahyar Makhzani.
The fund managers believe the colored diamonds offer a hedge against market and political crises, as they have not decreased in price on a wholesale level in 35 years, consistently outperforming other diamond categories, with their value increasing on average between ten and 15% a year.
Investcorp Sponsors Alternative Investments CRISP Program
Alternative investment manager, Investcorp, sponsored a group of Bahraini students from the Crown Prince's International Scholarship Program (CPISP), to spend a day at Investcorp’s London office, meeting and questioning senior managers and learning about hedge funds and other alternative investments.
As a global operator with strong roots in the Gulf region, Investcorp was of great interest to the group. Presentations on Investcorp’s various business areas were made by Carsten Hagenbucher, who presented on private equity; Jonathan Feeney, who spoke on hedge funds, and Alex Lien, who discussed technology investment.
"The Crown Prince's International Scholarship Program should be congratulated on providing such an exceptional opportunity for young Bahraini students to take places in top international Universities and Colleges." Investcorp President and Chief Operating Officer, Gary Long, said, "Investcorp is very proud to continue its support of the program."
As a global operator with strong roots in the Gulf region, Investcorp was of great interest to the group. Presentations on Investcorp’s various business areas were made by Carsten Hagenbucher, who presented on private equity; Jonathan Feeney, who spoke on hedge funds, and Alex Lien, who discussed technology investment.
"The Crown Prince's International Scholarship Program should be congratulated on providing such an exceptional opportunity for young Bahraini students to take places in top international Universities and Colleges." Investcorp President and Chief Operating Officer, Gary Long, said, "Investcorp is very proud to continue its support of the program."
16 Feb 2009
Credit Crunch Hedge Fund Killers - Movie Debut
West Palm Beach (HedgeCo.net) - Playing a hedge fund banker turned killer, Dougray Scott stars in the 'credit crunch' movie: New Town Killers. It being shown for the first time in Scotland tonight as part of the Glasgow Film Festival's fifth anniversary.
Filmed in Edinburgh's streets, according to UK's DailyRecord, the movie is high octane, violent and bloody. New Town Killers was made for only £1 million and with perfect timing, as it has already been dubbed the first credit-crunch movie of 2009.
It shows Dougray as a cold-hearted hedge fund banker who turns killer for kicks, playing a 12-hour game of hunt, hide and seek with underprivileged people, according to the paper.
"In creating a scenario where the well-heeled and privileged prey on the poor and deprived, director Richard Jobson is clearly wearing political concerns on his sleeve in his latest film, and is to be admired for it." Says Michael Hayden, of the British Film Institute, "Yet New Town Killers is not bleeding-heart social commentary, but an ambitious and kinetic thriller, a tension-packed joyride through Edinburgh streets; it is obvious Jobson knows the city well, and that he loves it, he presents it wonderfully."
Also in the film is James Anthony Pearson, Joy Division guitarist and actress Liz White, in debt and playing the banker's game for cash. It also stars Joely Richardson, Vanessa Redgrave, Eddie Izzard, Jason Priestley and Brian Cox as Dougray's dad, Dennis.
Dougray said, "The fact that Jobson wrote this before all the banking collapses is incredible. The film gets a cinema release in June.
- Alexis Akesson
Filmed in Edinburgh's streets, according to UK's DailyRecord, the movie is high octane, violent and bloody. New Town Killers was made for only £1 million and with perfect timing, as it has already been dubbed the first credit-crunch movie of 2009.
It shows Dougray as a cold-hearted hedge fund banker who turns killer for kicks, playing a 12-hour game of hunt, hide and seek with underprivileged people, according to the paper.
"In creating a scenario where the well-heeled and privileged prey on the poor and deprived, director Richard Jobson is clearly wearing political concerns on his sleeve in his latest film, and is to be admired for it." Says Michael Hayden, of the British Film Institute, "Yet New Town Killers is not bleeding-heart social commentary, but an ambitious and kinetic thriller, a tension-packed joyride through Edinburgh streets; it is obvious Jobson knows the city well, and that he loves it, he presents it wonderfully."
Also in the film is James Anthony Pearson, Joy Division guitarist and actress Liz White, in debt and playing the banker's game for cash. It also stars Joely Richardson, Vanessa Redgrave, Eddie Izzard, Jason Priestley and Brian Cox as Dougray's dad, Dennis.
Dougray said, "The fact that Jobson wrote this before all the banking collapses is incredible. The film gets a cinema release in June.
- Alexis Akesson
Mexican Hedge Fund Takes Over Canadian Mining Company
Canadian mining, development and exploration company, Frontera Copper Corporation, has agreed, due to the recent downturn in the copper market, to Mexican hedge fund Invecture's hostile take over bid.
After determining that the hedge fund, Invecture Group, S.A. de C.V's, offer was superior to the offer previously received from Southern Copper Corporation, the Company's financial advisor, RBC Capital Markets, said that from a financial point of view, the hedge fund's offer is fair to Frontera shareholders.
Frontera's principal activity is the production of copper cathode from the Piedras Verdes run-of-mine heap-leach copper operation in Sonora, Mexico. Based on the January 1, 2008 ore reserves and the estimated recoverable copper contained on the leach pads at December 31, 2007, approximately 1 billion pounds of copper is projected to be produced over the remaining 17-year life of the operation.
After determining that the hedge fund, Invecture Group, S.A. de C.V's, offer was superior to the offer previously received from Southern Copper Corporation, the Company's financial advisor, RBC Capital Markets, said that from a financial point of view, the hedge fund's offer is fair to Frontera shareholders.
Frontera's principal activity is the production of copper cathode from the Piedras Verdes run-of-mine heap-leach copper operation in Sonora, Mexico. Based on the January 1, 2008 ore reserves and the estimated recoverable copper contained on the leach pads at December 31, 2007, approximately 1 billion pounds of copper is projected to be produced over the remaining 17-year life of the operation.
13 Feb 2009
Betsy Waters on Basics of Investment Strategy at NY Traders Expo
dbFX Global Director Betsy Waters will moderate a panel discussion entitled, “Investing in Managed Accounts: The What, How, and Why,” during the International Traders Expo, the largest and only expo designed exclusively for active traders. The workshop will be held on Sunday, February 22, 2009 at 1:15 p.m. at New York’s Marriott Marquis.
“The panel discussion will be an excellent opportunity for investors to understand what they should consider before engaging an account manager to execute their FX investments,” said Waters. “Workshop participants will leave the session with a keen understanding of how managed accounts work and how they can benefit from working with a professional manager, as well as how to identify and interview a prospective manager, and what fees and costs are associated with managed accounts.”
Waters will be joined on the panel by Robert Sharpe, Founder and CEO of SolomonFX; Patrick Lafferty, President, Capital Trading Group; David Johnson, Founder, Global Capital Investments, and; Marc Zupicich, financial advisor for Morgan Stanley.
“The panel discussion will be an excellent opportunity for investors to understand what they should consider before engaging an account manager to execute their FX investments,” said Waters. “Workshop participants will leave the session with a keen understanding of how managed accounts work and how they can benefit from working with a professional manager, as well as how to identify and interview a prospective manager, and what fees and costs are associated with managed accounts.”
Waters will be joined on the panel by Robert Sharpe, Founder and CEO of SolomonFX; Patrick Lafferty, President, Capital Trading Group; David Johnson, Founder, Global Capital Investments, and; Marc Zupicich, financial advisor for Morgan Stanley.
Hedge Funds Need Help in Recovering Losses: Fiduciary Experts Say
Independent forensic professionals, Chris McConnell and Eric Steinwald are two are finding themselves in increasing demand as hedge funds and other investors turn to experts for help in recovering from losses caused by fraud, Ponzi schemes, stock market or real estate market losses.
"Any asset, at any time, may bercome subject to fiduciary duty standards, "McConnell said, "Fiduciary duty is not simply a good idea or a best practice; rather, it's the highest standard known under the law."
McConnell, AIFA of Fiduciary Forensics, has over 25 years of experience in the field and is an acknowledged fiduciary expert in the securities, compensation and valuation fields based upon actual, inside hands-on Wall Street securities industry experience. Steinwald is a principal of Steinwald and Kaufmann, a Brentwood/Los Angeles, California tax and forensics accounting CPA firm, and also has 25 years of experience of serving financial clients. Together, the two bring over 50 years of unmatched expertise to plaintiffs who experience suspicious investment losses of any kind.
"Courts often hold trustees and/or third party investment fiduciaries (banks, brokers, trust companies, investment advisers, hedge funds, and even custodians) may be liable, measured against the expert investment standard regarding personal liability. "McConnell said, "The amount of potential fraud, loss of income, and/or insurance claims looks to increase dramatically as investors face staggering losses. We are ready to help as many people as we can to avoid potential financial catastrophe."
The difference between proving liability and recovering damages and loss is in the actual details, which often provide the edge for success.
"Any asset, at any time, may bercome subject to fiduciary duty standards, "McConnell said, "Fiduciary duty is not simply a good idea or a best practice; rather, it's the highest standard known under the law."
McConnell, AIFA of Fiduciary Forensics, has over 25 years of experience in the field and is an acknowledged fiduciary expert in the securities, compensation and valuation fields based upon actual, inside hands-on Wall Street securities industry experience. Steinwald is a principal of Steinwald and Kaufmann, a Brentwood/Los Angeles, California tax and forensics accounting CPA firm, and also has 25 years of experience of serving financial clients. Together, the two bring over 50 years of unmatched expertise to plaintiffs who experience suspicious investment losses of any kind.
"Courts often hold trustees and/or third party investment fiduciaries (banks, brokers, trust companies, investment advisers, hedge funds, and even custodians) may be liable, measured against the expert investment standard regarding personal liability. "McConnell said, "The amount of potential fraud, loss of income, and/or insurance claims looks to increase dramatically as investors face staggering losses. We are ready to help as many people as we can to avoid potential financial catastrophe."
The difference between proving liability and recovering damages and loss is in the actual details, which often provide the edge for success.
11 Feb 2009
Obama's Stimulus Package Approved by Senate
President Barack Obama's $838 billion stimulus plan was approved by the U.S. Senate as part of a plan of action the Senate hopes will revive the collapsing US economy.
$100 billion is to be alotted to hedge funds or other investors, giving them incentive to purchase so-called toxic assets. President Obama welcomed the 61-37 vote as "good news. It's a good start."
Outlining a few details of how the administration would spend the remaining $350 billion of the $700 billion bank bailout program, Treasury Secretary Timothy Geithner separately announced a new public-private partnership to help strengthen banks.
"Critical parts of our financial system are damaged," Geithner said. "The financial system is working against recovery and that's the dangerous dynamic we need to change."
In a related government commitment of financial support, the Federal Reserve broadened a program designed to boost resources for consumer credit and small business loans - from $200 billion up to $1 trillion. Additionally, Obama has campaigned to include funds for school construction in the bill.
$100 billion is to be alotted to hedge funds or other investors, giving them incentive to purchase so-called toxic assets. President Obama welcomed the 61-37 vote as "good news. It's a good start."
Outlining a few details of how the administration would spend the remaining $350 billion of the $700 billion bank bailout program, Treasury Secretary Timothy Geithner separately announced a new public-private partnership to help strengthen banks.
"Critical parts of our financial system are damaged," Geithner said. "The financial system is working against recovery and that's the dangerous dynamic we need to change."
In a related government commitment of financial support, the Federal Reserve broadened a program designed to boost resources for consumer credit and small business loans - from $200 billion up to $1 trillion. Additionally, Obama has campaigned to include funds for school construction in the bill.
10 Feb 2009
Conyers Expands Cayman Islands Team
Pioneers in the field of offshore law, Conyers Dill & Pearman, (Conyers) is expanding its Cayman Islands presence with three new associates as attorneys-at-law. Stephen Leontsinis has joined the Litigation team, while Tania Dons and Preetha Pillai have joined the Corporate Department.
