Credit Suisse/Tremont Hedge Fund Index Estimated to Finish Up 3.61% In May

Hedge fund managers posted positive returns across all major strategies in May except for Managed Futures. Returns were driven by favorable investment conditions across equity, credit and commodities markets. India led the positive trend in Emerging Markets, with the Sensex index surging 17.3% within less than a minute of the announcement on May 18 that the Congress Party garnered a comfortable majority coalition in the general elections.

Industrial production numbers were up in many parts of Asia, with factories in Japan raising output by the largest monthly margin in nearly 60 years, and the Purchasing Manager’s Index (PMI) in China expanding for a third month to a seasonally adjusted 53.1 (a reading above 50 indicates an expansion). Some managers remained cautious, however, with the view that a switch from a government-led recovery to a consumer-led recovery may face hurdles such as the continuing rise of unemployment in many parts of the world, rising savings rates (particularly in the US), overhangs in vacant housing, as well as assorted weak macro data in Europe.

With spreads tightening and returns strong across the credit spectrum, relative value players such as Convertible Arbitrage and Fixed Income Arbitrage were among the best performers. With fixed income markets apparently unfazed by the General Motors bankruptcy, investment grade financials had the strongest performance, but investment grade industrials, utilities and high yield also had a solid month, as did leveraged loans.

Global Macro has continued to have the longest positive streak of all the strategies in the index for the 7th consecutive month, starting in November 2008. Managers found opportunities in currency trades, fixed income, commodities, as well as tactically trading equities. Managed Futures performance improved over April, but posted a fifth consecutive month of negative returns. Long/Short Equity Managers continued to have wide dispersions of returns, with some managers adding to their long exposures and tactically harvesting returns from the rallies, while others maintained their defensive positioning, citing an absence of fundamental drivers for a strong v-shaped recovery.

Interest Re-engaged in African and MENA Hedge Funds

International investors are coming back to the African and MENA region, hedge fund manager SilkInvest said in their latest equities update, "Few international investors are actually invested so far, however, it now looks like more investors are getting off the bench."

It was reported that roughly 40% of the volume of the Dubai stock exchange was on the back of international buyers, and after last week’s big advances in the MENA markets, the headlines in the local papers have the look & feel of optimism again, SilkInvest said.

Across the African continent, not all markets have gained back positive momentum. Nigeria has been one of the best performing markets lately, despite ending the week in negative numbers. Ghana and Kenya continue to struggle YTD, while South Africa, Mauritius, Egypt and Tunisia further added to their upside.

"We are happy to say that we have been well positioned in the right markets and sectors. More than ever is asset allocation and stock picking of key importance for successful investing in this region." Baldwin Berges, partner at SilkInvest, said. "There are still many undervalued opportunities at current low PE ratios which are unsustainably low both in the MENA and African regions. We therefore believe there is still considerable upside until the right valuation levels that reflect the solid earnings growth many companies enjoy have been reached."

BlackRock In Talks For Largest Global Hedge Fund Transaction On Record

BlackRock, Inc. confirmed that negotiations are ongoing with U.K.’s third-largest bank, Barclays Bank plc, about the potential purchase of Barclays Global Investors (BGI), including the iShares business.

“The discussions are not yet concluded and there are a number of significant open issues which could affect the nature and terms of any transaction,” Barclays said in a statement.

BlackRock's BGI buyout will break its own record in a hedge fund transaction, when in 2006 BlackRock took over Merrill Lynch's asset management business for $8.5 billion. The unconfirmed selling price is $12 billion to $13 billion. Other contenders for Barclays Global Investors include the Bank of New York Mellon and some Kuwaiti sovereign wealth funds, among others.

Hennessee Says Hedge Funds Post Best Month in 9 Years

“Hennessee Group research and discussions with hedge fund managers has lead us to believe that the 20 year secular bull market in bonds is over.” Charles Gradante, Co-Founder of hedge fund investor consultant, Hennessee Group LLC, said of the 9 year high point seen this month in hedge funds.

“We see a problem growing in the bond market. The Government is issuing more debt than it is buying back. This has to lead to rates increasing and equity PE ratios adjusting downward. Our contacts among hedge fund managers continue to buy gold and short Treasuries. However, Hennessee Group expects the Treasury and Fed to put a short squeeze on at an opportune time.”

The Hennessee Hedge Fund Index advanced +5.68% in May (+11.40% YTD), while the S&P 500 increased +5.31% (+1.76% YTD), the Dow Jones Industrial Average advanced +4.07% (-3.14% YTD), and the NASDAQ Composite Index advanced +3.32% (+12.52% YTD). Bonds also rose, as the Barclays Aggregate Bond Index advanced +0.73% (+1.33% YTD).

Managers have been maintaining a conservative investment strategy, which has caused them to lag in the recent market rally. In May, funds also benefited from long positions in energy and commodity-related positions, which performed strongly.

“With hedge funds up +5.68%, May was the best month for hedge funds since February 2000, when the index was up +6.83,” said Lee Hennessee , Managing Principal of Hennessee Group . “Gains were largely driven by arbitrage strategies. However, long/short equity managers, with reduced levels of exposure, also performed well, participating significantly in the market rally while maintaining hedges. With a market correction in the short term being a possibility, we feel that most hedge funds are positioned conservatively and will be able to quickly alter exposures to protect capital if the market experiences a correction.”

“May had the biggest one month run up in commodities in 35 years,” commented Charles Gradante. “It appears to us, from Hennessee Group research and manager conversations, to be speculative and led by commodity ETF demand, which exceeds "real" demand. Furthermore, margin requirements favor the speculators. Hedge funds are betting commodities will continue to rise with many long agriculture commodities, such as sugar and corn.”

Hedge Fund Prime Brokerage Provider Expands To Chicago

NorthPoint Trading Partners, LLC has opened a new office in Chicago, IL., with 12 year industry veteran, Michael Ferro, as head. Ferro has held positions at Genworth Financial, Knight Capital Markets, and X-Change Financial Access. He is experienced in both the trading and operations aspects of the buy and sell side, the company said.

“As we continue to expand our presence nationwide, we are very fortunate to have someone with Michael's talent and experience join our team,” says Douglas Nelson, Chief Executive Officer of NorthPoint Trading Partners, LLC. Atlanta based NorthPoint opened also opened an office in Connecticut earlier in the year.

NorthPoint Trading Partners, LLC is an institutional brokerage and fund services company working with small and medium sized hedge funds.

Bowne and HedgeOp Join Forces to Deliver Compliance Sopftware

Bowne & Co., Inc. has signed an alliance with HedgeOp Compliance to offer two new compliance solutions for hedge funds and other registered investment advisers.

The first of the hedge fund tools, 'Bowne ComplianceTrak', is an integrated compliance tracking, monitoring and reporting system specifically designed for hedge fund professionals, enabling both SEC-registered and unregistered hedge funds to build a solid foundation for their compliance programs and quickly identify potential compliance issues.

The second tool, 'Bowne Form SH Generator', is a tool for hedge funds meet new Securities and Exchange Commission (SEC) reporting requirements for short sales, reducing the amount of time spent on these tasks by 75% or more. "Bowne Form SH Generator is a huge time-saver for hedge funds and other institutional investment managers," said Bill Penders, President of Bowne. "It takes a three or four hour process, and completes it -- with great accuracy -- in a matter of seconds."

Bowne and HedgeOp Compliance, which entered into a strategic alliance in May, plan to enhance the capabilities of their compliance offerings for hedge funds and other registered investment advisers, and future versions will assist clients with other filing requirements.

MFA Commits to Reduce Systemic Risk in OTC's

Global alternative investment industry voice, The Managed Funds Association (MFA) announced that it is joining the major derivatives dealers (the Major Dealers) in presenting a letter to global industry regulators. The letter establishes new commitments addressing key concerns raised by global legislators such as the G20, European Commission and the U.S. Department of Treasury.

MFA first joined the Major Dealers in presenting a letter to global regulators detailing operational targets and other industry commitments in March 2008.

Today’s letter outlines a firm commitment towards strengthening the over-the-counter (OTC) derivatives infrastructure under the auspices of the OMG and its constituents and partners, including the newly formed Board Oversight Committee (IBOC) of the International Swaps and Derivatives Association (ISDA). MFA is dedicated to continuing its collaboration with global regulators, the Major Dealers, buy-side institutions and service providers to reduce risk and improve market infrastructure and practices across OTC derivatives and other financial products.

Richard H. Baker, MFA President and CEO, said, “ MFA , on behalf of the alternative investment industry, is committed to proactively developing and advancing these critical commitments for reducing counterparty and systemic risks and improving operational efficiency in OTC derivatives processing. MFA fully endorses the collaborative efforts with global regulators to support commercially viable centralized clearing platforms, to universally report all OTC derivatives trades and to promote sound business practices. MFA considers today’s letter to be an important step forward for OTC derivatives markets and looks forward to continuing our participation in the design of future steps.”

MFA and its co-signatories are committed to implementing changes to risk management, processing and disclosure that will significantly transform the risk profile of these important financial markets. The OTC derivatives markets provide important flexibility in terms of products and execution and will benefit from a strengthened infrastructure.

Commitments to reduce systemic risk in the OTC derivatives markets include:

Implementing data repositories for non-cleared transactions in the OTC derivatives markets to ensure appropriate transparency and disclosure, and to assist global supervisors with oversight and surveillance activities.

Clearing for OTC standardized derivative products.

Enabling customer access to clearing through either direct access as a clearing member or via indirect access, including the benefits of initial margin segregation and position portability.

Delivering robust collateral and margining process, including portfolio reconciliations, metrics on position and market value breaks, and appropriate dispute resolution mechanics.

Updating industry governance to be more inclusive of buy-side participants through collaborative partnerships among the Major Dealers, MFA and other trade associations.
Continuing to drive improvement in industry infrastructure, as well as engage and partner with supervisors, globally, to expand upon the substantial improvements that have developed since 2005.

MFA members are professionals in hedge funds, funds of funds and managed futures funds, as well as industry service providers. MFA is headquartered in Washington , D.C. , with an office in New York.

Hedge Fund Expert to Run ATC's Cayman Operations

Ali Mudeen has joined hedge fund provider ATC Group as managing director of its Cayman Islands operations.