“Our superior investment funds and litigation capabilities have reinforced our reputation as a preferred firm to partner with in transactions of this nature." Richard Finlay, Managing Partner of Conyers’ Cayman Islands office, "We continue to expand our team in line with our strategic plans to build on the strengths and capabilities of our Cayman Islands practice. We are proud of our reputation as global leader which attracts such depth of talent and are delighted to have Stephen, Tania and Preetha join us.”
Since its establishment in July 2003, Conyers’ Cayman Islands office has grown into a full service practice with a current complement of 20 lawyers and 60 staff. The growth of the Cayman Islands practice complements Conyers’ continued growth globally. Last year, the firm opened three new offices in Moscow, Mauritius and São Paulo, as well as making several key hires. Today, Conyers comprises of over 550 staff in 11 jurisdictions with more than 150 lawyers.
With over 150 lawyers, Conyers Dill & Pearman advises on the laws of Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Mauritius from those islands and from Dubai, Hong Kong, London, Moscow, and Singapore. The firm has earned clients’ trust, loyalty and respect by consistently providing responsive, timely and thorough advice on all aspects of offshore corporate and commercial law, commercial litigation and private client matters.
“Our superior investment funds and litigation capabilities have reinforced our reputation as a preferred firm to partner with in transactions of this nature." Richard Finlay, Managing Partner of Conyers’ Cayman Islands office, "We continue to expand our team in line with our strategic plans to build on the strengths and capabilities of our Cayman Islands practice. We are proud of our reputation as global leader which attracts such depth of talent and are delighted to have Stephen, Tania and Preetha join us.”
Since its establishment in July 2003, Conyers’ Cayman Islands office has grown into a full service practice with a current complement of 20 lawyers and 60 staff. The growth of the Cayman Islands practice complements Conyers’ continued growth globally. Last year, the firm opened three new offices in Moscow, Mauritius and São Paulo, as well as making several key hires. Today, Conyers comprises of over 550 staff in 11 jurisdictions with more than 150 lawyers.
With over 150 lawyers, Conyers Dill & Pearman advises on the laws of Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Mauritius from those islands and from Dubai, Hong Kong, London, Moscow, and Singapore. The firm has earned clients’ trust, loyalty and respect by consistently providing responsive, timely and thorough advice on all aspects of offshore corporate and commercial law, commercial litigation and private client matters.
9 Feb 2009
IAS presents a ‘Forensic’ approach to Due Diligence
In response to the recent need to restore confidence and liquidity in the mortgage market, Integrated Asset Services, LLC (IAS), a default management and residential collateral valuation company, is introducing iCDA Credit Due Diligence Analytics.
Expecting clients from hedge funds, mutual funds, private investors, government agencies, ratings agencies, and mortgage originators, IAS calls their system a “surgically precise” review of borrower credit worthiness, collateral valuation, and compliance for loan buyers.
“iCDA is designed to expose both the risk and merit of an asset beyond the historic origination and compliance guidelines," John Coughlin, VP of Capital Markets for IAS said, "Using our suite of analytic tools to forecast performance, we can identify exit strategies and recommend loan modifications and repayment plans for your assets.”
“We’ve combined IAS’s expert default professional services with innovative new technology and a few key alliances to provide a robust, single-source solution,” says Robert Vanderbilt, First Vice President for Integrated Asset Services. "We have to think the integrity of our approach and the fullness of our product will go a long way toward getting the mortgage market moving again,” said Vanderbilt.
Expecting clients from hedge funds, mutual funds, private investors, government agencies, ratings agencies, and mortgage originators, IAS calls their system a “surgically precise” review of borrower credit worthiness, collateral valuation, and compliance for loan buyers.
“iCDA is designed to expose both the risk and merit of an asset beyond the historic origination and compliance guidelines," John Coughlin, VP of Capital Markets for IAS said, "Using our suite of analytic tools to forecast performance, we can identify exit strategies and recommend loan modifications and repayment plans for your assets.”
“We’ve combined IAS’s expert default professional services with innovative new technology and a few key alliances to provide a robust, single-source solution,” says Robert Vanderbilt, First Vice President for Integrated Asset Services. "We have to think the integrity of our approach and the fullness of our product will go a long way toward getting the mortgage market moving again,” said Vanderbilt.
Hedge Fund Veteran Acts to Improve Fund Transparency
Mike Griffin of Spectrum Global Fund Administration has launched the a hedge fund website that he believes will improve hedge fund transparancy, HedgeACT.com.
“As a former hedge fund executive, I know first-hand how important transparency is during the capital allocation process,” said Michael Griffin, founder and CEO of HedgeACT and Chief Operating Officer of Fenchurch Capital Management from 1985 to 1998. “This is a difficult time for many hedge fund investors, and we think that giving them better information will make the entire analysis and allocation process much better for everyone involved.”
The “ACT” in HedgeACT.com refers to the site’s three key benefits for the hedge fund community, including Analytics, Capital Introduction and Transparency.
Providing investors with free access to hundreds of data points and analytics for over 7,500 hedge funds, HedgeAct's data is licensed from Morningstar.
Additionally, hedge funds and hedge fund administrators will have the ability to augment this data with their own timely, vetted information on fund performance, track record and other important investor criteria.
“As a former hedge fund executive, I know first-hand how important transparency is during the capital allocation process,” said Michael Griffin, founder and CEO of HedgeACT and Chief Operating Officer of Fenchurch Capital Management from 1985 to 1998. “This is a difficult time for many hedge fund investors, and we think that giving them better information will make the entire analysis and allocation process much better for everyone involved.”
The “ACT” in HedgeACT.com refers to the site’s three key benefits for the hedge fund community, including Analytics, Capital Introduction and Transparency.
Providing investors with free access to hundreds of data points and analytics for over 7,500 hedge funds, HedgeAct's data is licensed from Morningstar.
Additionally, hedge funds and hedge fund administrators will have the ability to augment this data with their own timely, vetted information on fund performance, track record and other important investor criteria.
7 Feb 2009
Pelorus Advisors Offer Risk Service Exclusively To Hedge Funds
As investors look to independent and unbiased hedge fund risk due diligence, Pelorus Advisors has decided to launch an operational risk management service for hedge fund investors. Unlike other due diligence firms, Pelorus only offers its risk due diligence service to hedge fund investors.
“It’s an enormous conflict of interest for diligence teams to be compensated by the same hedge funds they cover,” said Jeff Rathgeber, co-founder and partner of Pelorus. “The hedge fund community has seen more than enough target-sponsored ‘independent’ report cards. We'll let other risk management firms issue their seals of approval based on manager-supplied data.”
Pelorus is staffed by a team of hedge fund experts that have spent years operating inside complicated hedge fund structures. “It is only from this vantage point that an advisory firm gains the experience needed to identify the true risks that hide within hedge funds,” said Ken McGee, Managing Director of Pelorus’ Hedge Fund Practice Group. “It is exactly this kind of experience that is missing from most hedge fund due diligence firms. In our opinion, this lack of inside experience is what moves most firms away from being Hedge Fund Risk Experts and moves them into the category of Data Regression Analysts.”
“A clear distinction that separates Pelorus Advisors from other firms is that we don’t harvest massive amounts of publicly available data, crunch it, and issue armchair reports to investors,” said Rathgeber. “Nor do we merely rely on data that is supplied by the target hedge funds we audit. Instead, we conduct in-depth, on-site engagements to dig deep into a hedge fund's operations and run through its control structure to ensure that our clients’ investments are properly protected.”
“It’s an enormous conflict of interest for diligence teams to be compensated by the same hedge funds they cover,” said Jeff Rathgeber, co-founder and partner of Pelorus. “The hedge fund community has seen more than enough target-sponsored ‘independent’ report cards. We'll let other risk management firms issue their seals of approval based on manager-supplied data.”
Pelorus is staffed by a team of hedge fund experts that have spent years operating inside complicated hedge fund structures. “It is only from this vantage point that an advisory firm gains the experience needed to identify the true risks that hide within hedge funds,” said Ken McGee, Managing Director of Pelorus’ Hedge Fund Practice Group. “It is exactly this kind of experience that is missing from most hedge fund due diligence firms. In our opinion, this lack of inside experience is what moves most firms away from being Hedge Fund Risk Experts and moves them into the category of Data Regression Analysts.”
“A clear distinction that separates Pelorus Advisors from other firms is that we don’t harvest massive amounts of publicly available data, crunch it, and issue armchair reports to investors,” said Rathgeber. “Nor do we merely rely on data that is supplied by the target hedge funds we audit. Instead, we conduct in-depth, on-site engagements to dig deep into a hedge fund's operations and run through its control structure to ensure that our clients’ investments are properly protected.”
6 Feb 2009
Arkanar Financial Global Macro Hedge Fund Launch
Alternative investment consultant and director, Bob Torkelund has announced the launch of a Cayman regulated fund, the Arkanar Global Macro SP. The fund is being monitored and the due diligence work done by the Cayman regulator before the launch took place.
The initial offering period runs throughout February 2009, with a minimum investment of $10.000.
Torkelund said, “The fund is easy dealing and settlement: we have organised electronic clearing via Clearstream/Euroclear ‘payment against delivery’ which makes the fund available to most European and international banks in line with other international securities.”
The fund has a 20% high water mark performance fee and 0.5% per quarter as management fee and an expected annual return of 15–20%.
Torkelund is director of global retail sales, marketing and operations for several boutique fund managers. He was also responsible for the formulation and execution of Threadneedle Investments and has become a serious player in Continental Europe.
The initial offering period runs throughout February 2009, with a minimum investment of $10.000.
Torkelund said, “The fund is easy dealing and settlement: we have organised electronic clearing via Clearstream/Euroclear ‘payment against delivery’ which makes the fund available to most European and international banks in line with other international securities.”
The fund has a 20% high water mark performance fee and 0.5% per quarter as management fee and an expected annual return of 15–20%.
Torkelund is director of global retail sales, marketing and operations for several boutique fund managers. He was also responsible for the formulation and execution of Threadneedle Investments and has become a serious player in Continental Europe.
5 Feb 2009
Hedge Fund MC Subpoenad by Feds
Wall Street's highest-ranking woman, Erin Callan, was subpoenaed by a federal grand jury, along with 24 other Lehman executives regarding the collapse of Lehman Brothers, according to the New York Post.
Now in seclusion, the NYP says she taking a five-month personal leave. Callan joined Credit Suisse five months ago after being ousted as CFO of collapsed investment bank Lehman Brothers.
NYP excerpt: "At Lehman, Callan had been an admired public face of Lehman's whirlwind dance with hedge fund chiefs, but then-CEO Dick Fuld blamed her for Lehman's collapse, and pushed her out just months before the firm imploded, wiping out billions for investors and employees."
Now in seclusion, the NYP says she taking a five-month personal leave. Callan joined Credit Suisse five months ago after being ousted as CFO of collapsed investment bank Lehman Brothers.
NYP excerpt: "At Lehman, Callan had been an admired public face of Lehman's whirlwind dance with hedge fund chiefs, but then-CEO Dick Fuld blamed her for Lehman's collapse, and pushed her out just months before the firm imploded, wiping out billions for investors and employees."
4 Feb 2009
Madoff Hedge Fund Shut Down by Luxembourg Regulators
Swiss bank UBS AG's money manager, Luxalpha, was one of the main European hedge funds that gave money to US money manager Bernard Madoff, it is now being shut down by CSSF, Luxembourg's financial supervisors.
The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.
People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.
The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.
People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.
3 Feb 2009
Hedge Fund Manager to head up River & Mercantile Fund Launch
UK fund manager, River & Mercantile, is launching an Equity Income Fund with the aim to invest in the best ideas generated by their UK team.
Hedge fund manager Richard Staveley is taking the lead with a philosophy which involves analyzing companies based on their potential, valuation and timing. In other words, he is looking for the potential growth opportunities in companies throughout their life cycle; companies that are attractively valued; and companies with earnings upgrades as the timing of these upgrades can have a positive impact on share prices.