Mudeen will oversee and build the firm’s Private Clients and Corporate Services practices in the region, as well as work closely at a group level with ATC’s hegde fund administration practice.

Mudeen brings over 20 years of international experience to ATC, having worked in the US, South America and the Caribbean in banking, legal and trust services. He joins ATC from Caledonian Global, where he was a director and shareholder and had overall responsibility for marketing and business and strategic development.

“Ali’s industry expertise and leadership make him an invaluable addition to the ATC executive team." Robert Govaerts, ATC’s chairman, said, "His broad knowledge base and commitment to client service will significantly enhance ATC’s leadership position in the industry.”

“ATC is an impressive financial services company with a clear vision for the future, having enjoyed strong growth even in these unprecedented economic conditions,” Mudeen said. “I am delighted to join a company which has such a strong focus on client services and on its people.”

Serving international business, private clients, capital markets and alternative investment funds, ATC was established in 1893. ATC employs over 350 professionals in 17 offices across Europe, the Caribbean and the Asia Pacific region.

StarInvest Acquires Hedge Fund Provider EXX

Stock transfer agency, StarInvest Group, Inc (STIV) has completed the acquisition of a privately held hedge fund provider EXX.COM.

“This acquisition will unleash the value of STIV management, and relationships in our effort to grow revenues and increase the value of our company for its shareholders. In line with our recent acquisition of My Transfer Agent, LLC (‘MTA’), EXX will offer a recurring revenue model by servicing brokerage firms, hedge funds, trading firms, or individuals on a single platform that interlinks all current trading systems and clearing houses thus yeilding the best execution services for all of its clients.”

EXX is a specialized in providing connectivity and software solutions to small and medium sized stock brokerage, arbitrage, investment banking firms, and hedge funds in major American markets. The company's main business is customizing proprietary platforms so from one program STP is enabled across all the financial networks.

Spice Finance and 3 Degrees Launches Singapore/India Special Situations Private Equity Fund

Spice Finance, the financial services arm of the $1.5 billion B. K. Modi Group, has entered into a first-of-its-kind strategic joint venture with Singapore-based 3 Degrees Asset Management to launch the Spice 3 Degrees Special Opportunities Fund.

Chaired by turnaround management specialist, Dr Divya Modi, Executive Director of Spice Finance, the fund will hold a first closing of $21 million comprised of commitments from Spice and 3 Degrees. A final closing will be held once third party commitments reach $100 million.

“Spice Finance will invest Rs. 500 crore ($100 million) in distressed assets and special situations, as well as other niche businesses such as remittances and over-the-counter exchanges," said Modi. "Our strategic alliance with 3 Degrees is the first significant step in our goal to achieve a $1 billion valuation for Spice Finance within the next few years,”

The new fund will invest in distressed assets and special situations spanning India and Southeast Asia. “Asia’s distressed asset market is highly inefficient, very large and growing rapidly,” said Moe Ibrahim, Founder of distressed specialist 3 Degrees. “With over $2 trillion in opportunities and only a handful of sophisticated players, the Asian distressed asset market epitomizes the inefficiencies we seek to exploit as a firm. Although the market is enormous, competition is negligible due to the relationship intensive nature of the opportunity set.”

The fund will target companies whose shareholders are struggling or where the debt holders are foreclosing. “We will focus on companies with excellent long-term growth prospects, but where short-term liquidity and management issues have caused the company to fail. Spice has a 30 years rich history of using technology and training in turning around troubled companies. We have the business acumen and resources to make companies successful,” said Modi.

Conyers Hosts Launch Function in Brazil

Over 100 of São Paulo’s senior legal and business executives attended a launch function held by offshore financial law firm Conyers Dill & Pearman, in celebration of the formation of their new Brazil partnership.

The event was held on at the newly re-opened Casa Fasano Jardins on Haddock Lobo.

While addressing the audience Conyers Chairman, John Collis, spoke of the firm’s international growth. "Over the past decade, Conyers has seen a marked increase in the use of offshore structures by South and Latin American clients, as well as clients seeking to do business in those regions. The decision to open in São Paulo is part of the firm’s strategy of positioning itself in the world’s leading financial centres in order to provide responsive, timely and thorough advice to clients."

“We are pleased to have the regulatory approval to move ahead with the São Paulo office, which will facilitate even greater personal contact with our clients.”
Alan Dickson, managing partner of Conyers’ São Paulo office, said.

The new São Paulo office is located on Rua Jeronimo Da Veiga, 384 and will provide general corporate, company and commercial advice, with particular emphasis on investment funds, public company listings, initial public offerings and holding company incorporations providing clients with direct access to the jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius.

Larger/Younger Hedge Funds Reported Better Returns for 2008: Study

While previous research has confirmed the widely held belief that emerging funds tend to outperform older and larger funds, hedge fund performance in 2008 saw a partial reversal of that trend, according to PerTrac Financial Solutions in its third annual study that examines hedge fund returns, volatility and risk, based on age and size.

“Last year was a difficult one for hedge funds of all ages and sizes, but once again we saw younger funds outperforming older ones, confirming our findings from earlier studies,” said Meredith Jones, managing director at PerTrac. “However, when it comes to hedge fund performance as a function of fund size, we saw a reversal of the trend established from 1996 through 2007. During 2008, funds with the least assets actually performed the worst, while larger funds posted better returns.”

As in past studies, PerTrac conducted two different analyses: one based on a fund’s asset size, and the other based on a fund’s age. Monthly hedge fund returns were compiled from leading hedge fund databases and analyzed using the proprietary PerTrac Analytical Platform software. In each analysis, funds were re-categorized into one of three assets under management (AUM) size groups: up to $100 million; $100 million to $500 million; and over $500 million. The funds were also categorized into one of three age groups: up to 2 years; 2 to 4 years; and over 4 years. The mean fund return was calculated for each group in each month, creating three size-based monthly indexes and three age-based monthly indexes. Various risk and return statistics were calculated on the returns of each index to evaluate historical performance, and Monte Carlo simulations were run on each index to indicate probable ranges of future returns and drawdowns.

Small Hedge Funds Underperformed Larger Funds for the First Time Since Beginning of Study Data.

The study reveals that small funds averaged a loss of -17.03% in 2008, while medium-sized and large funds fared better, with average losses of -16.04% and -14.10% for the year, respectively. However, over the full history of the indexes, from 1996 through 2008, small funds performed best, with an annualized return of 13.05% versus 9.99% for medium-sized funds and 9.28% for large funds. Along with its stronger returns, the small fund index also showed greater volatility over the 13-year period with an annualized standard deviation of 6.96% versus just 5.92% and 6.05% for the medium-sized and large fund indexes, respectively.

“There are several possible reasons why small funds underperformed their larger peers for the first time ever in 2008. Due to losses across the board, hedge funds experienced heavy redemption requests last year. Larger funds generally have more cash on hand and greater access to lines of credit than small funds, better enabling them to handle redemption requests without compromising their portfolios’ performance,” noted Jones. “The recent market crash also appears to have prompted a ‘flight to quality’ among investors, with surveys indicating that hedge fund investors have become more interested in larger, more ‘institutional’ funds. So it’s likely that smaller funds had to deal with relatively greater redemptions than did their larger peers. We also noted a larger differential in the number of large managers reporting in both the prior and current studies, with a larger percentage of small managers participating in both updates. As a result, there is heavier survivor bias in the large fund group. Other possible reasons include infrastructure considerations, greater reliance on beleaguered prime brokers, and larger redemptions from poor performers pushing more managers into lower asset bands.”

“However, one year does not make a trend,” concluded Jones. “It will be interesting to see whether the small funds’ underperformance in 2008 proves to be a short-term exception to the rule or the start of an official trend.”

Young Funds Continued to Outperform Older Funds in 2008

An examination of the relationship between fund age and performance revealed no surprises for 2008. Hedge funds with the shortest track record continued their trend of superior performance last year as the young fund index lost -11.31% for the year compared to much larger losses of -19.46% and -17.85% by the mid-age and older fund indexes, respectively. Over the full history of the indexes from 1996 through 2008, young funds have generated an annualized return of 15.74% while mid-age and older funds have trailed with annualized returns of 11.48% and 10.12%, respectively. Young funds have also fared best from a risk perspective over the long term; the young fund index has produced an annualized standard deviation of just 6.47% over the 13-year period while the mid-age and older fund indexes have proved more volatile with annualized standard deviations of 7.11% and 6.72%, respectively.

The new study is the latest in a growing body of research produced by PerTrac Financial Solutions for the investment community. The company is devoted to advancing the study of hedge funds and other investments by publishing original research as well as providing free access to their PerTrac Analytical Platform software to academic professors, students, and selected researchers through the PerTrac Educational Use Program.

Editing by Alex Akesson

For HedgeCo.Net
Email: alex@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!

Future of Hedge Funds Highlighted at the 6th Annual SS&C Hedge Fund Symposium

More than 85 hedge fund professionals last week attended the 6th Annual Hedge Fund Symposium hosted by financial software provider SS&C Technologies in London.

The panel was moderated by Richard Greensted, Editor of Script Issue, and participants included Simon Hookway, CEO of MSS Capital and Managing Partner of MAG capital; Jon Mills, Partner at KPMG; Duncan Crawford, Head of Capital Introductions, Prime Brokerage at Newedge Group; Peter Astleford, Partner at Dechert; and Joe Seet, Senior Partner at Sigma Partnership.

"The proposed directive on alternative investment funds was prepared in too great a hurry and is too ambitious." Peter Astleford, Partner at Dechert, advised on the topic of regulation, "However there are some useful parts that will help restore confidence to the industry and improve marketing opportunities in Continental Europe."

On a more positive note for the industry, Jon Mills, Partner at KPMG, commented, "There really are plenty of reasons for the hedge fund industry to be optimistic in 2009 and beyond - we are seeing improving performance during Q1, institutional investors continuing to allocate assets to alternative investments, a healthy pipeline of new fund launches and recognition from regulatory bodies that hedge funds were not the cause of the financial crisis."