Staveley qualified as a Chartered Accountant with PriceWaterhouseCoopers in 1999, before joining the hedge fund boutique Bradshaw Asset Management as an Assistant Fund Manager. In 2001 he moved to SGAM and became Head of UK Small Company investments in 2002. Richard joined River and Mercantile in August 2006. He holds the CFA designation. Richard is Research Director with responsibility for the team research function. As a Fund Manager he will be focused on the UK Unconstrained and Small/Mid Cap strategies.
At launch the fund is expected to yield approximately 5.1% and it will invest in companies of all sizes. In order to monitor risk, it will however invest no more than 15% in smaller companies and no more than 30% in medium sized companies. It can invest up to 100% in larger companies if this is where the manager finds the best opportunities.
River and Mercantile is a new long only investment management boutique. The business was incorporated in 2006 as a Limited Liability Partnership with significant management interest. The cornerstone investor is Pacific Investments which is owned by Sir John Beckwith.
Hedge fund manager Richard Staveley is taking the lead with a philosophy which involves analyzing companies based on their potential, valuation and timing. In other words, he is looking for the potential growth opportunities in companies throughout their life cycle; companies that are attractively valued; and companies with earnings upgrades as the timing of these upgrades can have a positive impact on share prices.
Staveley qualified as a Chartered Accountant with PriceWaterhouseCoopers in 1999, before joining the hedge fund boutique Bradshaw Asset Management as an Assistant Fund Manager. In 2001 he moved to SGAM and became Head of UK Small Company investments in 2002. Richard joined River and Mercantile in August 2006. He holds the CFA designation. Richard is Research Director with responsibility for the team research function. As a Fund Manager he will be focused on the UK Unconstrained and Small/Mid Cap strategies.
At launch the fund is expected to yield approximately 5.1% and it will invest in companies of all sizes. In order to monitor risk, it will however invest no more than 15% in smaller companies and no more than 30% in medium sized companies. It can invest up to 100% in larger companies if this is where the manager finds the best opportunities.
River and Mercantile is a new long only investment management boutique. The business was incorporated in 2006 as a Limited Liability Partnership with significant management interest. The cornerstone investor is Pacific Investments which is owned by Sir John Beckwith.
2 Feb 2009
Tuckerbrook to Provide Daily Transparency to Hedge Fund Clients
In the wake of the Madoff scandal, Tuckerbrook Alternative Investments is offering its hedge fund investors the daily market value of assets in their capital accounts.
"In light of the impact 2008 is having on the hedge fund business, transparency is the most important enhancement the industry can embrace," John Hassett, Managing Principal of Tuckerbrook, said, "Tuckerbrook has always used third-party prime brokers, administrators and auditors in order to provide independent verification of fund activity, so it made sense to us to have daily asset transparency reports distributed directly from Citi Hedge Fund Services, to underscore the importance of both independent asset pricing and more frequent transparency. Although unique in the industry now, we would expect this level of reporting to become standard practice in the future."
Moses Grader, Chief Operating Officer of Tuckerbrook, said, "Ninety percent or more of all hedge fund investments are in commingled fund structures, with only the largest investors having daily accountability through separately managed accounts. Daily transparency at the client-account level, delivered by a trusted third party, is a major step up in accountability to those investors that don't have an SMA."
"In light of the impact 2008 is having on the hedge fund business, transparency is the most important enhancement the industry can embrace," John Hassett, Managing Principal of Tuckerbrook, said, "Tuckerbrook has always used third-party prime brokers, administrators and auditors in order to provide independent verification of fund activity, so it made sense to us to have daily asset transparency reports distributed directly from Citi Hedge Fund Services, to underscore the importance of both independent asset pricing and more frequent transparency. Although unique in the industry now, we would expect this level of reporting to become standard practice in the future."
Moses Grader, Chief Operating Officer of Tuckerbrook, said, "Ninety percent or more of all hedge fund investments are in commingled fund structures, with only the largest investors having daily accountability through separately managed accounts. Daily transparency at the client-account level, delivered by a trusted third party, is a major step up in accountability to those investors that don't have an SMA."
Russian Hedge Fund Pharos Reports on the Russian Investment Landscape
The events of 2008 were dramatic everywhere in the world, but particularly so in Russia. Despite the decline of -72.2% for the MSCI Index in 2008, the Pharos Russia Fund produced a positive 3 year annualized return of 1.3% with 24.8% volatility as compared to the MSCI Russia Index.
The Pharos Russia Fund's 5 year returns also show a strong outperformance against the MSCI Russia Index. The 11 year period of January 1998 through December 2008, which encompasses two market meltdowns and many other mini-crises, the Pharos Russia Fund has returned a total of 100.33%, against a gain of only 3.81% for the MSCI Russia Index.
"Our long history in the Russian financial markets through good times and bad times helps guide our investment philosophy and makes us mindful of the periodic crises that hit the market," Pharos says, "We seek to maximize our investor's returns over the medium term, and one of the most important aspects of that is to protect against severe losses in times of crisis."
Their flagship fund, Pharos Russia Fund, has been the most resilient performer in the Russia & CIS universe in 2008 and in January 09, Pharos Russia was up +0.4% whereas the Russian market RTS was down -15.3% and the MSCI Russia down -11.6%.
The market conditions in Russia deteriorated in an accelerating fashion once the May holiday revelry had ended. The commodity cycle reversed as economic indicators began to reflect the demand destruction caused by the slowing of credit availability. Waves of deleveraging of the global financial system soon followed. Russia suffered initially as the commodity focused investors sold positions, and again as investors generally sold down positions to reduce leverage. The last victim was the Russian oligarch.
The typical Russian billionaire was in fact a house of cards having taken on massive debt against the assets underlying his personal holdings. The publicly traded assets became subject universally to margin calls by international banks, while private assets found their mezzanine financing had evaporated. The result was a flashpoint in late-September when several of the largest local financial groups had become technically insolvent. The markets were frozen for a couple of days while the government intervened to provide liquidity and arrange shotgun marriages.
By this time, Pharos said, they had adjusted their positions to reflect the bankruptcy of Lehman Brothers and the growing instability of global markets. "While our overlay gave investors protection against a collapsing market, we realized that the fundamental structure of the markets was changing, and that our risk management concerns had to change."
"As the financial crisis continued, we were concerned about other effects on the market. Our experience in the 1998 crisis taught us that markets can get caught in downward spirals. We were particularly concerned that most Russian market players were fully invested and many were highly leveraged. This was a situation ripe for forced selling and further dramatic market declines."
While this tale of misadventure is unsurprising for an emerging market, it has also become the dangerous reality in the US and other developed markets as well, Pharos said.
"In Russia, there are a few key triggers that we are looking for before investing fully into the market. In past letters, we have identified credit normalization and commodity price stabilization as the two necessary, but perhaps not sufficient, conditions for Russia's bear market to end. While we do not expect credit availability to reach the extreme levels of the last few years, basic credit does need to flow again for companies to move out of crisis mode and for trade to resume in a normal manner. The Russian government has taken admirable steps to deal with the shutdown of credit, and after a slow start is now using the large reserves built up during the commodity boom to supply credit to Russian corporations that need help rolling over their debt."
The instability of the Russian markets will continue so long as oil prices remain unstable. At this stage, the oil price determines the fair value of the ruble, which, in turn, dictates the future course of Russia's economic growth, however, Pharos believes that the key to success from here is sizing positions to adjust for volatility, while being prepared to act quickly once signs of stability emerge.
The Pharos Russia Fund's 5 year returns also show a strong outperformance against the MSCI Russia Index. The 11 year period of January 1998 through December 2008, which encompasses two market meltdowns and many other mini-crises, the Pharos Russia Fund has returned a total of 100.33%, against a gain of only 3.81% for the MSCI Russia Index.
"Our long history in the Russian financial markets through good times and bad times helps guide our investment philosophy and makes us mindful of the periodic crises that hit the market," Pharos says, "We seek to maximize our investor's returns over the medium term, and one of the most important aspects of that is to protect against severe losses in times of crisis."
Their flagship fund, Pharos Russia Fund, has been the most resilient performer in the Russia & CIS universe in 2008 and in January 09, Pharos Russia was up +0.4% whereas the Russian market RTS was down -15.3% and the MSCI Russia down -11.6%.
The market conditions in Russia deteriorated in an accelerating fashion once the May holiday revelry had ended. The commodity cycle reversed as economic indicators began to reflect the demand destruction caused by the slowing of credit availability. Waves of deleveraging of the global financial system soon followed. Russia suffered initially as the commodity focused investors sold positions, and again as investors generally sold down positions to reduce leverage. The last victim was the Russian oligarch.
The typical Russian billionaire was in fact a house of cards having taken on massive debt against the assets underlying his personal holdings. The publicly traded assets became subject universally to margin calls by international banks, while private assets found their mezzanine financing had evaporated. The result was a flashpoint in late-September when several of the largest local financial groups had become technically insolvent. The markets were frozen for a couple of days while the government intervened to provide liquidity and arrange shotgun marriages.
By this time, Pharos said, they had adjusted their positions to reflect the bankruptcy of Lehman Brothers and the growing instability of global markets. "While our overlay gave investors protection against a collapsing market, we realized that the fundamental structure of the markets was changing, and that our risk management concerns had to change."
"As the financial crisis continued, we were concerned about other effects on the market. Our experience in the 1998 crisis taught us that markets can get caught in downward spirals. We were particularly concerned that most Russian market players were fully invested and many were highly leveraged. This was a situation ripe for forced selling and further dramatic market declines."
While this tale of misadventure is unsurprising for an emerging market, it has also become the dangerous reality in the US and other developed markets as well, Pharos said.
"In Russia, there are a few key triggers that we are looking for before investing fully into the market. In past letters, we have identified credit normalization and commodity price stabilization as the two necessary, but perhaps not sufficient, conditions for Russia's bear market to end. While we do not expect credit availability to reach the extreme levels of the last few years, basic credit does need to flow again for companies to move out of crisis mode and for trade to resume in a normal manner. The Russian government has taken admirable steps to deal with the shutdown of credit, and after a slow start is now using the large reserves built up during the commodity boom to supply credit to Russian corporations that need help rolling over their debt."
The instability of the Russian markets will continue so long as oil prices remain unstable. At this stage, the oil price determines the fair value of the ruble, which, in turn, dictates the future course of Russia's economic growth, however, Pharos believes that the key to success from here is sizing positions to adjust for volatility, while being prepared to act quickly once signs of stability emerge.
1 Feb 2009
Contributing Factors To Hedge Funds' 2008 Failure
Credit Suisse Tremont Index LLC released a new research piece, 'One for the History Books: Hedge Fund Performance in 2008', a review of the factors which contributed to hedge funds’ dismal -19% return in 2008
The report discusses the impact of events such as the fall of Lehman Brothers, the short sale ban and the scandal surrounding Bernard Madoff, offering insight into the impact of each event on individual sectors and the hedge fund industry as a whole. The piece also offers some comparisons to past market downturns, periods in which strategies saw severe declines in assets under management and how performance was impacted in the years that followed.
Some key takeaways from the report include:
The Broad Index, a diversified, asset weighted hedge fund index comprised of 496 underlying hedge funds (as of December 31, 2008), was down 19% for the year, marking 2008 the worst year in the history of the Broad Index.
It is estimated that the hedge fund industry lost approximately 29% of assets in 2008, totaling $582 billion, representing the first time in six years that the hedge fund industry has seen net asset losses.
One in five funds within the Broad Index posted positive returns for the year, with almost one in seven posting returns in the double digits.
The report discusses the impact of events such as the fall of Lehman Brothers, the short sale ban and the scandal surrounding Bernard Madoff, offering insight into the impact of each event on individual sectors and the hedge fund industry as a whole. The piece also offers some comparisons to past market downturns, periods in which strategies saw severe declines in assets under management and how performance was impacted in the years that followed.
Some key takeaways from the report include:
The Broad Index, a diversified, asset weighted hedge fund index comprised of 496 underlying hedge funds (as of December 31, 2008), was down 19% for the year, marking 2008 the worst year in the history of the Broad Index.