"Although the alternatives industry as well as the global financial services industry as a whole is going through arguably the biggest change it has seen, there are still many challenges and opportunities for the remaining participants,” host of the event Edwin Parker, Business Development Manager of SS&C Funds Services EMEA, an independent Fund Administration service provider, explained. “Alternative investments will continue to remain a pivotal part of any investment portfolio diversification. Having the right service provider and technology partner helps ensure that managers stay ahead of the game. As one of the largest independent administrators globally, SS&C Fund Services delivers big firm resources with small firm responsiveness."

AIMA To Mobilise Hedge Fund Industry On EC Directive

The Alternative Investment Management Association (AIMA) – the global hedge fund industry association – has announced plans to mobilise the world’s hedge fund industry on the European Commission’s draft directive for Alternative Investment Fund Managers.

“There are provisions in this directive with potentially serious consequences for managers, investors, service providers and advisers internationally." Andrew Baker, AIMA CEO, said, "As the global trade body for the industry it is right therefore that AIMA takes the lead in mobilising resources in order to secure the best possible outcome for the industry on the directive."

"The feedback we’re getting from our members, who manage more than 75% of hedge fund industry assets globally, is that the draft directive has created enormous confusion. Because of the lack of proper consultation the directive presumes a structure for the industry which bears little relationship to reality. Implementation in its current form could prove to be unworkable. It also appears to be in conflict with much of existing EC financial services legislation." Baker said.

"We will therefore call for urgent effort to be devoted to re-drafting this directive." Baker continued, "To achieve this, AIMA will be announcing a series of initiatives to mobilise the industry. We will not oppose everything in the directive; some of the provisions, such as manager authorisation and registration, are already supported by us and measures which increase transparency to assist the authorities in the understanding of systemic risk issues are to be welcomed."

"We want to work with the Commission, EU governments and the European Parliament on this. We are not opposed to the directive per se, we just want the final directive to be practical and realistic.” Baker concluded.

Europe's Top 50 Hedge Fund Firms

Alpha Magazine unveiled the 2009 Europe Hedge Fund top 50, showing that that Europe was not immune to investor angst over hedge funds. A wave of investor withdrawals shapes the magazine's annual ranking of the 50 biggest European single-manager hedge fund firms, as total assets fell to $285 billion as of January 1, 2009, from $405 billion a year earlier, a 30% drop.

Europe's hedge fund business may be looking at an encouraging longer-term picture, however. The region boasts five of the world's 20 biggest hedge fund firms -- led by two London-based powerhouses, Brevan Howard Asset Management and Man Investments.

Brevan Howard's total assets surged from $21 billion at the end of 2007 to $26.8 billion when this year began, elevating the firm from third to first in Alpha's 2009 Europe Hedge Fund 50. Man Investments had a similarly strong year; its overall assets grew from $20.9 billion to $24.4 billion, lifting the firm two rungs to second place.

The two top European hedge fund firms in last year's ranking have been taken down a few notches. Barclays Global Investors falls from No. 1 to No. 3, and GLG Partners drops from No. 2 to No. 8; the firms saw their assets drop, respectively, 35 percent and 52 percent.

Alpha's Europe Hedge Fund Top 5

Rank Firm Total Capital ($ millions)
1 Brevan Howard Asset Management $26,840
2 Man Investments 24,400
3 Barclays Global Investors 17,000
4 BlueBay Asset Management 16,700
5 Bluecrest Capital Management 13,273

Click on Alpha's 2009 Europe Hedge Fund 50 to view the complete rankings of all 50 firms.

How the Ranking Was Compiled

For Alpha's 2009 Europe Hedge Fund 50, data was gathered through questionnaires completed by hedge fund managers, supplemented by extensive Alpha staff research. We provide each manager's total assets under management as of January 1, 2009, unless otherwise indicated. Where possible, we also show assets at the individual fund level, with 2008 net returns, for the five biggest funds run by a firm.

Barclay Hedge Fund Rankings Rate Tranen #1 in Fixed Income Asset Backed Lending

British Virgin Islands based hedge fund manager Tranen Capital took the lead in the Fixed Income - Asset-Backed Lending category for March 2009 with a return of 2.49%.

In addition to the March performance, the fund, 'Tranen Capital Alternative Investment Fund Ltd.' posted a YTD (through April) change in NAV of 11.5%.

“Investors are keenly aware of the dismal and unstable returns from the major financial markets. They are demanding alternatives and absolute returns. The Barclay ranking certainly highlights the strategy’s excellent returns but more importantly, it demonstrates that the funds’ performance is non-correlated to financial markets. The Fund’s NAV has increased 27% since July 2008, which has been independently determined by our actuaries, Data Life, and confirmed by our Administrator Commonwealth Fund Services. Additionally, we have also recently delivered our first independent audit to investors, “says Kenneth Landgaard, Portfolio Manager.

Tranen Capital’s strategy is to trade life insurance policies in the Life Markets Space, more commonly referred to as the Life Settlements Market. The Life Markets Space enables seniors to sell their life insurance contracts for more than the cash surrender value than they would otherwise receive from the Insurance Company. The credit crisis has helped create more supply as Seniors (65 or older) are looking for other ways to generate cash. In fact, the life settlements market is expected to grow to over $160 billion over the next several years, according to a Sanford Bernstein report.

Arthur Bowen, Director and in-house counsel explained, “The growth in the life settlement market confirms the validity of this asset class and we continue to see great interest from institutional investors. These sophisticated investors understand the strategy and they appreciate that Tranen has gone to great lengths to provide an institutional quality product with a great level of transparency.”

Tranen Capital offers qualified offshore investors access to the Tranen Capital Alternative Investment Fund Ltd. with a 1% acquisition fee and a 20% incentive fee. The minimum investment is $100k USD.

MENA Equity Fund Launch

Hedge fund manager, Majid Al Futtaim Asset Management, is launching its first Middle East and North Africa (MENA) equity fund, the Luxembourg domiciled 'Elite MENA Equity Fund'.

Investors can invest alongside the family office of Majid Al Futtaim and gain access to the services of the portfolio management team responsible for the MENA equity investments. The Majid Al Futtaim family office has seeded the fund with Dh550 million ($150 million), making it one of the largest MENA equity funds available to investors.

"Investors deserve to have the best home for their money in both turbulent and stable investment environments." Iyad Malas, Chief Executive, Majid Al Futtaim Asset Management, said, "By opening the doors to the services of the portfolio management team responsible for Majid Al Futtaim's family office, we offer investors a tried and tested place to invest. The Elite MENA Equity Fund offers investors an opportunity to invest with a team whose performance speaks for itself."

The new ‘long-only' open-ended fund aims to achieve long-term asset growth and capital preservation through a ‘Risk-Managed Growth' approach to MENA investments.

The Change Imperative for Hedge Fund Reporting: Webinar

Principal at Rothstein Kass, Charles F. Plaveczky will be speaking at a webinar for hedge fund managers interested in meeting the growing demands for increased reporting transparency and control, according to fund manager and host Confluence.

“As the April 30 hedge fund financial reporting cycle clearly demonstrated, prevailing error-prone manual processes for hedge fund reporting are far too brittle and inflexible—and they lack the scalability to meet increasingly complex reporting requirements,” said Plaveczky. “The pressure for greater flexibility and control will only increase with the adoption of additional reporting rules, and challenge current processes even more.”

The webinar entitled “The Change Imperative for Hedge Fund Reporting” and will take place on Friday, May 29 at 11:00 am EDT.

Kirk Botula, Chief Operating Officer of Confluence, will also provide information on new hedge fund reporting trends and challenges, discussing processes to maximize accuracy, efficiency and control in the reporting process as hedge funds deal with a variety of reporting requirements—such as FAS 157 fair market reporting, FAS 161 disclosures about derivative instruments and hedging activities, and how new International Financial Accounting Standards from IASB will challenge prevailing back-office reporting processes.

“Multiple stakeholders are demanding greater reporting diligence from hedge funds and their administrators. Regulators are clearly focused on greater transparency, investors are demanding additional disclosures and more frequent reporting, and accounting and auditor firms are mandating improved process control and documentation,” said Botula. “Hedge funds must consider how technology and automation can improve their reporting processes in order to provide the speed, control and flexibility needed to weather a new era of reporting transparency and control.”

Hedge fund companies and their fund administration service providers can register for this complimentary webinar at www.confluence.com/GETCONTROL. Individuals who register will also receive Confluence’s new whitepaper, Hedge Fund Reporting: The Change Imperative.

S&P Research Arm Bought By Hedge Fund Provider

Hedge fund research provider, Guidepoint Global, LLC, has acquired tech and media company, Vista Research, Inc. from Standard & Poor’s.

“In the current economic climate, investors and business decision makers are increasingly seeking on-demand knowledge and insights through expert networks,” said Albert Sebag, CEO of Guidepoint Global. “Guidepoint’s acquisition of Vista, a pioneer in the expert network field, gives our clients access to one of the most comprehensive primary research networks in the world, delivered with the single-minded focus on customized service that they have come to expect.”

Guidepoint has over 130,000 global experts and a compliance framework supported by a proprietary IT platform, as well as one of the most advanced online client interfaces.

With the acquisition of Vista Research, Guidepoint Global said it will expand its team of client service professionals and recruiters to support a client base that includes many of the world’s leading private equity firms, mutual funds, hedge funds, strategy consultancies and multinational companies.

Tel Aviv Conference to Serve as International Economic Collaboration Platform

West Palm Beach (HedgeCo.net) - The organizing committee of The International Organization of Securities Commissions (IOSCO) is to host more than 500 of the leading securities regulators and economic experts from more than 65 countries at this year's conference in Tel Aviv, Israel, June 8-11.

"We are honored to host the world's leading regulatory experts, from Albania to Zambia, in Israel for this important event," said Spokeswoman Yael Almog. "Israel 's sophisticated local market regulation and high levels of investor protection make it a great setting for this historical event. We believe that IOSCO 2009 will not only help restore strength in the world’s regulatory system, but more importantly, it will foster renewed confidence among the international investment community."

Conference participants include SEC Chairwoman Mary Schapiro, Goldman Sachs CEO Lloyd Blankfein, S&P President Deven Sharma and UK FSA Chairman Lord Adair Turner and Mario Draghi, Governor of Banca d’talia and Chairman of the Financial Stability Forum.

The conference provides the opportunity, IOSCO said, for regulators from both emerging and developed markets to address the global effects of the financial crisis on the financial and securities system and the stability of the world economy. In addition, it will emphasize the role emerging markets will play in the global recovery process and will outline the need and importance for new partnerships between developed and developing markets.

The conference will be hosted by the Israel Securities Authority (ISA) and the Tel Aviv Stock Exchange (TASE).

Stanford Completes Second Phase of Hedge Fund Case Study

The second phase of a hedge fund business model case study has been finalized by the Stanford University’s Graduate School of Business. GlobeOp is the first hedge fund administrator to be featured in a case study developed for classroom use by Stanford.

‘GlobeOp: Structuring for Hedge Fund Growth, 2003-2008’ follows the initial study that documented GlobeOp’s foundation, strategic decisions and activities during the first three years following its foundation in 2000.

The new chapter documents GlobeOp’s five-year growth from a young business with 400 employees and 82 hedge fund clients, representing more than $26 billion in assets under administration (AuA), to a publicly-listed company with a global service network on three continents. Today GlobeOp employs 1,600 people in 10 facilities worldwide and serves more than 180 clients representing $91 billion in AuA.

"The five-year period discussed in the new chapter details strategic milestones for GlobeOp that were also important learning experiences for us as entrepreneurs and as a service provider." Hans Hufschmid, CEO of GlobeOp, said, "As it concludes at the beginning of a year of unprecedented turmoil for our clients and financial markets in general, we hope this latest installment will provide students with useful insight into the vision, nimbleness and innovation needed as market opportunities and challenges develop. With new market fundamentals now emerging, we believe the focus on client service and transparency detailed in the case study will position us well for the future."

Professor Glenn R. Carroll, who led the study, noted that, "This second GlobeOp case provides an exceptional opportunity to see how an entrepreneurial start-up in financial services was transformed into a mature global organization without losing its technological advantage. We are very grateful to GlobeOp for allowing us access and know that students everywhere will gain from studying the case.”

The case study was supervised by Professor Carroll, Laurence W. Lane professor of Organizations in the Graduate School of Business and (by courtesy) professor of Sociology in the School of Humanities and Sciences, Stanford University; and written by Victoria Chang, a Graduate School of Business researcher.

This latest case study segment documents how GlobeOp established a significant presence in India to provide clients with 24/5 services through scale and time zone optimization; hired a chief operating officer to create structured people and process management; and became a publicly-listed company. It also discusses the development of GlobeOp’s focus on people, processes and technology and the creation of new revenue streams through unbundled services in response to new market opportunities.

The study can be accessed on the on the GlobeOp website, it will be distributed by Harvard Business School Publishing.

Hedge Fund Performance for April 2009

In a preliminary hedge fund performance report for April 2009 and asset flows through March, morningstar reported the largest one month-return since January 2006—bringing hedge fund returns into positive territory for 2009.

"Over the last two months, the bulls have dominated the markets, and stories of green shoots in the economy colored the financial media. The rally was led by higher-risk asset classes, including small-cap, financial sector, and emerging market stocks, as well as high-yield bonds and leveraged loans. Many hedge fund managers weren't confident in the sustainability of the rally, and invested with a more conservative market exposure," said Nadia Papagiannis, Morningstar hedge fund analyst.

U.S. convertible bonds benefited from the trend toward higher-risk, low-credit-quality investments. According to the Merrill Lynch All U.S. Convertibles Index, these securities enjoyed their best month since 1987, with speculative-grade convertibles returning more than double the gains of investment-grade securities. The Morningstar Convertible Arbitrage Hedge Fund Index, the best-performing Morningstar hedge fund index this year, rose 5.1% in April and 12.5% year to date.

Also in the lower-quality field, the Morningstar Distressed Securities Hedge Fund Index increased 2.1% in April, the largest since the beginning of the credit crunch in mid 2007.

In emerging market equities, Eastern European countries produced the best returns in April, although this region is still recovering from its early 2009 nosedive. The only losers in April were the Morningstar Global Trend and Global Non-Trend Hedge Fund Indexes, which dropped 1.7% and 0.5% respectively.

According to Morningstar’s database, hedge funds overall continued to show a decline in outflows. In January, investors withdrew more than $29 billion from hedge funds, but February outflows totaled less than $6 billion, while March's preliminary figure showed an even lower amount, at $3.6 billion. Despite the overall March trend of outflows, developed Asia equity hedge funds actually had net inflows of $4.1 billion in March, and investors were rewarded. The Morningstar MSCI Japan Hedge Fund Index increased 2.5% in April, while the broader Morningstar Developed Asia Equity Hedge Fund Index jumped 5.2%.

Hedge Fund Industry Expert Hired to run Distressed Mortgage Securities Tool

LoanInsights, a San Francisco-based financial services and technology company, has hired James Sias as Director of Business Development. Sias will be responsible for working with banks, hedge funds and US government entities to help them leverage the newly launched LoanInsights SMART (Secured Mortgage Asset Resolution Tool).

The new SMART platform enables financial institutions, investors and the government to value and manage optimally the $1 trillion-plus in so-called “toxic assets” that are a primary cause of the nation’s severe economic downturn and continue to be a major drag on the hoped for recovery.

"James’ real-world experience will be critical to our efforts in reaching out to hedge funds, banks and other investors to demonstrate how our new tools can help them effectively and profitably manage their distressed mortgage assets,” said Jonathan Strike, President and Co-Founder of LoanInsights. “In addition, with his deep knowledge of the mortgage industry and underlying process, James clearly understands what the various players need to do now to solve the toxic assets problem and help get credit flowing again."

The LoanInsights team has been working for the past eight months with investor groups, including hedge funds and private investors, to test the SMART process and technology platform in beta mode. During this time, the investors realized an unleveraged annual return on equity in excess of 30% on those portfolios analyzed and liquidated through the platform. In addition, the homeowners who were part of the program refinanced into lower, fixed-rate mortgages, and in some cases actually reduced their overall mortgage balances.

Hedge Funds & ‘Open Source Intelligence’

Hedge funds, private equity firms are using “political intelligence” to monitor tax reform, SEC registration, TARP, TALF and PPIPs, according to the OSINT Group, a boutique advisory firm based in Washington specializing in “open source intelligence” (OSINT).

The US Federal Reserve, the Treasury Department, the SEC and Congress are all playing a major role in rapidly evolving monetary policy and regulatory change across the international financial marketplace, OINST said. Those institutions, along with the IMF and World Bank, make Washington DC the financial centre for policy decisions and breaking financial news.

“To understand what financial and political leaders are doing today and planning for tomorrow, institutional investors need to do more than monitor news and data services. They need to know more. They need answers to questions from a consistently reliable source of insight into the world of politics and policy,” said Michael Bagley, a principal with the OSINT Group.

“When you need to understand policy and politics accurately and consistently, we take the guesswork out of the analysis. Top corporations and foreign governments set a very high standard for the outside counsel they retain for managing risk and unearthing new opportunities,” Bagley said. “We consult with a group of experts from the ranks of lobbying, academia, industry, journalism and law who are skilled in every major area of policy and politics. Our 'political intelligence' unit is built on a single powerful idea: to provide institutional investors with accurate, actionable and timely information created by the currents of political forces and regulatory decisions.”

The group was established to assist government and commercial sector clients in the energy and financial industries with unique “open source” intelligence collection and delivery. In addition to technology used by the US Intelligence Community, the firm uses its network of relationships and personal connections in Washington to gather “political intelligence” for clients who need to better understand how the US Government will influence the international markets with new financial-sector regulation and legislation.

Hedge Funds & The Sarbanes-Oxley Act

Leading alternative investment firms are adopting best practices for their funds with an eye to the Sarbanes-Oxley act*, hedge fund provider, TKS Solutions said in an announcement, also launching a new system specifically designed for hedge funds.

*The act was created in 2002 as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. A new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting and disciplining accounting firms in their roles as auditors of public companies.

"New regulations are not the only issue funds have to deal with" says Ron Kashden, president of TKS Solutions. "With the tight capital market many investors are demanding more flexibility in their fee structure and liquidity terms. The days of complacent investors willing to lock in their capital for years at a time may be over. Funds that have always allowed for annual and even quarterly redemptions are finding that they have to offer monthly liquidity to attract new capital. While this makes sense from a business stand-point, it introduces accounting complexities that are wreaking havoc in the back office. Simple tasks, such as accruing management fees, can quickly become an arduous calculation when funds that charge quarterly allow redemptions on a monthly basis.

Adding to the complexity, TKS said, is that fund administrators are reporting new fee structures with innovative loss-recovery provisions. While this adds pressure for portfolio performance, it also provides the fund with a revenue source to live off of in bad times. Managing these intricacies necessitates accounting tools and practices that funds may not have required historically. Yesterday’s spreadsheets are giving way to sophisticated software packages specifically tailored for the back-office needs.

From an operational perspective, the hedge fund industry is finally growing up, TKS said. Their ad-hoc practices, more appropriate to a "mom and pop" shop than a sophisticated financial enterprise, are being replaced with a regulatory best practices framework and the expert systems used by their institutional counter parts.

TKS Solutions works with partners worldwide to serve its customer base of leading hedge funds, fund of funds, private equity firms, administrators and management companies, ranging from $50 million up to $20 billion under management.

FRSGlobal to Work With Hedge Funds On New Regulations

Hedge fund risk and regulatory compliance solutions provider, FRSGlobal, is preparing to work with the hedge fund industry to help it comply with the new wave of global regulations expected to be in place later this year.

Compliance experts within FRSGlobal's Centre of Risk & Regulatory Excellence (CoR2E) are actively monitoring the discussions taking place at the various U.S. regulatory agencies and are ready to advise hedge funds on the best ways to automate their reporting processes as soon as any new legislation is enacted.

"U.S. regulators are demanding more oversight of the hedge fund industry which means that registration is imminent, "Richard Ferrari, FRS Vice President, commented, "Hedge funds are going to be subject to far greater scrutiny than ever before. Whether it is increased transparency around the trading and valuation of OTC derivatives and structured products or the amount of leverage being taken on, regulators are going to require comprehensive, timely and accurate reporting, a requirement that hedge funds typically have little experience of.