It is estimated that the hedge fund industry lost approximately 29% of assets in 2008, totaling $582 billion, representing the first time in six years that the hedge fund industry has seen net asset losses.
One in five funds within the Broad Index posted positive returns for the year, with almost one in seven posting returns in the double digits.
30 Jan 2009
Hedge Fund Manager to Appear in Court
Hedge fund manager Arthur Nadel is scheduled for a bail hearing in federal court in Tampa this afternoon.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
29 Jan 2009
Green Alternative Investment Software To Be Developed
CommodityPoint, a utilities analyst and consulting firm of UtiliPoint International, is partnering with Global Change Associates, convergence of energy and environmental financial markets specialist, to undertake a multi-client research project and to produce a study report around emissions trading & monitoring software.
“Green trading has now become established and various 'green' commodities are now actively traded by a variety of participants including carbon, SOx and Nox as well as RECs (Renwable Energy Credits). Investor interest in trading these commodities is at an all time high. Consequently there is a growing demand for software products that will support these trading and risk management activities as well as in those software products that monitor and help manage emissions," said Dr. Gary M. Vasey of CommodityPoint. "Indeed, as forecast in our book 'Trends in Energy Trading, Transaction and Risk Management Software - a Primer' (Booksurge, 2006), these two software categories are morphing as the two software markets collide."
“The emerging greenhouse gas market is now ripe for software solutions on an enterprise level. Today, the environmental software space is quite small. It is estimated at $100 million with many small companies developing and extending their domain expertise into this area and beyond energy company applications (energy companies have had to comply with environmental laws in many jurisdictions for over a decade),“ said Mr. Peter C. Fusaro of Global Change Associates Inc.“The need to measure and manage greenhouse gas emissions data is becoming a new area of business development for software companies especially with impending federal greenhouse gas laws in the United States."
“Green trading has now become established and various 'green' commodities are now actively traded by a variety of participants including carbon, SOx and Nox as well as RECs (Renwable Energy Credits). Investor interest in trading these commodities is at an all time high. Consequently there is a growing demand for software products that will support these trading and risk management activities as well as in those software products that monitor and help manage emissions," said Dr. Gary M. Vasey of CommodityPoint. "Indeed, as forecast in our book 'Trends in Energy Trading, Transaction and Risk Management Software - a Primer' (Booksurge, 2006), these two software categories are morphing as the two software markets collide."
“The emerging greenhouse gas market is now ripe for software solutions on an enterprise level. Today, the environmental software space is quite small. It is estimated at $100 million with many small companies developing and extending their domain expertise into this area and beyond energy company applications (energy companies have had to comply with environmental laws in many jurisdictions for over a decade),“ said Mr. Peter C. Fusaro of Global Change Associates Inc.“The need to measure and manage greenhouse gas emissions data is becoming a new area of business development for software companies especially with impending federal greenhouse gas laws in the United States."
28 Jan 2009
Deephaven's Hedge Fund Bought by Stark Investments
Deephaven Capital Management signed a deal on Tuesday to sell the assets of its flagship hedge fund, Knight Capital Group Inc., to Stark Investments.
The founders, Brian Stark and Mike Roth, will give Deephaven investors the option to become investors in Stark Funds by contributing their share of their Deephaven Fund portfolio positions, they said in a letter to shareholders. Deephaven in October suspended withdrawals from its $1.6 billion Deephaven Global Multi-Strategy funds after being overwhelmed by investor redemption requests.
"We believe this agreement is advantageous for Stark's and Deephaven's investors, and we are excited about the prospect of retaining their high quality investor base," Mike Roth said, "In strategically managing the business, we have put ourselves in a position to capitalize upon these types of situations. We will continue to be on the lookout for additional opportunities that complement our strategic plan and strengthen our organization."
Stark has headquarters in Milwaukee, Miami, London and Hong Kong.
The founders, Brian Stark and Mike Roth, will give Deephaven investors the option to become investors in Stark Funds by contributing their share of their Deephaven Fund portfolio positions, they said in a letter to shareholders. Deephaven in October suspended withdrawals from its $1.6 billion Deephaven Global Multi-Strategy funds after being overwhelmed by investor redemption requests.
"We believe this agreement is advantageous for Stark's and Deephaven's investors, and we are excited about the prospect of retaining their high quality investor base," Mike Roth said, "In strategically managing the business, we have put ourselves in a position to capitalize upon these types of situations. We will continue to be on the lookout for additional opportunities that complement our strategic plan and strengthen our organization."
Stark has headquarters in Milwaukee, Miami, London and Hong Kong.
27 Jan 2009
Eze & Reuters Sponsor Obama Hedge Fund Strategy Panel
Hedge fund tech. provider Eze Castle Integration and Thomson Reuters are sponsoring a panel to discuss hedge fund strategies and regulatory considerations for the Obama administration, the 'Obama Administration & Hedge Fund Strategies panel'.
Hedge funds and investment firms are discussing whether the Obama administration will have a positive or negative impact on existing hedge fund strategies.
Moderated by Daniel Burns, Reuters U.S. Financial Markets Editor, the panel also includes Reuters correspondents Jeff Mason and Jennifer Ablan and hedge fund managers Dan Castro, Chief Risk Officer of Huxley Capital and Theresa R. Patti, CFA, Managing Director of QFS Asset Management.
The Obama Administration & Hedge Fund Strategies panel will take place in New York City on Wednesday, January 28, from 5:30 – 7:30 p.m., at the Thomson Reuters office at 3 Times Square, New York.
Hedge funds and investment firms are discussing whether the Obama administration will have a positive or negative impact on existing hedge fund strategies.
Moderated by Daniel Burns, Reuters U.S. Financial Markets Editor, the panel also includes Reuters correspondents Jeff Mason and Jennifer Ablan and hedge fund managers Dan Castro, Chief Risk Officer of Huxley Capital and Theresa R. Patti, CFA, Managing Director of QFS Asset Management.
The Obama Administration & Hedge Fund Strategies panel will take place in New York City on Wednesday, January 28, from 5:30 – 7:30 p.m., at the Thomson Reuters office at 3 Times Square, New York.
Eurekahedge Forecasts More Hedge Fund Launches in 2009
Hedge funds returned a healthy 1% in January, wrapping up a tumultuous 2008 at -12.3%, according to Eurekahedge. Hedge fund assets fell $380 billion or 20% in 2008, from just under $1.9 trillion to just over $1.5 trillion.
Eurekahedge's forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
Eurekahedge's forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
FX Trading Grows 250% as Investors Look For Alternative to Hedge Fund Trading
Deutsche Bank's foreign exchange (FX) trading platform, dbFX.com, reported a surge in customer numbers in 2008 as FX grew as an asset class of choice for investors amid the financial crisis.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
26 Jan 2009
Hedge Fund Operational Due Diligence - Book Review
Informative book by Jason Scharfman on, well, pretty much everything you need to run a hedge fund, from risk management to disaster recovery, all need-to-know material for both investors and hedge fund analysts.
Included are examples of past hedge fund management mistakes, showing exactly where the managers went wrong, and how to avoid downfalls such as the ‘but everyone is doing it’ excuse, among others.
Technical though understandable, Scharfman also expains the reliance on technology that is becoming ever more apparent in hedge funds, the dangers of phantomware, and questions that should be asked before commiting to any new technology.
I liked this book for the simple reason that it explains just about everything, almost like a handbook, the index makes an excellent resource.
Since writing the book he has left his position at Morgan Stanley and now runs an operational due diligence consulting firm called Corgentum Consulting. Corgentum works with hedge funds and investors to diagnose and mitigate operational risk at hedge funds and improve upon the of the operational due diligence process.
Available at Amazon
Included are examples of past hedge fund management mistakes, showing exactly where the managers went wrong, and how to avoid downfalls such as the ‘but everyone is doing it’ excuse, among others.
Technical though understandable, Scharfman also expains the reliance on technology that is becoming ever more apparent in hedge funds, the dangers of phantomware, and questions that should be asked before commiting to any new technology.
I liked this book for the simple reason that it explains just about everything, almost like a handbook, the index makes an excellent resource.
Since writing the book he has left his position at Morgan Stanley and now runs an operational due diligence consulting firm called Corgentum Consulting. Corgentum works with hedge funds and investors to diagnose and mitigate operational risk at hedge funds and improve upon the of the operational due diligence process.
Available at Amazon
Gates Donates Despite Economic Distress
In a letter scheduled to be released today, January 26th, Bill Gates is offering insight to the world both about the current financial crisis as well as what his foundation has been able to do despite it.
Matthew Bishop, New York Bureau Chief and American Business Editor for The Economist conducted the interview, where Gates said his foundation’s assets may be shrinking, but it is increasing its giving in 2009, from $3.3 billion last year to $3.8 billion—the biggest ever annual budget for a charitable foundation.
Much of this will go towards finding ways to reduce deaths from the 20 diseases that kill the most people in poor countries, according to the Economist. Gates has high hopes that the number of children who die each year can be cut by half, to 5m, within 20 years, just as it was cut by half in the past half-century. Polio will soon be eradicated, he believes, and deaths from malaria can fall by half by 2015.
In a year of economic distress and record losses, optimism and generosity are still central to Gates, he says in the interview. With projected increases in giving in 2009, The Bill and Melinda Gates Foundation will continue to focus on healthcare issues around the world as well as education reforms.
Similarly, he says he is optimistic that Barack Obama’s administration will make progress on school reform, pointing to the extra spending on schools contained in Mr Obama’s economic stimulus package and the fact that the new education secretary, Arne Duncan, welcomed Gates-funded charter schools in Chicago.
Matthew Bishop, New York Bureau Chief and American Business Editor for The Economist conducted the interview, where Gates said his foundation’s assets may be shrinking, but it is increasing its giving in 2009, from $3.3 billion last year to $3.8 billion—the biggest ever annual budget for a charitable foundation.
Much of this will go towards finding ways to reduce deaths from the 20 diseases that kill the most people in poor countries, according to the Economist. Gates has high hopes that the number of children who die each year can be cut by half, to 5m, within 20 years, just as it was cut by half in the past half-century. Polio will soon be eradicated, he believes, and deaths from malaria can fall by half by 2015.
In a year of economic distress and record losses, optimism and generosity are still central to Gates, he says in the interview. With projected increases in giving in 2009, The Bill and Melinda Gates Foundation will continue to focus on healthcare issues around the world as well as education reforms.
Similarly, he says he is optimistic that Barack Obama’s administration will make progress on school reform, pointing to the extra spending on schools contained in Mr Obama’s economic stimulus package and the fact that the new education secretary, Arne Duncan, welcomed Gates-funded charter schools in Chicago.
23 Jan 2009
EUEC Workshop fo Carbon Hedge Funds
Two prominent carbon and CDM Experts, Peter C. Fusaro, Dr. Prabhu Dayal are presenting the 'EUEC 2009' in Phoenix, Arizona, the Carbon Trading course includes practical case studies for the design and development of CDM Projects and Certified Emission Reductions (CERs).
Aletrnative investment strategist, Global Change Associates, says the workshop will provide insights on the state of carbon trading markets and finance in the US and Europe and what some of the investment opportunities are in this emerging asset class for investors.
Case studies of renewable energy projects being developed by C TRADE in the Philippines will be used to illustrate the certification process for CERs, where methane gas emissions are avoided and electric power generated using waste methane bio-digester gas recovered from animal manure.
Fusaro is a Global Change Associates carbon expert and best selling author of "What Went Wrong at Enron", Dayal is President of C TRADE and Chair for EUEC.
Aletrnative investment strategist, Global Change Associates, says the workshop will provide insights on the state of carbon trading markets and finance in the US and Europe and what some of the investment opportunities are in this emerging asset class for investors.
Case studies of renewable energy projects being developed by C TRADE in the Philippines will be used to illustrate the certification process for CERs, where methane gas emissions are avoided and electric power generated using waste methane bio-digester gas recovered from animal manure.