"While the exact form of regulatory reporting is still to be finalized, it is clear from our discussions with market participants and U.S. governing bodies that there is going to be an overwhelming need for the kind of flexible risk and regulatory reporting tools developed by FRSGlobal that have helped hundreds of banks worldwide meet the their regulatory needs over the past twenty years. This experience and expertise is now going to be available to the hedge fund industry."

FRSGlobal's unified platform has coverage for over 30 countries.

Properties Searched in UK/Cayman Hedge Fund Investigation

The UK Serious Fraud Office (SFO) Friday conducted searches on two residential properties (one in Kent, the other in Surrey) assisted by the City of London Police, in connection with its investigation into an alleged fraud involving the recently collapsed hedge fund, Weavering Capital.

Two men, aged 43 and 45, were arrested and have been taken to a police station for questioning.

Hedge fund Weavering Capital launched in March 2009, acting as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. The Macro Fund was understood to have funds under management of around $639 million in late 2008.

The investigation is currently focused, the SFO said, on certain interest rate swap transactions between the Macro Fund and a company registered in the British Virgin Islands, Weavering Capital Fund Limited, which appears to be a related third party, which inflated the apparent Net Asset Value of the Macro Fund. More details to be released as the case proceeds.

Hedge Fund Backed Korean-American for Boston Mayor?

Hedge fund donors are behind Sam Yoon, candidate for mayor of Boston, according to the Boston Globe.

South Korea born, Yoon is already among the most prominent Korean-Americans in elected office, along with the mayors of Irvine, Calif., and Edison, N.J. He has used his stature to raise his profile as a political activist, the paper reported.

A Korean-American hedge fund manager in New Jersey last gear gave $100,000 with which Yoon founded a political action group, Asian Political Leadership Fund.

Yoon has spent $60,000 from the fund to run ads in Asian-language newspapers for candidates nationwide, including Hubert Vo, a Vietnamese-American state representative in Texas; Ashwin Madia, an Indian-American Iraq war veteran who ran unsuccessfully for Congress in Minnesota; and Barack Obama.

Convertible Arbitrage: Shifting Gears - Review

Convertible Arbitrage: Shifting Gears, a new 15 page white paper released by Credit Suisse/Tremont Hedge Fund Index, examines the reasons behind the Convertible Arbitrage meltdown in 2008 and the factors driving the strategy’s recent turnaround.

Convertible Arbitrage went from being one of the worst-performing strategies in the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) in 2008, to one of the best-performing strategies in the first quarter of this year. Many believe that the fundamental and technical reasons for convertibles’ devaluation in 2008 may correct as credit markets begin to stabilize and if deleveraging continues to abate. Convertible Arbitrage: Shifting Gears discusses the strategy’s ability to generate positive returns both during the declines in equity markets in January and February, as well as during the global market rallies in March and April.

Here are some highlights from the report:

Convertible Arbitrage funds were caught in a “perfect storm” of fundamental and technical difficulties following the fall of Lehman Brothers, resulting in a decline of 25.5% in the period from September 1 to December 31, 2008.

In January, convertible bond yields were atypically more attractive than straight bond yields with similar maturity and seniority in the capital structure.

Although yields have dropped since their highs at the end of 2008, the resurgence of new issuances as well as continued cheapening of the asset class points to Convertible Arbitrage as a strategy that may continue to rebound in 2009 if conditions in the credit markets continue to improve.

Volatility trading of the strategy was curtailed during the large declines in 4Q 2008 and early 2009, but may come back later in the year if equity markets stabilize, albeit with a reduction in the use of leverage.

Convertible Arbitrage registered one of the best performances in the Broad Index for 1Q 2009, returning 7.7%.

And in summary, as a result of the dramatic market events in the last four months of 2008, convertible bond valuations have dropped, possibly creating investment opportunities on both absolute and relative bases.

Factors to consider are:

— Attractive yield levels have persisted through the first quarter of 2009 while credits spreads have widened as many investors were forced to delever

— Equity volatility may remain high in 2009, which could make the convertible bonds an attractive way to gain exposure to stocks

— For equity crossover investors, convertibles have been trading in some instances for small premiums above their conversion value, providing for some a yield-generating equity substitute that has seniority in the capital structure to common equity

— On the credit side, many single name convertible bonds have been in the position of trading at higher yields than straight debt from the same issuers with similar maturities and seniority in the capital structure, thereby providing the equity option at no cost (with some even trading below their bond floor)

So in summary, volatility trading, usually an important aspect of the Convertible Arbitrage strategy, has been curtailed due to the reduction in the use of leverage, the low level of new issuances at the start of 2009, and the weakness of the equity markets in January and February, while the credit play has garnered more attention due to the overall appreciation in the convertible bond market.

This has resulted in a shift in focus for many arbitrageurs, as they take advantage of opportunities on the long side of the credit market, tactically resorting to hedges to contain certain risks. With the fundamental and technical problems that impaired the strategy’s performance in September and October’s environment showing signs of abating, Convertible Arbitrage could be poised for a rebound over the next 12-24 months, although Credit Suisse/Tremont believes there may be some bumps along the way.

SEC Proposes to Further Strengthen Safeguards of Investor Funds

The SEC has proposed rule amendments to substantially increase protections for investors who entrust their money to investment advisers, hedge funds and FoHF's.

The SEC is seeking public comment on the proposed measures, which are intended to ensure that investment advisers who have “custody” of clients’ funds and securities are handling those assets properly, investment law firm, Pillsbury Winthrop Shaw Pittman LLP, said.

“These new safeguards are designed to decrease the likelihood that an investment adviser could misappropriate a client’s assets and go undetected,” said SEC Chairman Mary Schapiro. “That’s because an independent public accountant will be looking over their shoulder on at least an annual basis.”

The additional safeguards proposed by the SEC include a yearly “surprise exam” of investment advisers performed by an independent public accountant to verify client assets. In addition, when an adviser or an affiliate directly holds client assets, a custody control review would have to be conducted by a PCAOB-registered and inspected accountant.

The SEC’s proposed rule amendments, if adopted, would promote independent custody and enable independent public accountants to act as third-party monitors.

Public comments on today’s proposed rule amendments must be received by the Commission within 60 days after their publication in the Federal Register. The full text of the proposed rule amendments will be posted to the SEC Web site soon, the law firm said.

Ex Hedgie To Build and Run World's Largest Solar Project

Former hedge fund manager, Mitchell Dong, and his new company, Mohave Sun Power, LLC, has announced plans to build a solar project, operating what it says will be the world's largest solar-thermal power plant on land in northwest Arizona.

Dong got in trouble last year with the SEC over some alleged improper trading with his hedge fund Chronos, he was however, able to settle the issue without litigation.

Sunlight will be collected using mirrored troughs and focused on a tube of oil running through the center of the troughs. The oil will be transported back to a central facility where it will be used to generate steam. Some of the energy will be stored in molten salt tanks until it is needed during peak energy times.

"It's a synthetic oil heated to 800 degrees by the sun's light," Dong said. "There are rows and rows of these collectors, and this 800-degree oil is pumped to a central power block, a central location where that hot oil goes to a boiler. It makes steam and drives a single steam turbine."

Dong said some of the generated heat will be stored in molten salt that will allow the plant to generate power at night when cloud cover diminishes solar radiation. However, the company must first settle the sensitive issue of groundwater, as well as obtaining the permits and approval at the federal, state and local level.

MENA Multistrategy Hedge Fund Launch

Alternative asset manager, Duet Group, has launched the first Middle East and North Africa (MENA) multistrategy hedge fund "Duet MENA Opportunities Fund". The new fund will target both equity and fixed income markets in the MENA region and will be managed by Duet MENA Limited, a DIFC licensed asset manager.

Rabih Sultani, Chief Investment Officer, will manage the fund under the leadership of Hedi Ben Mlouka, Chief Executive Officer of Duet MENA. Rabih brings over 9 years of fund management and research experience across equities and fixed income.

"The investment team has one of the longest established track records in the Middle East." Hedi Ben Mlouka said, "The current unfolding crisis has created unprecedented opportunities in global markets. Such opportunities appear to be even more eye-catching in the MENA region, and we, Duet Group, are well positioned to take advantage of these prospects for our clients. I am pleased to announce that Duet's commitment to the Middle East has led to the allocation of significant capital to the fund from existing shareholders and clients".

The new hedge fund will deploy three main investment strategies: Conviction, Relative Arbitrage and Opportunistic trading. These will be premised on pricing dislocations and valuation imbalances that are created from time to time under the influence of economic, political and capital flow factors.

The hedge fund manager has $2 billion of equity under management and their flagship hedge fund 'Duet Global Opportunities Fund' was awarded Best Equity Market Neutral Fund of the year in 2007 by Euro Hedge and HFM.

BNY Mellon is Hedge Fund Administrator of The Year, Wins 7 Awards

Along with an award for Hedge Fund Administrator of the year for their alternative investment services (AIS), the Bank of New York Mellon received 6 other awards at the International Custody & Fund Administration (ICFA) Global Awards 2009 in London.

BNY Mellon also received the award for White Paper of The Year for 'Inside the Engine Room', published in June 2008, which examined the operational challenges and opportunities for Nordic institutions.

The Global Awards judging panel included Dr Werner Frey, CEO of the European Securities Forum and Angela Knight, CEO of The British Bankers Association.

"Receiving both the Hedge Fund Administrator and Broker Dealer Custody & Clearing Provider awards shows that the industry has a profound appreciation of how we continue to meet the needs of our clients as their business models converge and evolve." Art Certosimo, Head of Alternative Investment & Broker-Dealer Services, said, "We are offering a unique combination of administration, custody, collateral management and liquidity services that enables our clients to deliver the services and transparency that investors are seeking."

QPRC Patent Asset Hedge Fund Launch

Intellectual Property Asset Manager, Quest Patent Research Corporation, (QPRC) has entered into an exclusive capital management agreement with a newly formed Delaware limited liability company, PSI Capital Management, LLC. (PSI) to launch a new patent asset hedge fund, Patent Strategies I Fund, LP.

Domiciled in New York, with $250,000 as minimum investment, the fund has a 2% management fee, a 2 year lockup period and JP Morgan Chase as custodian. The launch comes with a new website.

Jon Scahill, QPRC President, and Joby A. Hughes, minority PSI owner will serve as the Principals of PSI. Under the terms of the agreement, QPRC, through PSI, will be solely responsible for researching, selecting and monitoring investments and deciding on when and how much to invest or withdraw from a particular investment. The new fund has an investment strategy of acquiring interests in patent assets and generating revenues from licensing activities relating to patent assets.

"QPRC’s management provides a unique resource for taking on intellectual property assets at any stage in their development." Hughes said, "As a market leader in the development of early stage intellectual property, QPRC is already in a position to manage and commercialize those types of assets. PSI provides QPRC additional financial resources to develop a wider array of assets to their fullest potential. It is exciting and an honor to be included in this next phase for QPRC.”

“Collaboration on this initiative with an individual of such caliber and performance as Hughes is a tremendous value." Scahill said, "This new partnership will further our ability to provide shareholders participation in a dynamic asset class, uncorrelated to the broader market.”

Hedge Fund managers In Bermuda To Register By June 30th

Two new legislations were introduced in Bermuda January 1, requiring regulated financial institutions to comply with various obligations under the recently updated legislative framework, according to Cayman Islands law firm Conyers Dill & Pearman.

The firm said that the updated legislation defines 'Financial Institutions' as persons who, among other things, carry on the business of a 'fund administrator', or are 'operators' of investment funds.

The BMA expects Financial Institutions, under its supervision, to address their management of the relevant risks in a thoughtful and considered way, and to establish and maintain systems and procedures which are appropriate and proportionate to the risks identified.

Investment fund operators and fund administrators are required to appoint a Money Laundering Reporting Officer (“Reporting Officer”) to whom reports should be made and who shall have responsibility to make reports when suspicious circumstances require.

It is a requirement for “non-licensed persons” to register with the BMA by 30 June 2009 using the BMA’s prescribed form and paying the relevant fee. Failure to comply will result in their inability to carry on business activities, the firm said.

Hennessee: April Challenging but Hedge Funds Advance

Hedge fund adviser, Hennessee Group LLC, announced that the Hennessee Hedge Fund Index advanced +3.84% in April (+5.02% YTD).

“April continued to be a challenging environment for hedge funds, as the market rally was driven by short covering and momentum, rather than changes in fundamentals,” commented Charles Gradante, Co-Founder of Hennessee Group. “While we have seen some improvement in data (most typically that the rate of deterioration is slowing), most funds remain conservatively positioned. Funds are cautious and will wait for fundamentals to improve before significantly expanding their net exposures.”

“Hedge funds underperformed again in April, but have still outperformed year to date. Volatility remains elevated with the S&P 500 experiencing a gain or loss greater than 8% each month this year,” said Lee Hennessee , Managing Principal of Hennessee Group . “Last year hedge funds did a good job of protecting capital, so they don’t need a huge rally to reach a new high water mark. Equity markets would need to double from current levels to reach their previous high.”

Lipper: UK Hedge Funds led by Emerging Markets

UK-domiciled funds had a strong week to Friday May 8, led by global emerging markets products, according to data from Thomson Reuters research firm Lipper.

Asia Pacific funds also performed well, as did funds investing in European smaller companies. Global bonds, UK gilts and UK index-linked gilts were the only sectors to post negative returns in the week.

Lipper, a Thomson Reuters company, is a leading fund research and analysis organisation, providing independent insight on global collective investment including mutual funds, retirement funds, hedge funds, fund fees and fund expenses to the asset management and media communities.

Proactive Preparations For Hedge Fund Regulation

In a white paper which was presented to high-level asset managers in New York by FinServ Consulting, 'Preparing for Alternative Asset Management Regulation', it is said that hedge funds should be prepared to identify, aggregate and report on counterparty risk exposures, enterprise-wide.

“The majority of hedge funds and private equity funds spent the latter part of 2008 and early 2009 instituting layoffs and shutting down projects. Now, in light of coming regulation, the heads of these funds will be faced with having to do more with less. Therefore, it is going to be critical that funds approach their compliance efforts in an organized and efficient manner,” said Howard Weinstein, Managing Partner of FinServ Consulting. “We recommend that funds identify a partner who can help them navigate these important steps. Ultimately, finding an experienced firm who has been through this process before will enable the fund to save both time and money.”

The paper outlines a roadmap for planning cost-effective, asset-building infrastructures to meet new rules, such as approaching new regulatory rules as opportunities, and facing compliance activities proactively, with a budget for meeting future requirements and exceeding investor expectations, particularly as investors return to the market.·

MFA Supports the Registration of Hedge Fund Investment Advisors

In testimony before the House Financial Services Subcommittee “Perspectives on Hedge Fund Registration”, the Managed Funds Association (MFA) announced its support for the new push for mandatory registration of managers with the SEC.

"Though hedge funds were not the cause of the ongoing problems in our financial markets and our economy, MFA and our members share the commitment of policy makers to enact measures that will help restore stability to our markets, strengthen financial institutions and restore investor confidence." Richard H. Baker, MFA President and CEO, said, "We believe supporting mandatory registration for investment advisers is just one of the many important steps that can be taken towards these mutually shared goals."

Baker’s testimony stressed that while hedge funds are important to the capital markets and the financial system, the relatively small size and scope of the industry, with approximately $1.5 trillion in assets under management, did not pose significant systemic risk. He also stressed that hedge funds are substantially less leveraged than banks, have outperformed the overall market and have not sought any federal assistance.

“A registration framework that overwhelms the resources, technology and capabilities of regulators will not achieve the intended objective, and will greatly impair the ability of the regulator to fulfill their existing responsibilities, as well as their new responsibilities.

AIMA Guide to Sound Practices for Funds of Hedge Funds Managers

Global hedge fund association AIMA (The Alternative Investment Management Association), has published the world’s first global Guide to Sound Practices for Funds of Hedge Funds Managers.

The guide was developed by some of the world’s leading funds of hedge funds practitioners. It focuses on areas including risk management, due diligence, disclosure to investors, valuation, management of conflicts of interest and other operational issues. The group consisted of Unigestion, Financial Risk Management; Man Investments; Fauchier Partners; Pacific Alternative Asset Management; Ivy Asset Management; HDF Finance; Penjing Asset Management and Simmons & Simmons.

“AIMA has produced a huge body of work on sound practices and this was the ‘missing book in the library’." Andrew Baker, CEO of AIMA, and a member of the steering group, commented, "It is particularly important given recent events that there should be dedicated guidelines for funds of hedge funds managers. Funds of funds are a critical sector in the industry, are of particular interest to institutional investors, and it is right that AIMA has taken the lead in documenting sound practices. We hope that these guidelines that have been drawn up by such a distinguished and experienced group will be widely observed within the industry.”

SHINE as 100 Women in Hedge Funds' 2009 Beneficiary

Childrens educational program SHINE has been named UK Charity of the year by 100 Women in Hedge Funds and beneficiary of its Annual London fundraising event in October.

“It is always a difficult process to pick from many eligible beneficiaries, we believe in SHINE and are thrilled to help fund the important support they gives to educational programmes." Effie Datson, Chair of 100 Women in Hedge Funds in London, said, "SHINE is investing in a meaningful and measurable way in the future prosperity of the UK, while bringing hope, happiness, and a sense of achievement to children that might otherwise have been left behind. The work they does is vital - now more than ever.”

"It is not just another educational charity - it funds only those programmes which have a real and measurable impact on improving the educational attainment of those children and young people who face the greatest challenges in life.” Sarah Brown, Patron of SHINE, said.

100 Women in Hedge Funds serves over 10,000 alternative investment management investors and practitioners through educational, professional development and philanthropic initiatives. Since its first educational event in 2002, 100 Women in Hedge Funds has hosted more than 150 sessions globally, connected more than 150 senior women through Peer Advisory Councils and raised in excess of $15 million for philanthropic causes in the areas of women’s health, education and mentoring.

Dow Jones Halts Hedge Fund Publications

Due to poor market conditions in the distressed securities space, Dow Jones's hedge fund arm has suspended publication of the Dow Jones Hedge Fund Distressed Securities Strategy Benchmark.

The Dow Jones Hedge Fund Convertible Arbitrage Strategy Benchmark was also halted in January, 2009 and remains suspended until further notice. The remaining strategies—Equity Long/Short, Equity Market Neutral, Event Driven and Merger Arbitrage, will continue to be published on an end-of-day basis.

Launched in November 2003, the Dow Jones Hedge Fund Strategy Benchmarks measure individual hedge fund strategies. The six existing strategies are Equity Market Neutral, Convertible Arbitrage (suspended), Distressed Securities (suspended), Merger Arbitrage, Event Driven and Equity Long/Short . DJHFI provides style-pure, hedge fund strategy indexes that exhibit highly correlated component returns.

Hedge Fund Citadel's Investment Banking Division Launch

Citadel Securities has added three former Merrill Lynch and Goldman Sachs senior investment bankers to the hedge fund company, at the same time launching Citadels Investment Banking division.

Todd Kaplan joined Citadel in March, he will assume the role of Head of Investment Banking for Citadel Securities. Brian Maier joins as Head of Industry Groups and Carl Mayer joins as Head of Leveraged Finance.

“By bringing Todd to Citadel Securities to head up our banking effort, we are executing our strategy of developing a leading, fully integrated, client-facing franchise across investment banking and institutional sales and trading," Rohit D’Souza, CEO of Citadel Securities said "Todd and his team are outstanding investment bankers with strong relationships who have experience across a broad spectrum of capital markets areas."

Commenting on the opportunities for Citadel in the marketplace, Kaplan said, "Now more than ever, corporations are looking for sound, actionable advice. With Citadel Securities’ unique set of assets, I look forward to building our investment banking operation as we provide innovative products and services to a broad group of clients in an increasingly complex environment.”

“We have the foundation of an exceptional team of esteemed banking professionals,” said D’Souza. “Together we will be able to deliver fully developed world class capabilities to meet our clients' needs.”

Hedge Fund Manager Rusciano Released on Bond

The Connecticut-based hedge fund manager who had his assets frozen by the SEC last month, Francesco Rusciano, was released on $500,000 bond to the custody of his parents after a court hearing in Bridgeport federal court.

According to the SEC's complaint, Francesco Rusciano solicited investments for two hedge funds, Ponta Negra Fund I, LLC and Ponta Negra Offshore Fund I, LTD, which is the principal of Ponta Negra Group, LLC, located at his residence in Stamford, Conn.