Fusaro is a Global Change Associates carbon expert and best selling author of "What Went Wrong at Enron", Dayal is President of C TRADE and Chair for EUEC.
Veteran of U.S. Secret Service Heads Up AlphaMetrix’s Financial Investigations Group
To root out fraud and to give investors increased confidence that their assets are being managed with institutions of integrity and honesty, AlphaMetrix formally introduced AlphaMetrix Financial Investigations, LLC, run by David Fisher, a 24-year veteran of the US Secret Service.
AlphaMetrix is a research and investment platform for managed futures and other liquid alpha strategies with approximately $1.7 billion on the platform.
“Under David's leadership, the alternative investment company seeks to set a new standard for the due diligence on financial institutions,” the company said in a letter received by HedgeCo, “first focusing on those on the AlphaMetrix platform, and later as a third-party provider of due diligence services.”
Fisher has a strong domestic and international investigative background in financial fraud, background investigations, security planning and electronic crimes. In addition to responsibilities associated with the Secret Service’s well-known role protecting the President, Vice President and visiting Heads of State, Fisher also brings extensive experience from the agency’s core investigative mission into financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers and money laundering.
“AlphaMetrix has always been known for our deep trading manager research capabilities, and the new Financial Investigations group takes that to an even higher level, with comprehensive background checks and reviews of operational risk,” said Aleks Kins, CEO of AlphaMetrix.
“This type of due diligence work takes a consummate professional, so we are particularly excited to have someone of David Fisher’s caliber on board to build AlphaMetrix Financial Investigations into a thriving organization,” he added.
AlphaMetrix is a research and investment platform for managed futures and other liquid alpha strategies with approximately $1.7 billion on the platform.
“Under David's leadership, the alternative investment company seeks to set a new standard for the due diligence on financial institutions,” the company said in a letter received by HedgeCo, “first focusing on those on the AlphaMetrix platform, and later as a third-party provider of due diligence services.”
Fisher has a strong domestic and international investigative background in financial fraud, background investigations, security planning and electronic crimes. In addition to responsibilities associated with the Secret Service’s well-known role protecting the President, Vice President and visiting Heads of State, Fisher also brings extensive experience from the agency’s core investigative mission into financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers and money laundering.
“AlphaMetrix has always been known for our deep trading manager research capabilities, and the new Financial Investigations group takes that to an even higher level, with comprehensive background checks and reviews of operational risk,” said Aleks Kins, CEO of AlphaMetrix.
“This type of due diligence work takes a consummate professional, so we are particularly excited to have someone of David Fisher’s caliber on board to build AlphaMetrix Financial Investigations into a thriving organization,” he added.
22 Jan 2009
Novices Given $1 Million to Start a Hedge Fund on TV
Avanta is making its UK television debut with Million Dollar Traders on BBC2. Aired for 3 weeks in January, the series will play out at Avanta's Austin Friars business centre in London.
The program gives eight ordinary people a million dollars and two weeks of intensive training to help prepare them to launch their own hedge fund and try to make their fortune in the stocks and shares market.
The traders set up camp in one of the buildings grade A office suites, buying and selling in the stock market in an attempt to make their millions.
Avanta was formed in 2004 by David Alberto, previously with Regus and former Managing Director at MWB Business Exchange. The company offers unbranded office space with advanced and competitively priced technology. In the UK it currently manages over 670,000 sq ft of office space in prime locations in London, the Thames Valley, Manchester, Birmingham and Edinburgh. Avanta’s first international business centre in New Delhi, India opened in September 2008 and a further two centres are now open in Mumbai.
The program gives eight ordinary people a million dollars and two weeks of intensive training to help prepare them to launch their own hedge fund and try to make their fortune in the stocks and shares market.
The traders set up camp in one of the buildings grade A office suites, buying and selling in the stock market in an attempt to make their millions.
Avanta was formed in 2004 by David Alberto, previously with Regus and former Managing Director at MWB Business Exchange. The company offers unbranded office space with advanced and competitively priced technology. In the UK it currently manages over 670,000 sq ft of office space in prime locations in London, the Thames Valley, Manchester, Birmingham and Edinburgh. Avanta’s first international business centre in New Delhi, India opened in September 2008 and a further two centres are now open in Mumbai.
Fidelity Launches Indian Fund of Hedge Funds
Fidelity International is launching the Fidelity Wealth Builder Fund through it's Indian asset management arm, the new fund is an open ended fund of funds scheme offering asset allocation options with three plans.
The investment objective of the fund is to seek to generate reasonable returns based on the plan selected with minimum and maximum asset allocation between debt and equity. The fund manager will use a two-tier investment approach – asset allocation and fund selection – to invest in Fidelity’s funds. The NFO will be open from January 14 to February 5, 2009. The Fund will open for ongoing purchases and redemptions from March 2, 2009
“Asset allocation decisions can drive as much as 91.5% of investment returns variability, as studies have shown." Ashu Suyash, Managing Director and Country Head - India, Fidelity International, said, "In the current market conditions of heightened volatility, a fund like the Fidelity Wealth Builder Fund provides investors a convenient route to benefit from disciplined asset allocation. We are in an environment where attractive returns are likely in the bond market and there is potential for bear-market rallies in equities on the back of increasingly attractive valuations.”
Ms. Suyash added, “To encourage investors who have turned risk averse, the Fidelity Wealth Builder Fund is a fund with no entry load. Whether investors invest through their advisers or directly, they will not be charged an entry load. Moreover, the Fund also offers investors free switch-in and switch-out facility between the Plans, if, over time, investors’ outlook for debt and equity changes.”
The Fund will offer Growth and Dividend options. A dividend is proposed to be declared, subject to availability of distributable surplus, on a Quarterly basis under Plan A and Plan B. Under Plan C, the dividend may be declared by the Trustee, at its discretion, from time to time subject to the availability of distributable surplus.
The minimum initial investment is Rs.5000.($100K )Investors can invest in the Fidelity Wealth Builder Fund even through the SIP route with a minimum amount of Rs. 500 per installment with the total of all installments not being less than Rs.5000. In addition, the systematic transfer and systematic withdrawal plans are also available.
FIL Fund Management Private Limited is the Indian arm of Fidelity International, one of the world's leading global investment management companies with operations in 23 countries and more than $197.9 billion in assets under management.
The investment objective of the fund is to seek to generate reasonable returns based on the plan selected with minimum and maximum asset allocation between debt and equity. The fund manager will use a two-tier investment approach – asset allocation and fund selection – to invest in Fidelity’s funds. The NFO will be open from January 14 to February 5, 2009. The Fund will open for ongoing purchases and redemptions from March 2, 2009
“Asset allocation decisions can drive as much as 91.5% of investment returns variability, as studies have shown." Ashu Suyash, Managing Director and Country Head - India, Fidelity International, said, "In the current market conditions of heightened volatility, a fund like the Fidelity Wealth Builder Fund provides investors a convenient route to benefit from disciplined asset allocation. We are in an environment where attractive returns are likely in the bond market and there is potential for bear-market rallies in equities on the back of increasingly attractive valuations.”
Ms. Suyash added, “To encourage investors who have turned risk averse, the Fidelity Wealth Builder Fund is a fund with no entry load. Whether investors invest through their advisers or directly, they will not be charged an entry load. Moreover, the Fund also offers investors free switch-in and switch-out facility between the Plans, if, over time, investors’ outlook for debt and equity changes.”
The Fund will offer Growth and Dividend options. A dividend is proposed to be declared, subject to availability of distributable surplus, on a Quarterly basis under Plan A and Plan B. Under Plan C, the dividend may be declared by the Trustee, at its discretion, from time to time subject to the availability of distributable surplus.
The minimum initial investment is Rs.5000.($100K )Investors can invest in the Fidelity Wealth Builder Fund even through the SIP route with a minimum amount of Rs. 500 per installment with the total of all installments not being less than Rs.5000. In addition, the systematic transfer and systematic withdrawal plans are also available.
FIL Fund Management Private Limited is the Indian arm of Fidelity International, one of the world's leading global investment management companies with operations in 23 countries and more than $197.9 billion in assets under management.
Morningstar Reviews 2008's Losses and Gains
In their summary of hedge fund performance for the fourth quarter and full year of 2008 as well as asset flows through November, Morningstar reported that 2008's low returns wiped out the last two years gains.
Investors lost their appetite for hedge funds in 2008, Morningstar says, as the vehicles intended to deliver absolute returns were forced to resort to relative claims of success.
"In 2008, hedge fund managers generally failed to deliver," said Morningstar Hedge Fund Analyst Nadia Papagiannis. "The average hedge fund may have lost less than the stock market, thanks in part to large cash allocations, but this level of performance was not why investors agreed to pay 2% management fees and 20% performance fees."
Hedge fund inflows peaked in June 2007 and bottomed in October 2008, when more than $21 billion left the industry. In November 2008, another $19.4 billion flowed out of hedge funds, setting the year-to-date outflows at more than $44 billion.
The number of funds dropping out of Morningstar`s database increased more than 150% in 2008 from 2007—1,158 single-manager funds and 490 funds of funds were removed in 2008 compared to 434 single-manager funds and 208 funds of funds in 2007. (Funds are removed from Morningstar’s database if the fund liquidates, if the manager wishes to stop reporting returns, or if funds fail to report returns for six months.)
Emerging market equities proved to be the worst strategy in 2008, along with convertible arbitrage funds, which took a big hit in 2008.
The best-performing strategy this year was global trend following, a systematic strategy that tracks price trends in liquid derivatives such as futures, options, and currency forwards.
Morningstar has approximately 8,400 hedge funds and funds of hedge funds in its database.
Investors lost their appetite for hedge funds in 2008, Morningstar says, as the vehicles intended to deliver absolute returns were forced to resort to relative claims of success.
"In 2008, hedge fund managers generally failed to deliver," said Morningstar Hedge Fund Analyst Nadia Papagiannis. "The average hedge fund may have lost less than the stock market, thanks in part to large cash allocations, but this level of performance was not why investors agreed to pay 2% management fees and 20% performance fees."
Hedge fund inflows peaked in June 2007 and bottomed in October 2008, when more than $21 billion left the industry. In November 2008, another $19.4 billion flowed out of hedge funds, setting the year-to-date outflows at more than $44 billion.
The number of funds dropping out of Morningstar`s database increased more than 150% in 2008 from 2007—1,158 single-manager funds and 490 funds of funds were removed in 2008 compared to 434 single-manager funds and 208 funds of funds in 2007. (Funds are removed from Morningstar’s database if the fund liquidates, if the manager wishes to stop reporting returns, or if funds fail to report returns for six months.)
Emerging market equities proved to be the worst strategy in 2008, along with convertible arbitrage funds, which took a big hit in 2008.
The best-performing strategy this year was global trend following, a systematic strategy that tracks price trends in liquid derivatives such as futures, options, and currency forwards.
Morningstar has approximately 8,400 hedge funds and funds of hedge funds in its database.
21 Jan 2009
GLG Partners Adds Pendragon Hedge Fund Managers
Global alternative asset manager, GLG Partners LP, is teaming up with two of the founding partners of London hedge fund Pendragon Capital, Kaveh Sheibani and Julian Harvey Wood, to focus on event driven strategies.
In addition, GLG Partners LP will become the investment manager of the funds and accounts managed by Pendragon Capital. Before founding and managing Pendragon Capital with Gordon Lawson, Kaveh and Julian had worked together managing European proprietary trading in equities at Salomon Brothers (subsequently Citigroup).
"Kaveh and Julian are both highly experienced, event driven professionals and we expect that this team will greatly enhance and expand GLG's own event driven franchise," Emmanuel Roman, Co-CEO of GLG commented.
As of September 30, 2008, GLG managed net AUM of over $17 billion.
In addition, GLG Partners LP will become the investment manager of the funds and accounts managed by Pendragon Capital. Before founding and managing Pendragon Capital with Gordon Lawson, Kaveh and Julian had worked together managing European proprietary trading in equities at Salomon Brothers (subsequently Citigroup).