The hedge fund manager also sent out an e-mail to investors saying that his Ponta Negra hedge funds had $59 million in assets under management as of February 2009. According to the SEC's complaint, the hedge funds had less than $10 million.

The SEC says that Rusciano forged brokerage account statements to make it appear that another hedge fund account had more than $43 million in assets, when it had less than $3 million.

"Rusciano went to great lengths to deceive investors, and the SEC is committed to ensuring that money managers who provide inaccurate information to investors and fail to uphold their fiduciary duties are held responsible for their misconduct," said Rose Romero, Director of the SEC's Fort Worth Regional Office.

MTM Looking To Offshore Hedge Fund Partner For US Real Estate Deal

US hedge fund manager MTM Global Financial Services is looking for an offshore hedge fund partner. In order to raise approximately $50 million in capital for a REIT fund focused on newer US residential real estate in state income tax free Florida, Texas, Nevada and Washington.

The fund manager says, "By creating a joint venture with an offshore mutual fund, hedge fund, or high net worth individual, MTM Global Financial Services will provide the acquisition services, along with the day to day operation of the real estate rental portfolios."

"This is a straight up deal, with huge upside, that will offer transparency and integrity for the investors." the President of MTM Global Financial Services said, "we seek a joint venture partner, that is results driven, that values their reputation, and knows a good thing when they see one. We think this could become a lucrative long term enterprise for all involved."

Swiss FoHF Announces Equity Buyback and Investment Program

Swiss alternative investment company ALTIN AG has said it intends to maintain its share price by buying back between 5% and 10% of its own shares, its Board of Directors has also approved a capital reduction program. The fund of hedge fund's management performance was predictably negative (-29.20%) in 2008, yet considerably higher than key stock market indices.

2008 proved a particularly harsh year for the financial markets, compounded by additional difficulties specific to the hedge fund industry. The severe credit crisis often forced hedge funds to fire-sell positions.

In addition, the increased correlation between hedge funds and equity markets did not protect them against falling stock markets. In performance terms, the year 2008 has thus been negative for hedge funds and ALTIN proved no exception with a -29.20% fall in its net asset value. However, in light of the losses incurred by world stock markets over the same period, this result is acceptable and hedge funds remain the best performing asset class over the medium term.

Invested in approximately 40 hedge funds, the company has chosen to avoid illiquid strategies that have caused the closing of a number of hedge funds, ALTIN’s manager has been favouring liquidity since 2007.

Hedge Fund Manager Sells London FoHF

Hedge fund manager Integrated Asset Management plc has sold the majority of one of its London fund of hedge funds business to a subsidiary of Sal. Oppenheim jr & Cie S.C.A, for approximately €3.5 million ($4.6 million) in cash and the cancellation of Sal. Oppenheim’s entire share interest.

The transaction does not impact the hedge fund manager’s brokerage operations in Milan which will continue to operate as usual, Integrated said.

The fund of hedge funds business as a whole reported net assets of £24.28 million ($32.3 million). In the 6 months ended 30 June 2008 the fund of hedge funds business reported unaudited net assets of £24.42 million ($32.4 million) and assets under management of $2,402 million ($3.2 million).

“In response to the unprecedentedly challenging market conditions of the past nine months, we have structured this deal with Sal. Oppenheim to benefit both our funds’ investors and the Company’s shareholders." Emanuel Arbib, CEO of Integrated, said. "Once the transaction is completed, Integrated, with a strong and liquid balance sheet, will be well positioned to consider opportunities that are available in today’s marketplace.”

Touching base with the Hedge Fund community

SOCIAL INTERACTION
HedgeCo currently has a presence on LinkedIn, Facebook (fan page and group), and Twitter. We understand that a lot is currently going on in this realm, please let us know if you think of any new features we can add or new ways we can bring our content to the social network.

BLOGGING and COLUMNISTS
The HedgeCo Hedge Fund Blog currently features authors who represent various segments of the hedge fund industry. We are open to accepting new columnists, if anyone wants to contribute to our blogs please contact me, Aaron Wormus at (561) 835 8690 and we can discuss.

NEWS
We have been publishing hedge fund news on HedgeCo.net since our inception. Our news section is one of the most trafficked portions of the site. We are currently working on new ways to display our news, but are open to new ideas and suggestions.

We have a weekly & daily newsletter which members of HedgeCo.Net can subscribe to. We also publish our news via Twitter, and various Facebook and LinkedIn groups.

If you have news you would like to see published, please send it to news@hedgeco.net

NETWORKING EVENTS
At the end of 2008 we started hosting monthly hedge fund social networking events in NYC. Networking events require more planning and resources than the other items in this list, but if you are in an area which has potential for a networking event. Please let us know and we will be happy to discuss it with you.

Full aricle here

Treasury gets 100 New Fund Manager Applications

The Treasury Department said that they have recieved 100 applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program (PPIP).

A variety of institutions applied, including traditional fixed income, real estate, and alternative asset managers, such as hedge funds.

Successful applicants must demonstrate a capacity to raise private capital and manage funds in a manner consistent with Treasury's goals, they must have experience investing in eligible assets and headquartered in the United States.

Applicants can expect to be informed of their preliminary qualification around May 15, 2009, when they can begin raising a minimum of $500 million in private capital that will serve as the investment that, pending further approval, will be matched with taxpayer funds.

Since announcing the program details on March 23, the Treasury has encouraged small, veteran, minority and women owned private asset managers to partner with other private asset managers. On April 6, Treasury extended the deadline for fund manager applications to provide more time to facilitate these types of partnerships.

Hedge Fund Manager and Financial Services Expert Added To Dow Jones Media Team

Dow Jones & Company has added London based hedge fund manager Paul Sharma as telecommunications, media and technology columnist, and NY's award winning Donna Childs, as a financial services columnist.

"The appointments of Paul and Donna are part of our overarching strategy to enhance our editorial teams with top industry talent. We are drawing on the hedge fund and banking communities to deepen Dow Jones's reporting and commentary on companies, industries and events for investment bankers and corporate advisors," said Adam Smallman, global managing editor for investment banking coverage at Dow Jones Newswires. "During this time of great change in markets, our editorial focus is firmly on delivering to investment bankers the intelligence that powers deals and transactions. With their industry experience, Paul and Donna will offer a unique perspective on firms, sectors and events for our investment banker readership."

Sharma was a partner at a London-based hedge fund, Cheyne Capital Management, where he managed a telecommunications value fund. Prior to that, he was the director of telecommunications sales at HSBC and spent four years as vice president and lead telecommunications analyst at J.P. Morgan in London.

Before joining Dow Jones, Ms. Childs led the microfinance firm Childs Capital LLC, which she founded in 1998. Prior to this, she was president and chief operating officer of ERC Financial Market Products in New York, an investment banker in the financial institutions group of Goldman Sachs and a director at Swiss Reinsurance Company in Zurich. Ms. Childs has won multiple awards throughout her career, including the National Association of Women Business Owners' '2007 Woman Business Owner of the Year'. She was named one of the '40 under 40' rising stars of New York in 2005 by Crain's New York Business.

Multi-Million Dollar Hedge Fund Fraud in Conneticut

The SEC has frozen the assets of a Connecticut-based hedge fund manager, alleging that he forged documents, promised false returns, and misrepresented assets managed by the funds to illicitly raise more than $30 million from investors.

According to the SEC's complaint, Francesco Rusciano solicited investments for two hedge funds he controls, Ponta Negra Fund I, LLC and Ponta Negra Offshore Fund I, LTD, which is the principal of Ponta Negra Group, LLC, located at his residence in Stamford, Conn.

The hedge fund manager also sent out an e-mail to investors saying that his Ponta Negra hedge funds had $59 million in assets under management as of February 2009. According to the SEC's complaint, the hedge funds had less than $10 million.

The SEC says that Rusciano forged brokerage account statements to make it appear that another hedge fund account had more than $43 million in assets, when it had less than $3 million.

"Rusciano went to great lengths to deceive investors, and the SEC is committed to ensuring that money managers who provide inaccurate information to investors and fail to uphold their fiduciary duties are held responsible for their misconduct," said Rose Romero, Director of the SEC's Fort Worth Regional Office.

The SEC's investigation is continuing.

Hedge Fund Assets up to $91 Billion in March

Hedge fund assets under administration (AuA) have grown to $91 billion as of 31 March 2009 from $88 billion at 31 December 2008, according to hedge fund tech. and analytics procider GlobeOp Financial Services S.A.

"I am encouraged by the level of fund inflows during the first quarter of 2009." Hans Hufschmid, chief executive officer, said, "New clients with AuA of nearly $12 billion, along with new funds from existing clients of $5 billion and subscription inflows of $3 billion, offset first quarter redemptions and terminations, which we knew would be substantial, as referenced in our 2008 preliminary results announcement."

"In addition," Hufschmid said, "client fund performance generated over $1 billion, a positive sign that hedge fund managers may have begun adapting to the changing market environment."

GlobeOp noted a sustained investor demand for greater transparency, independent portfolio verification and control of capital. Fund managers are looking for operational solutions to meet these requirements and to improve their own operational cost structures that are challenged by redemptions and lower fees.

"Funds will remain under pressure from redemptions by investors and raising new capital will continue to be challenging. Thus, while GlobeOp's current pipeline for new business is promising, we remain focused on prudent cost management and productivity improvements."

With headquarters are in London, New York, Dublin, Ireland; George Town, Cayman Islands; Harrison and Yorktown Heights, NY and Hartford, CT, U.S.A.; and Mumbai (Bombay), India, GlobeOp serves more than 180 clients worldwide, representing $91 billion in assets under administration (AuA).

Environmental Defense Fund Commends New Calif. Hedge Against Higher Fuel Prices

The California Air Resources Board has adopted the world's first Low Carbon Fuel Standard (LCFS), once implemented it can dramatically reduce the environmental impact of transportation, the Environmental Defense Fund says.

The Environmental Defense Fund believes the standard is an important hedge against higher, future conventional fuel prices. By helping develop better and cheaper alternative fuel production methods, low carbon fuels will become increasingly more affordable than gasoline as increasing crude oil prices take hold, the fund believes.