"Kaveh and Julian are both highly experienced, event driven professionals and we expect that this team will greatly enhance and expand GLG's own event driven franchise," Emmanuel Roman, Co-CEO of GLG commented.
As of September 30, 2008, GLG managed net AUM of over $17 billion.
20 Jan 2009
Independent Hedge Fund Management Key to Investor Trust
The recent wave of scandal related to hedge funds and funds of funds has made investors think twice about investing in self-administrated funds, see 'Andrew Schneider on Nadel Funds'.
Dermot Butler, Chairman of alternative fund administrator, Custom House Group, said, “In today’s new investment environment, more than ever hedge funds and funds-of-funds must have independent outside administrators as a foundation to help rebuild investor confidence and attract new investment capital.”
Fund administrators, such as the $35 billion Custom House Group, provide a range of services to funds and fund-of-funds including (but not limited to), fund accounting, portfolio valuation, NAV calculation and shareholder services as well as anti-money laundering services and reconciliation services and record-keeping functions.
“In anything less than an independent fund administration relationship, there is at the very least a perception that a conflict of interest may exist that could prevent objective verification of a fund’s investment activities and even the existence of underlying assets in a given fund, let alone an objective and accurate valuation of the fund's assets,” Butler said. “This perceived conflict may occur when an outside administrator is affiliated with a financial institution, with an investment manager, or when the administrator is associated with a hedge fund itself.”
“As stand-alone companies, independent administrators have no affiliations to any outside financial entities, et ergo, no such conflicts exist,” he concluded.
Dermot Butler, Chairman of alternative fund administrator, Custom House Group, said, “In today’s new investment environment, more than ever hedge funds and funds-of-funds must have independent outside administrators as a foundation to help rebuild investor confidence and attract new investment capital.”
Fund administrators, such as the $35 billion Custom House Group, provide a range of services to funds and fund-of-funds including (but not limited to), fund accounting, portfolio valuation, NAV calculation and shareholder services as well as anti-money laundering services and reconciliation services and record-keeping functions.
“In anything less than an independent fund administration relationship, there is at the very least a perception that a conflict of interest may exist that could prevent objective verification of a fund’s investment activities and even the existence of underlying assets in a given fund, let alone an objective and accurate valuation of the fund's assets,” Butler said. “This perceived conflict may occur when an outside administrator is affiliated with a financial institution, with an investment manager, or when the administrator is associated with a hedge fund itself.”
“As stand-alone companies, independent administrators have no affiliations to any outside financial entities, et ergo, no such conflicts exist,” he concluded.
Excerpts and Commentary on Ben McGrath’s "The Dystopians" – Jan 26th, New Yorker
"Bad times are boom times for some."
The article starts off with US resident Dmitry Orlov, from Leningrad, who has been living on a semi-self-sustainable boat in a form 'bourgeois survivalism' for 2 ½ years, riding a bicycle and skipping the TV.
After the downfall of the Soviet Union he learned a lesson for future reference: “When faced with a collapsing economy, one should stop thinking of wealth in terms of money.”
In his 2008 book, “Reinventing Collapse: The Soviet Example and American Prospects,” Orlov identifies the ingredients of what he calls “superpower collapse soup” — a severe shortfall in the production of crude oil, a worsening foreign-trade deficit, an oversized military budget, and crippling foreign debt.
“We don’t have a long wait before sail-based transport is the only option,” he said, anticipating dire environmental conditions. Should the need to raise chickens arise, Orlov and his wife will "set sail and relocate to a more rural base of operations," where the boat, Hogfish, which has a flat bottom, can double as a trailer home.
In 2006, Orlov published an online manifesto, “The New Age of Sail,” where he writes that sailing has the additional benefit of providing “isometric exercise similar to a Pilates workout,” because of the constant jostling of the sea. “People who live aboard are rarely overweight.”
In a blog that he maintains, Club Orlov, he categorises his readers into three basic cultural categories;
1. “back-to-the-land types,” united in their opposition to industrial agriculture;
2. “peak oilers,” who worry about the shock effects on energy markets of reaching the maximum global crude-extraction rate; and all-around Cassandras, and
3. “people who sometimes derisively are called doomers.” (The doomers are currently enjoying a little less derision, which is a mixed blessing, because it is axiomatic among true believers that mainstream respect means that it is too late for anything to be done.)
Orlov has recently acquired a fourth audience, composed of financial professionals, who have been, as he said, “bolstering my gut feeling that the United States is bankrupt.” A number of them have placed orders for multiple copies of his book, and he took some pleasure in imagining them passing it on to their friends and families this past holiday season as a grim kind of stocking stuffer.
Also mentioned is Jim Sinclair and his website: jsmineset.com, on which he posts daily blitzes of commentary with headers like “What Happens in Iceland Doesn’t Always Stay in Iceland.”
Ben McGrath meets James Howard Kunstler, author of “The Geography of Nowhere,” and “World Made by Hand,” which is set in a small town north of Albany, where the residents have no oil, no coffee, no spices, no mail delivery, and only sporadic electricity, but marijuana cultivation is booming and they’re growing “buds the size of plums.”
Also recommended for dystopians are Cormac McCarthy’s “The Road,” and Nassim Nicholas Taleb’s best-selling book “The Black Swan,” about the inevitability of unforeseeable events.
“I’d say an emergency meeting of the G7 is pretty much the front entrance,” Kunstler said. “Although who would have thought Iceland would be the first to go?...... Capitalism and human ingenuity persist; it’s only the economic incentives that change."
Kunstler likes to say that the United States has “a railroad system that the Bulgarians would be ashamed of,” and told a joke involving orders from the Treasury Secretary, Henry Paulson, to his underlings, to “buy the Dow,” in order to stave off consumer panic.
Three days after the Presidential election, in Montpelier, Vermont, at a convention of nearly two hundred “neo-Luddites, anarchists, socialists, freegans, steampunks, homeschoolers, folksingers, knitters and yak farmers”, Knustler called himself “an emissary from a place you may someday regard as foreign: New York State. . . . For the moment, we remain sister and brother states in a nation that is enduring a convulsion.”
He declared that the airline industry as we know it will not exist within forty-eight months, or by the end of President Obama’s first term.
These were people whose solution to the imminent death of the American dream was secession: a Vermont Independence Convention, sponsored by the Second Vermont Republic, a “nonviolent citizens’ network and think tank opposed to the tyranny of Corporate America and the U.S. Government.”
Also speaking were Chellis Glendinning, the author of “My Name Is Chellis and I’m in Recovery from Western Civilization,” and Lynette Clark, the chair of the Alaskan Independence Party,
The speeches were accompanied by comic and musical interludes from the Bread & Puppet Theatre, whose members wore bear costumes and danced around with plungers, and by the singing of the Vermont secession anthem: “It’s Vermonters to the lifeboats, this is a sinkin’ ship....”
Alex Akesson
Editor for HedgeCo.net
Along these lines I would also recommend reading: "Game Over" how to prosper in a shattered economy – by Stephen Leeb.
The article starts off with US resident Dmitry Orlov, from Leningrad, who has been living on a semi-self-sustainable boat in a form 'bourgeois survivalism' for 2 ½ years, riding a bicycle and skipping the TV.
After the downfall of the Soviet Union he learned a lesson for future reference: “When faced with a collapsing economy, one should stop thinking of wealth in terms of money.”
In his 2008 book, “Reinventing Collapse: The Soviet Example and American Prospects,” Orlov identifies the ingredients of what he calls “superpower collapse soup” — a severe shortfall in the production of crude oil, a worsening foreign-trade deficit, an oversized military budget, and crippling foreign debt.
“We don’t have a long wait before sail-based transport is the only option,” he said, anticipating dire environmental conditions. Should the need to raise chickens arise, Orlov and his wife will "set sail and relocate to a more rural base of operations," where the boat, Hogfish, which has a flat bottom, can double as a trailer home.
In 2006, Orlov published an online manifesto, “The New Age of Sail,” where he writes that sailing has the additional benefit of providing “isometric exercise similar to a Pilates workout,” because of the constant jostling of the sea. “People who live aboard are rarely overweight.”
In a blog that he maintains, Club Orlov, he categorises his readers into three basic cultural categories;
1. “back-to-the-land types,” united in their opposition to industrial agriculture;
2. “peak oilers,” who worry about the shock effects on energy markets of reaching the maximum global crude-extraction rate; and all-around Cassandras, and
3. “people who sometimes derisively are called doomers.” (The doomers are currently enjoying a little less derision, which is a mixed blessing, because it is axiomatic among true believers that mainstream respect means that it is too late for anything to be done.)
Orlov has recently acquired a fourth audience, composed of financial professionals, who have been, as he said, “bolstering my gut feeling that the United States is bankrupt.” A number of them have placed orders for multiple copies of his book, and he took some pleasure in imagining them passing it on to their friends and families this past holiday season as a grim kind of stocking stuffer.
Also mentioned is Jim Sinclair and his website: jsmineset.com, on which he posts daily blitzes of commentary with headers like “What Happens in Iceland Doesn’t Always Stay in Iceland.”
Ben McGrath meets James Howard Kunstler, author of “The Geography of Nowhere,” and “World Made by Hand,” which is set in a small town north of Albany, where the residents have no oil, no coffee, no spices, no mail delivery, and only sporadic electricity, but marijuana cultivation is booming and they’re growing “buds the size of plums.”
Also recommended for dystopians are Cormac McCarthy’s “The Road,” and Nassim Nicholas Taleb’s best-selling book “The Black Swan,” about the inevitability of unforeseeable events.
“I’d say an emergency meeting of the G7 is pretty much the front entrance,” Kunstler said. “Although who would have thought Iceland would be the first to go?...... Capitalism and human ingenuity persist; it’s only the economic incentives that change."
Kunstler likes to say that the United States has “a railroad system that the Bulgarians would be ashamed of,” and told a joke involving orders from the Treasury Secretary, Henry Paulson, to his underlings, to “buy the Dow,” in order to stave off consumer panic.
Three days after the Presidential election, in Montpelier, Vermont, at a convention of nearly two hundred “neo-Luddites, anarchists, socialists, freegans, steampunks, homeschoolers, folksingers, knitters and yak farmers”, Knustler called himself “an emissary from a place you may someday regard as foreign: New York State. . . . For the moment, we remain sister and brother states in a nation that is enduring a convulsion.”
He declared that the airline industry as we know it will not exist within forty-eight months, or by the end of President Obama’s first term.
These were people whose solution to the imminent death of the American dream was secession: a Vermont Independence Convention, sponsored by the Second Vermont Republic, a “nonviolent citizens’ network and think tank opposed to the tyranny of Corporate America and the U.S. Government.”
Also speaking were Chellis Glendinning, the author of “My Name Is Chellis and I’m in Recovery from Western Civilization,” and Lynette Clark, the chair of the Alaskan Independence Party,
The speeches were accompanied by comic and musical interludes from the Bread & Puppet Theatre, whose members wore bear costumes and danced around with plungers, and by the singing of the Vermont secession anthem: “It’s Vermonters to the lifeboats, this is a sinkin’ ship....”
Alex Akesson
Editor for HedgeCo.net
Along these lines I would also recommend reading: "Game Over" how to prosper in a shattered economy – by Stephen Leeb.
Obama's Stimulus Package - New Yorker Review
I received an advance copy of an article from the financial pages of next weeks New Yorker, "A Smarter Stimulus", where James Surowiecki describes the pros and cons of Obama's plan to include more than a hundred billion dollars in individual tax rebates in his stimulus package.
Although his promised tax cuts are a surefire political winner, he has also earned criticism from both ends of the political spectrum, Surowiecki writes, "Skeptics on both sides worry that most people will save the rebate rather than spend it."
In the past, as in 2001, less than half of the tax rebate was estimated to have been spent, the article says. And while the results of last year’s rebate seem to have been somewhat more encouraging, much of it still went unspent.
Surowiecki also explains how people will either on spend or save depending on where the money comes from, "Casino winnings are more likely to be spent than, say, money from an inheritance." he says, "A key factor is whether people think of a windfall as wealth or as income. If they think of it as wealth, they’re more likely to save it, and if they think of it as income they’re more likely to spend it."
The article concludes: "On its own, Obama’s rebate plan isn’t going to resurrect the economy. But it’s a policy that works with people as they are, rather than as we imagine they should be. And that’s a stimulus in itself."
Available from January 26th, "A Smarter Stimulus" by James Surowiecki, New Yorker.
Although his promised tax cuts are a surefire political winner, he has also earned criticism from both ends of the political spectrum, Surowiecki writes, "Skeptics on both sides worry that most people will save the rebate rather than spend it."
In the past, as in 2001, less than half of the tax rebate was estimated to have been spent, the article says. And while the results of last year’s rebate seem to have been somewhat more encouraging, much of it still went unspent.
Surowiecki also explains how people will either on spend or save depending on where the money comes from, "Casino winnings are more likely to be spent than, say, money from an inheritance." he says, "A key factor is whether people think of a windfall as wealth or as income. If they think of it as wealth, they’re more likely to save it, and if they think of it as income they’re more likely to spend it."
The article concludes: "On its own, Obama’s rebate plan isn’t going to resurrect the economy. But it’s a policy that works with people as they are, rather than as we imagine they should be. And that’s a stimulus in itself."
Available from January 26th, "A Smarter Stimulus" by James Surowiecki, New Yorker.
Third Party Administrators to Improve Hedge Fund Transparency
In an example of how hedge funds and CTAs are turning to third-party administrators with an eye on offering their investors improved transparency, hedge fund and FoHF provider Spectrum Global Fund Administration has teamed up with with AlphaMetrix LLC, a managed futures investment platform.
AlphaMetrix says it chose Spectrum for their "ability to easily provide estimated daily NAVs and to facilitate semi-monthly liquidity, critical differentiators at a time of heightened investor sensitivity regarding alternative investments." The platform will provide investors with access, research and real-time performance reporting to managed futures funds and commodity trading advisors (CTAs).
“The AlphaMetrix value proposition is built on what we call ‘TLC,’ which stands for transparency, liquidity and custody,” said Aleks Kins, founder and CEO of AlphaMetrix. “In partnering with Spectrum, we have selected the only fund administrator that can produce the estimated daily NAV reporting our clients demand, and handle the increased complexity associated with more frequent liquidity.”
Currently, client assets allocated over the AlphaMetrix Platform total approximately $1.7 billion, which includes both direct investments and managed account tracking.
AlphaMetrix says it chose Spectrum for their "ability to easily provide estimated daily NAVs and to facilitate semi-monthly liquidity, critical differentiators at a time of heightened investor sensitivity regarding alternative investments." The platform will provide investors with access, research and real-time performance reporting to managed futures funds and commodity trading advisors (CTAs).
“The AlphaMetrix value proposition is built on what we call ‘TLC,’ which stands for transparency, liquidity and custody,” said Aleks Kins, founder and CEO of AlphaMetrix. “In partnering with Spectrum, we have selected the only fund administrator that can produce the estimated daily NAV reporting our clients demand, and handle the increased complexity associated with more frequent liquidity.”
Currently, client assets allocated over the AlphaMetrix Platform total approximately $1.7 billion, which includes both direct investments and managed account tracking.
Hedge Fund Manager SVM Launches Long/Short Fund
Privately-owned investment management company, SVM Asset Management, is seeking approval from the Financial Services Authority for the launch of the long/short SVM UK Absolute Alpha Fund, which has a similar investment approach to their SVM Saltire fund, which returned +19.7% in 2008.
The fund, if approved, will have the flexibility to move from a net long to a net short position differentiating it from other absolute return funds, the company says. Managed by Colin McLean, returns will be driven by stock selection and the net position of the fund will be determined by whether the manager has more long or short stock ideas at the time.
"In 2008 just 31 of the stocks in the FTSE All Share ended the year higher, and 580 were down. It is therefore not surprising that few long only managers were able to profit," McLean says, "Without question this year will be challenging for the economy. However, at a company level there will be winners and losers and fundamental stock picking skills will be required to identify them."
The focus will be on generating positive returns over the long term rather than positive performance each month, as such SVM believes the appropriate time frame for investing in the new fund is at least three years.
Based in Edinburgh, SVM focuses principally on global fund of funds, UK and European equities.
The fund, if approved, will have the flexibility to move from a net long to a net short position differentiating it from other absolute return funds, the company says. Managed by Colin McLean, returns will be driven by stock selection and the net position of the fund will be determined by whether the manager has more long or short stock ideas at the time.
"In 2008 just 31 of the stocks in the FTSE All Share ended the year higher, and 580 were down. It is therefore not surprising that few long only managers were able to profit," McLean says, "Without question this year will be challenging for the economy. However, at a company level there will be winners and losers and fundamental stock picking skills will be required to identify them."
The focus will be on generating positive returns over the long term rather than positive performance each month, as such SVM believes the appropriate time frame for investing in the new fund is at least three years.
Based in Edinburgh, SVM focuses principally on global fund of funds, UK and European equities.
16 Jan 2009
HK Fund to team up with Paulson Hedge Fund in Offshore Launch
One of Hong Kong’s largest independent financial institutions, Sun Hung Kai Financial, is teaming up with hedge fund Paulson & Co, launching a distressed asset investment fund, according to a Reuters report.
John Paulson will act as the new $100 million offshore fund's investment manager. The fund will only be open to professional investors and will feed into Paulson’s existing “recovery fund”, which invests in distressed financial assets, according to the report.
With approximately $29 billion in assets under management Paulson hedge fund has offices in New York, London and Hong Kong. Sun Hung Kai has over HK$50 billion ($6.45 billion) in assets under management, together, the funds plan to invest globally, but are focused mainly on the United States.
Rizal Wijono, Managing Director at SHK Fund Management Limited, the Sun Hung Kai's asset management business said, “There is a lot of turmoil in the U.S., which is Paulson’s home market. They’ve been looking at a approximately 100 financial institutions who they think are going to be the survivors and the failures,” he said, “To date, they’re looking into Asia, but they haven’t identified potential positions yet. If you’re looking for maximum appreciation, the obvious place is the developed world.”
John Paulson will act as the new $100 million offshore fund's investment manager. The fund will only be open to professional investors and will feed into Paulson’s existing “recovery fund”, which invests in distressed financial assets, according to the report.
With approximately $29 billion in assets under management Paulson hedge fund has offices in New York, London and Hong Kong. Sun Hung Kai has over HK$50 billion ($6.45 billion) in assets under management, together, the funds plan to invest globally, but are focused mainly on the United States.
Rizal Wijono, Managing Director at SHK Fund Management Limited, the Sun Hung Kai's asset management business said, “There is a lot of turmoil in the U.S., which is Paulson’s home market. They’ve been looking at a approximately 100 financial institutions who they think are going to be the survivors and the failures,” he said, “To date, they’re looking into Asia, but they haven’t identified potential positions yet. If you’re looking for maximum appreciation, the obvious place is the developed world.”
Bankrupt Tulsa Execs Receive Over $3 Milllion in Bonuses
A pair of SemGroup LP executives are the only two administrators named to receive bonuses from both the bankrupt Tulsa company and its publicly held and struggling subsidiary, SemGroup Energy Partners LP, tulsaworld.com first reported Thursday.
Pete Schwiering and Jerry Parsons were named among 10 SemGroup LP leaders slated to receive up to $3.8 million in combined incentives if the Tulsa-based company meets or exceeds certain criteria, according to bankruptcy court records in Delaware. The incentives are designed to keep employees on board while SemGroup LP sells off assets or emerges from Chapter 11 protection.
Schwiering and Parsons both could gain up to $468,750 in additional pay under the SemGroup LP incentive plan. Schwiering heads up SemCrude oil operations, while Parsons leads the company's SemMaterials asphalt unit.
Last month, SemGroup Energy Partners' compensation committee approved bonus pay for five executives, including CEO Kevin Foxx, Schwiering and Parsons, according to a Securities and Exchange Commission filing.
Parsons' bonus pay for his SGLP asphalt work totaled $215,000, while Schwiering received an additional $120,000 for leading the public company's crude oil operations, according to reports.
The parent SemGroup filed for bankruptcy protection July 22 after admitting its traders lost $2.4 billion in failed oil futures transactions. The company also owes $2.5 billion to banks and other lenders and up to $1 billion to oil and gas producers who sold their product on credit, according to reports.
Hedge funds Manchester Securities and Alerian Capital Management gained SGLP board control when the parent company defaulted on a $150 million loan, and the public firm tried to find other, third-party customers for its storage and pipeline services.
SemGroup Energy Partners is not a debtor in the bankruptcy case, but it suffers from its own credit default and cash-flow challenges, records show. Schwiering has worked for SemGroup since 2000, the year that it was founded. Parsons joined SemGroup in 2006. Neither SemGroup LP or SGLP spokesmen could be reached for comment.
Pete Schwiering and Jerry Parsons were named among 10 SemGroup LP leaders slated to receive up to $3.8 million in combined incentives if the Tulsa-based company meets or exceeds certain criteria, according to bankruptcy court records in Delaware. The incentives are designed to keep employees on board while SemGroup LP sells off assets or emerges from Chapter 11 protection.
Schwiering and Parsons both could gain up to $468,750 in additional pay under the SemGroup LP incentive plan. Schwiering heads up SemCrude oil operations, while Parsons leads the company's SemMaterials asphalt unit.
Last month, SemGroup Energy Partners' compensation committee approved bonus pay for five executives, including CEO Kevin Foxx, Schwiering and Parsons, according to a Securities and Exchange Commission filing.
Parsons' bonus pay for his SGLP asphalt work totaled $215,000, while Schwiering received an additional $120,000 for leading the public company's crude oil operations, according to reports.
The parent SemGroup filed for bankruptcy protection July 22 after admitting its traders lost $2.4 billion in failed oil futures transactions. The company also owes $2.5 billion to banks and other lenders and up to $1 billion to oil and gas producers who sold their product on credit, according to reports.
Hedge funds Manchester Securities and Alerian Capital Management gained SGLP board control when the parent company defaulted on a $150 million loan, and the public firm tried to find other, third-party customers for its storage and pipeline services.
SemGroup Energy Partners is not a debtor in the bankruptcy case, but it suffers from its own credit default and cash-flow challenges, records show. Schwiering has worked for SemGroup since 2000, the year that it was founded. Parsons joined SemGroup in 2006. Neither SemGroup LP or SGLP spokesmen could be reached for comment.
15 Jan 2009
December Investor Survey finds Managment fees too High
When surveyed about what they think about fee levels and value for money offered by investment managers, investors believe that managment fees are too high.
Two surveys were conducted by bfinance in December, questioning institutional investors and asset managers from Europe, North America, and the Gulf Region.
"The results indicate that pension funds believe investment management fees are too high and need to come down, and a majority of managers seem to agree." David Vafai, CEO of bfinance commented.
With regards to hedge fund and fund of hedge fund fee levels, pension funds generally feel that all fees need to be reduced. 77% of respondents state their first priority is for lower base fees, followed by 52% who indicate their desire for performance fees to be reduced and for there to be an increase in hurdle rates. Also, 65% of investors say that these performance fees should be calculated over a four or five year period.
"Clearly, investors are still willing to pay performance fees to reward long-term skill but are no longer willing to pay active fees for beta or for 'luck'", commented Olivier Cassin, Managing Director, Research and Development for bfinance.
Hedge fund managers agree that fees would likely go down and indicate they expect the median level for base fees for FoHFs to decline 9% to 95bps and for the median level of performance fees for hedge funds to decline 25% to 13%.
Vafai concluded, "Although the study indicates disenchantment with the industry in general, and disenchantment with Fund of Hedge Funds and GTAA managers comes out particularly clearly, the study also rather paradoxically suggests that allocations to FoHFs, as well GTAA, Infrastructure, Real Estate and Private Equity FoFs are set to increase in the future. This confirms the results of our recent study on the impact of the crisis on pension fund asset allocation"
Two surveys were conducted by bfinance in December, questioning institutional investors and asset managers from Europe, North America, and the Gulf Region.