"While achieving the 2020 goal will require expenditures, this measure is an investment that will yield extensive returns through fuel diversification, increased resilience to fuel price fluctuations, independence from foreign fuel sources, and development of emerging businesses."

The low-carbon fuel standard is an important tool to help California transform its fuel mix. When coupled with an economy wide cap on emissions that includes the transportation sector, the California Low Carbon Fuel Standard represents the ultimately cost effective and technologically feasible way to transform our transportation sector and meet carbon reduction goals.

Environmental Defense Fund, a leading national nonprofit organization, represents more than 500,000 members. Since 1967, Environmental Defense Fund has linked science, economics, law and innovative private-sector partnerships to create breakthrough solutions to the most serious environmental problems.

Alpha Magazine Announces 2009 Hedge Fund 100

"Alpha" released the results of the 2009 Hedge Fund 100, the magazine's eighth annual ranking of the world's biggest single-manager hedge fund firms. Although most hedge fund managers in 2008 couldn't escape the carnage from what many have called the worst financial crisis since the Great Depression, their industry overall lost less money than did other investors. For their part, the firms in the Hedge Fund 100 managed a combined $1.03 trillion in assets at the beginning of this year, down from the record $1.35 trillion that the world's 100 largest firms managed at the end of 2007.

Bridgewater Associates leads the Hedge Fund 100 with $38.6 billion in assets under management. The Westport, Connecticut-based firm, which was founded by Raymond Dalio more than 30 years ago, grew by more than $2 billion in assets last year, based on the strength of its Pure Alpha Strategy hedge fund, which was up 8.7 percent in 2008. New York-based JPMorgan -- the world's biggest hedge fund firm a year ago -- saw its assets fall 26.4 percent, to $32.9 billion, in large part because of redemptions and poor investment performance at its Highbridge Capital Management group.

Redemptions have been a challenge for most hedge fund firms, even those that managed to deliver positive returns in 2008, as investors have looked to raise cash where they can. In the fourth quarter of last year, hedge funds saw a net outflow of $152 billion, with most of the assets coming out of bigger firms. In recognition of this new reality, "Alpha" changed the methodology for the Hedge Fund 100, using firm and fund asset totals as of January 1, 2009 (in the past the magazine collected December 31 data). To qualify for "Alpha's" 2009 Hedge Fund 100, a firm needed at least $4 billion in assets under management, compared with the $6.25 billion minimum a year ago.

The ten biggest hedge funds managed a combined $264 billion at the start of 2009, down nearly 12 percent from year-end 2007.

"Alpha's" Hedge Fund 100 Top 10

Rank Firm Total Capital ($ millions)
1 Bridgewater Associates 38,600
2 JPMorgan Asset Management 32,893
3 Paulson & Co. 29,000
4 D.E. Shaw & Co. 28,600
5 Brevan Howard Asset Management 26,840
6 Man Investments 24,400
7 Och-Ziff Capital Management Group 22,100
8 Soros Fund Management 21,000
9 Goldman Sachs Asset Management 20,585
10 Farallon Capital Management 20,000
10 Renaissance Technologies Corp. 20,000
To view the complete rankings for the Hedge Fund 100, visit www.alphamagazine.com

Hedge Fund Manager Brings Experience to Proskauer Rose

Hedge fund tax manager at Wellington Management Company, John F. Harvey III, has joined international law firm Proskauer Rose LLP as a partner in the Boston office.

At Proskauer, Harvey will be a partner in the Tax Department, where he will focus on tax aspects related to the formation, operation and investment activities of a broad range of private investment funds, such as buyout, venture and hedge funds, among other things.

“John’s unique and varied skill set will serve as an ideal strategic complement both here in Boston and across the firm,” Steven M. Ellis, head of Proskauer’s Boston office, said. “Our private investment funds practice is extremely tax intensive and, as we expand our capabilities around the world, this experience becomes even more important. John is a key addition to what is already a tremendous platform.”

Proskauer’s Private Investment Funds Practice Group, which is recognized by Chambers USA, US Legal 500 and numerous other directories and publications as among the leading practices of its kind, represented sponsors in closing more than 125 funds with over $30 billion in committed capital and closed more than 450 investments in all types of funds, representing well over $19 billion, in 2008.

Merlin Launches New Hedge Fund Sales Group

Hedge fund tech. and brokerage provider, Merlin Securities, formed a new equity sales coverage and content division, the Merlin Institutional Group.

Headed by Jesse Cole and Bryan Miller in New York, the group will focus on delivering traditional institutional equity sales coverage and content to medium and large hedge funds. The group will provide clients with services such as corporate access, company modeling and trading ideas.

“Merlin Institutional Group represents an important development for Merlin,” said Stephan Vermut, founder and managing partner of Merlin. “We have built our reputation on providing excellence in prime brokerage, reporting, trading, and operational support for our clients. With the addition of this new team, we will now be in a position to provide clients with investment ideas, research and modeling. Jesse and Bryan... are recognized in the industry for their expertise, and we are delighted to welcome them to Merlin.”

Jesse W. Cole joins Merlin from Schonfeld IBS, where he was a member of the institutional sales and trading group since its inception in 2004. Bryan Miller was most recently with the institutional research sales and trading group at Collins Stewart.

Merlin Secutities was recognized as the #1 prime broker for funds less than $1 billion by Alpha magazine’s 2008 hedge fund service provider survey for the second year running.

Hedge Fund Manager Names Former Citi Exec Andrew Smith Head of Global Sales

Coinciding with the launch of new services aimed at increasing hedge fund transparency, independent alternative fund manager Butterfield Fulcrum appointed T. Andrew Smith as the firm's global head of business development and marketing. He will be based in the company's New York office, and will oversee Butterfield Fulcrum's teams in Europe, Asia and North America.

With nearly 20 years of experience in institutional sales, business development, securities and global fund services, Smith's appointment comes as investors demand operational transparencies from hedge funds.

Smith most recently served as a managing director and head of North America in global transaction services at Citi overseeing a $1.0 billion securities and fund services region. Before that he served as senior vice president of plan sponsor services at The Bank of New York and spent ten years at the State Street Corporation.

First Quarter Hedge Fund Report

Hedge funds took modest advantage of March's upswings in the global equity and credit markets, according to Morningstars hedge fund performance summary for the first quarter of 2009.

Equity markets around the world significantly rebounded in March as appetite for risk returned, especially in emerging markets, according to the report. Positive lending and manufacturing news in China coupled with higher commodity prices, which helped stocks in other emerging economies such as Russia, drove the Morningstar MSCI Emerging Markets and Morningstar Emerging Markets Hedge Fund Indexes to increase 4.2% and 6.2%, respectively.

"In March we saw a recovery in equity and some credit markets, which helped hedge funds post small gains. But many hedge fund managers, believing that the economy is not yet out of hot water, continued to remain cautious, and were not strongly positioned to participate in the market rally," said Nadia Papagiannis, Morningstar hedge fund analyst. The Morningstar MSCI Developed Markets Hedge Fund Index rose only 1.1% in March compared to the MSCI World Index, which climbed 7.2%.

Hedge Funds in the Current Environment

In co-operation with the City Bar Center for Continuing Legal Education, Karl A. D'Cunha, a Senior Managing Director of Houlihan Smith & Company, Inc., will participate in a panel discussion involving industry experts and City Bar Center Faculty titled: "Hedge Funds in Distress" during the City Bar Center for CLE's program titled: "Hedge Funds in The Current Environment" moderated by Nora M. Jordan of Davis Polk & Wardwell.

The educational overview of "Hedge Funds in the Current Environment" will take place today at the Association House of the City Bar Center for Continuing Legal Education at 42 West 44th Street in New York.

Houlihan Smith & Company, Inc. is an investment banking firm that works with 20 of Alpha Magazine's "Top 100 Hedge Funds."

Cayman Island Hedge Funds Webinar

Cayman Island law firm Solomon Harris is today hosting its inaugural Webinar on the highly topical subject of ‘Managing Distressed Cayman Funds and lessons learned for new funds’.

"This fits in perfectly with our firm’s progressive approach to business and our focus on keeping our clients up-to-date and informed. This is particularly so as our firm tends to work directly with investment managers and the more informed our clients are, the better for us as their legal advisers," says Sophia Harris, the firm’s Managing Partner.

"The recent significant stresses placed upon hedge funds, particularly in Q4 of 2008, have given our investment funds group invaluable insight into the issues facing managers with liquidity problems and the legal and practical tools available to them." Paul Scrivener, partner and head of the investment funds group, said, "We were keen to share our experiences in a practical way with those involved in the industry and we felt the medium of the webinar was the ideal way to reach the widest possible audience."

Also helping with with the presentation is KPMG, locally known for the provision of US tax services to Cayman funds. Paul Hotchkiss of KPMG will be covering recent tax changes in the UK and the possible impact on Cayman Islands investment funds.

"I visited Cayman recently to undertake a series of seminars on these and similar topics and I am delighted to be asked by Solomon Harris to participate in their inaugural Webinar." Hotchkiss said, "UK taxation of offshore funds is undergoing significant change and also there has been an increased interest from HM Revenue and Customs in the structuring of such funds. As Cayman has been historically, and is still, widely used as jurisdiction of choice to establish funds with a UK focus, I hope my comments will be relevant to the participants who are involved with funds with a UK focus."

As investment funds are such a major part of the firm’s practice, the firm also launched its fund-specific website, ‘CaymanHedgeFundWorld.com’ late last year also with a view to keeping the firm’s clients better informed.

Salus Alpha Hedge Funds Awarded Extraordinary Performance Award

Vienna based hedge fund manager Salus Alpha Group Services GmbH has been awarded the alternative investments award of geld-magazins for extraordinary good performance for their Salus Alpha Directional Markets UCITS III Funds.

The Swedish state pension platform, Premium Pension Authority, recently included Salus Alpha funds in its portfolio. Included on the platform are Salus Alpha Real Estate, multi manager funds Salus Alpha Event Driven, Salus Alpha Managed Futures and Salus Alpha Equity Hedged.

The Salus Alpha funds that were chosen are UCITS III compliant, and meet the strict requirements regarding transparency, daily liquidity and adequate administration procedures set up for hedge funds by the Swedish pension authority.