"The results indicate that pension funds believe investment management fees are too high and need to come down, and a majority of managers seem to agree." David Vafai, CEO of bfinance commented.
With regards to hedge fund and fund of hedge fund fee levels, pension funds generally feel that all fees need to be reduced. 77% of respondents state their first priority is for lower base fees, followed by 52% who indicate their desire for performance fees to be reduced and for there to be an increase in hurdle rates. Also, 65% of investors say that these performance fees should be calculated over a four or five year period.
"Clearly, investors are still willing to pay performance fees to reward long-term skill but are no longer willing to pay active fees for beta or for 'luck'", commented Olivier Cassin, Managing Director, Research and Development for bfinance.
Hedge fund managers agree that fees would likely go down and indicate they expect the median level for base fees for FoHFs to decline 9% to 95bps and for the median level of performance fees for hedge funds to decline 25% to 13%.
Vafai concluded, "Although the study indicates disenchantment with the industry in general, and disenchantment with Fund of Hedge Funds and GTAA managers comes out particularly clearly, the study also rather paradoxically suggests that allocations to FoHFs, as well GTAA, Infrastructure, Real Estate and Private Equity FoFs are set to increase in the future. This confirms the results of our recent study on the impact of the crisis on pension fund asset allocation"
14 Jan 2009
Alternative Investment Specialist Joins Canadian Hedge Fund Manager
Todd Groome is joining Diversified Global Asset Management (DGAM) as a Managing Director, effective February 1, 2009. Responsible for business development, Groome will also advise the investment team on macro investment themes and the global economic and policy environment.
"I am extremely pleased to join DGAM, a firm that is known for its expertise in hedge fund investing, its focus on business and operational integrity, and its leading edge thinking in a variety of investment areas, including in particular DGAM's strong commitment to building strategic relationships with its clients." Todd Groome said." Groome will be based out of DGAM's Toronto office.
With a wealth of experience in capital markets in both the public and private sectors, previously positioned as Managing Director and Head of the Financial Institutions Groups of Deutsche Bank and Credit Suisse in London, managing the European High Yield origination business for a period of time.
He also worked with Merrill Lynch and was a consultant to Hovde Capital Advisors, a hedge fund and merchant banking operation in Washington, focusing on financial institutions.
In December, 2008, Groome was named non-Executive Chairman of the Alternative Investment Management Association ("AIMA"), with effect from January 1, 2009.
George Main, CEO of DGAM, commented further, saying "I am delighted that Todd Groome will be joining the firm. Todd's deep experience, insights and stature in the global financial community will be invaluable assets as we take DGAM into our next growth phase."
"I am extremely pleased to join DGAM, a firm that is known for its expertise in hedge fund investing, its focus on business and operational integrity, and its leading edge thinking in a variety of investment areas, including in particular DGAM's strong commitment to building strategic relationships with its clients." Todd Groome said." Groome will be based out of DGAM's Toronto office.
With a wealth of experience in capital markets in both the public and private sectors, previously positioned as Managing Director and Head of the Financial Institutions Groups of Deutsche Bank and Credit Suisse in London, managing the European High Yield origination business for a period of time.
He also worked with Merrill Lynch and was a consultant to Hovde Capital Advisors, a hedge fund and merchant banking operation in Washington, focusing on financial institutions.
In December, 2008, Groome was named non-Executive Chairman of the Alternative Investment Management Association ("AIMA"), with effect from January 1, 2009.
George Main, CEO of DGAM, commented further, saying "I am delighted that Todd Groome will be joining the firm. Todd's deep experience, insights and stature in the global financial community will be invaluable assets as we take DGAM into our next growth phase."
13 Jan 2009
Hedge Fund Editor to Join NetSalonFX as Adviser
Chris Gillick, currently an associate editor with Trader Monthly and Dealmaker magazines, has agreed to join NetSalonFX as an adviser, principal/branch manager, and regulatory liaison, having just completed his NASD Series 30 exam.
As an editor for Trader Monthly and Dealmaker, he has covered the hedge fund industry, brokerages, private equity and investment banking. In 2008, he helped produce several widely followed industry lists such as the Trader Monthly 100, the Trader Monthly Top 30 Under 30, the Dealmaker Top 40 Under 40, and Dealmaker's Party Crashers, featuring the top women in private equity.
"I am happy to have Chris aboard," Says Lance A. Perry, CEO of NetSalonFX and its parent company, NetSalon Software Development Inc, "He brings great credibility as a financial professional with deep knowledge of the foreign exchange market, and as a journalist covering so many sectors of the financial world. He's going to be a great asset to our clients."
"I'm very much looking forward to working with the NetSalonFX team," says Gillick. "I'm excited to get my into the trading world while still pursuing my passion of journalism."
NetSalonFX's clients are all accredited investors, whom Gillick is accustomed to conversing with regularly in his coverage of the world of high finance. "I have had the privilege of meeting people in every corner of the world of finance, including introducing brokers in the foreign exchange market. Unfortunately not all IBs have the best intentions when selling their products. However, NetSalonFX has done a great job of screening out unqualified investors and building a community of traders who understand fully the great risks, and rewards, of the foreign exchange market."
As an editor for Trader Monthly and Dealmaker, he has covered the hedge fund industry, brokerages, private equity and investment banking. In 2008, he helped produce several widely followed industry lists such as the Trader Monthly 100, the Trader Monthly Top 30 Under 30, the Dealmaker Top 40 Under 40, and Dealmaker's Party Crashers, featuring the top women in private equity.
"I am happy to have Chris aboard," Says Lance A. Perry, CEO of NetSalonFX and its parent company, NetSalon Software Development Inc, "He brings great credibility as a financial professional with deep knowledge of the foreign exchange market, and as a journalist covering so many sectors of the financial world. He's going to be a great asset to our clients."
"I'm very much looking forward to working with the NetSalonFX team," says Gillick. "I'm excited to get my into the trading world while still pursuing my passion of journalism."
NetSalonFX's clients are all accredited investors, whom Gillick is accustomed to conversing with regularly in his coverage of the world of high finance. "I have had the privilege of meeting people in every corner of the world of finance, including introducing brokers in the foreign exchange market. Unfortunately not all IBs have the best intentions when selling their products. However, NetSalonFX has done a great job of screening out unqualified investors and building a community of traders who understand fully the great risks, and rewards, of the foreign exchange market."
Eze's Virtual Hotel Suites
Hedge fund manager, Eze Castle Integration has introduced a web version of its "hedge fund hotel" for small hedge funds with fewer than 10 people.
The company introduced the fully managed physical suite in November 2007 and the Eze says that the new offering has many of the same options now, over the Internet, using Citrix servers and thin clients. Users pay a monthly subscription fee for this hosted platform using their own desktops and basic networking.
"We act as a cloud," says Bob Guilbert, managing director. "As we add more applications to our back end data center, we'll enable clients to get things like CRM services, accounting services and anything else that might be necessary to run a back office operation. The benefit of this solution is they don't have to build out an IT infrastructure, they don't have to build out a data center. That makes it very easy for them to become operational."
The company introduced the fully managed physical suite in November 2007 and the Eze says that the new offering has many of the same options now, over the Internet, using Citrix servers and thin clients. Users pay a monthly subscription fee for this hosted platform using their own desktops and basic networking.
"We act as a cloud," says Bob Guilbert, managing director. "As we add more applications to our back end data center, we'll enable clients to get things like CRM services, accounting services and anything else that might be necessary to run a back office operation. The benefit of this solution is they don't have to build out an IT infrastructure, they don't have to build out a data center. That makes it very easy for them to become operational."
12 Jan 2009
Directory of Commodity Exchange Traded Funds Launched by Energy Hedge Fund Center
The Energy Hedge Fund Center, an online community focused on energy and environmental alternative investments, has launched a Directory of Commodity-focused Exchange Traded Funds that will appeal to ordinary investors. The Directory lists Exchange Traded Funds, Exchange Traded Notes and Exchange Traded Commodities in Excel format.
"Over the last several years there has also been an explosion of Exchange Traded instruments accessible by ordinary investors that are designed to provide exposure to commodities," reports Dr. Gary M. Vasey, Co-Principal of EHFC. "This directory is designed as a single source for investors interested in these vehicles."
"The financial crisis has driven more business to exchanges and ETFs. We expect more growth in this sector next year," said Peter Fusaro, Co-Principal, Energy Hedge Fund Center.
"Over the last several years there has also been an explosion of Exchange Traded instruments accessible by ordinary investors that are designed to provide exposure to commodities," reports Dr. Gary M. Vasey, Co-Principal of EHFC. "This directory is designed as a single source for investors interested in these vehicles."
"The financial crisis has driven more business to exchanges and ETFs. We expect more growth in this sector next year," said Peter Fusaro, Co-Principal, Energy Hedge Fund Center.
Debt Crisis for New York Times Hedge Fund Shareholders
Some analysts are saying that the mighty New York Times might be headed down the same path as the bankrupt Tribune Company, owner of the Chicago Tribune and Los Angeles Times.
Hedge fund shareholders, Harbinger Capital Partners Funds ("Harbinger") and Firebrand Partners ("Firebrand") own 19% of The New York Times Company, and the outlook does not look good. NYT is approximately $1 billion in debt, the result of its move to a new building on Eighth Avenue a couple of years ago.
Harbinger Capital Partners has grown to one of the 15 largest hedge funds, by assets, in America. Firebrand Partners is an operational activist firm that invests in publicly-traded companies whose brand equity represents significant upside relative to their market capitalization.
The New York Times Company includes The New York Times, the International Herald Tribune, The Boston Globe and 15 other daily newspapers.
Hedge fund shareholders, Harbinger Capital Partners Funds ("Harbinger") and Firebrand Partners ("Firebrand") own 19% of The New York Times Company, and the outlook does not look good. NYT is approximately $1 billion in debt, the result of its move to a new building on Eighth Avenue a couple of years ago.
Harbinger Capital Partners has grown to one of the 15 largest hedge funds, by assets, in America. Firebrand Partners is an operational activist firm that invests in publicly-traded companies whose brand equity represents significant upside relative to their market capitalization.
The New York Times Company includes The New York Times, the International Herald Tribune, The Boston Globe and 15 other daily newspapers.
Northern Arizona Land Eyed by Hedge Funds
Rolling Hills Ranches, LLC has has been in talks with a number of investors and hedge funds in recent weeks, engaging experts from the Master Planned Communities group of Kitchell Construction to provide planning oversight for further commercial development of the Rolling Hills Ranches community.
Von Jenson, General Manager, Rolling Hills Ranches, says, "If you're invested in stocks to retire on.... you'll definitely need a nice place to retire - Rolling Hills Ranches in northern Arizona is a great place to ease into a fresh lifestyle to enjoy yourself."
Kitchell is a diversified corporation providing general contracting, construction management and real estate development services to public and private sector clients from offices in Arizona, California and Nevada.
Rolling Hills Ranches is a developed ranch community located in northern Arizona. The ranch is comprised of lots suitable for home building or ranching and is ideal for those who wish to enjoy a rural lifestyle. Power and water are available and the community is bordered by paved roads on two sides.
Von Jenson, General Manager, Rolling Hills Ranches, says, "If you're invested in stocks to retire on.... you'll definitely need a nice place to retire - Rolling Hills Ranches in northern Arizona is a great place to ease into a fresh lifestyle to enjoy yourself."
Kitchell is a diversified corporation providing general contracting, construction management and real estate development services to public and private sector clients from offices in Arizona, California and Nevada.
Rolling Hills Ranches is a developed ranch community located in northern Arizona. The ranch is comprised of lots suitable for home building or ranching and is ideal for those who wish to enjoy a rural lifestyle. Power and water are available and the community is bordered by paved roads on two sides.
Subscribe to:
Posts (Atom)