Based on two surveys of private equity managers and hedge fund managers, carried out during August 2009, Open Europe has published the most comprehensive study to date of the likely impact of the EU's proposed Alternative Investment Fund Managers (AIFM) Directive. Among the findings is that the hedge fund and private equity industries contribute €9 billion ($13.3 billion) in tax revenues to European Union (EU) governments.
Open Europe said that the €9 billion ($13.3 billion) tax contribution would be enough to fund the EU’s entire overseas aid budget for 12 years. The tax contribution also matches the value of the EU’s Cohesion and Aid Programmes for Poland and is just short of the subsidy that France receives each year under the EU’s Common Agricultural Policy.
“Alternative investment fund managers provide investments and create growth, jobs and more efficient markets across Europe,” the report said.
The survey also found that the UK hedge fund and private equity industries contribute about €6.1 billion ($9 billion) in tax revenues to HMRC. Open Europe said this would be enough to pay for more than 200,000 nurses, 45,000 hospital consultants or 165,000 teachers. In just two years, the tax revenues generated by alternative investment fund managers would be able to pay for the entire 2012 London Olympics, according to Open Europe. But if the tax revenues were to disappear, Open Europe said it would take a 20% increase in council tax in order to make up the shortfall.
The European Commission’s Alternative Investment Fund Managers (AIFM) directive would cost the hedge fund and private equity industries in the EU between €1.3 billion and €1.9 billion ($1.9 billion and $2.8 billion) in its first year, if implemented in its current form. The annual recurring cost would be between €689 million and €985 million ($1 billion and $1.4 billion). Respondents said their total compliance costs would increase by almost one-third on average.
The report commented: “Our surveys show that unless a range of amendments take place, the AIFM directive will impose substantial costs across the board, without offering sufficient benefits for the industry, investors and the wider economy… In a worst-case scenario, thousands of jobs and millions in tax revenues could be at stake.”
Open Europe received 121 responses from hedge fund managers and fund of fund managers representing $342 billion assets under management. Just over half of the respondents came from managers located in the UK, while over one-fifth came from the rest of the EU and around one-quarter from the rest of the world. Open Europe also received 41 responses from private equity managers primarily based in the UK, representing funds under management of over $204 billion.
The report can be downloaded from Open Europe’s website at http://www.openeurope.org.uk/research/aifmd.pdf.
22 Sept 2009
21 Sept 2009
CME Partners With Hedge Funds in Restructuring Clearing Services
CME Group is restructuring its credit default swap (CDS) with hedge fund Citadel Investment Group as a strategic program targeted at providing clearing-only services for the nearly $27 trillion CDS market.
Key features developed as part of the joint effort with Citadel, which was known as CMDX, will be carried forward in the clearing-only service, including state-of-the-art trade booking and legacy trade migration facilities.
"We remain committed to bringing stability and transparency to the CDS market, while further enhancing confidence in the financial marketplace," said Terry Duffy, Executive Chairman, CME Group. "Over the past several months, we have been working closely with all market participants. Both buy-side and sell-side participants have expressed an interest in continuing to execute their CDS transactions the same as they do today, but with the added benefit of central counterparty clearing."
Citadel remains a founding member of the newly restructured CDS initiative. The other buy-side founding members are: AllianceBernstein, BlackRock, BlueMountain Capital Management, the D. E. Shaw group and PIMCO. A number of leading sell-side participants are in the process of becoming founding members. CME Group plans to announce the launch of the clearing initiative's pilot program in the weeks ahead. CME's clearing solution builds on the existing over-the-counter (OTC) market.
Key features developed as part of the joint effort with Citadel, which was known as CMDX, will be carried forward in the clearing-only service, including state-of-the-art trade booking and legacy trade migration facilities.
"We remain committed to bringing stability and transparency to the CDS market, while further enhancing confidence in the financial marketplace," said Terry Duffy, Executive Chairman, CME Group. "Over the past several months, we have been working closely with all market participants. Both buy-side and sell-side participants have expressed an interest in continuing to execute their CDS transactions the same as they do today, but with the added benefit of central counterparty clearing."
Citadel remains a founding member of the newly restructured CDS initiative. The other buy-side founding members are: AllianceBernstein, BlackRock, BlueMountain Capital Management, the D. E. Shaw group and PIMCO. A number of leading sell-side participants are in the process of becoming founding members. CME Group plans to announce the launch of the clearing initiative's pilot program in the weeks ahead. CME's clearing solution builds on the existing over-the-counter (OTC) market.
10-Year Mark for Mooring's Flagship Hedge Fund
The second quarter of 2009 marked the 10th year of operation for Washington, DC-based hedge fund, Mooring Capital Fund, which delivered a quarterly compounded return of 12.40% per year.
“Our flagship Mooring Capital Fund has provided a consistent record of performance to investors since inception 10 years ago." John Jacquemin, founder and President of Mooring Financial Corporation, commented,"We are very pleased with the fund’s sound long-term performance, demonstrated by a total return of 242.51 percent over the last decade.”
For the same period, the S&P 500 posted an annual compounded return of -1.70% and the Credit Suisse/Tremont Hedge Fund Index reported a quarterly compounded annual return of 6.89 %.
Mooring Capital Fund acquires and manages distressed, sub-performing and performing commercial loans. The portfolio is diversified by both asset type and geography. Mooring Capital Fund also takes long and short equity positions in the financial and real estate markets for up to 20% of its assets. As of June 30, 2009 Mooring Capital Fund had over $62 million in total gross assets.
“Our flagship Mooring Capital Fund has provided a consistent record of performance to investors since inception 10 years ago." John Jacquemin, founder and President of Mooring Financial Corporation, commented,"We are very pleased with the fund’s sound long-term performance, demonstrated by a total return of 242.51 percent over the last decade.”
For the same period, the S&P 500 posted an annual compounded return of -1.70% and the Credit Suisse/Tremont Hedge Fund Index reported a quarterly compounded annual return of 6.89 %.
Mooring Capital Fund acquires and manages distressed, sub-performing and performing commercial loans. The portfolio is diversified by both asset type and geography. Mooring Capital Fund also takes long and short equity positions in the financial and real estate markets for up to 20% of its assets. As of June 30, 2009 Mooring Capital Fund had over $62 million in total gross assets.
18 Sept 2009
Investment in Precious Metals Surge as Investors Buy Gold
In a Sunday Times article this weekend, Bryan Collings, who manages the Investment Fund for Ingnis International Hexam Global Emerging Markets, predicted an increase in the price of precious metals of 25% over the next 18 months. He forecasts that the price of gold will rise 20% to $1,200 an ounce by 2010. Remarkably, other commentators are predicting an even more significant rise to $1,500 an ounce within the next two years.
Gold was pushed to its highest level in the last six months because investors are keen to buy gold as a hedge against inflation. Gold has always been seen as a good investment in times of economic uncertainty. With continued concerns about inflation, the gold markets show no signs of cooling unlike the currency markets which continue to fluctuate.
Jason Cozens, Managing Director of Au, the online gold exchange said, "This is consistent with our predictions for the price of gold as investors are undoubtedly keen to buy gold at the moment. We are seeing an increase in enquiries from all kinds of investors. Media reports, like the Sunday Times article, are encouraging investors and we believe that it is prudent for individuals to invest up to 40% of their total portfolio in gold".
Similarly, the price of other precious metals has soared since the beginning of the year. Silver has also strengthened with figures from the S&P GSCI Silver index showing a gain of 46.4% since the start of 2009. Copper has risen 102% since the beginning of the year and experts are predicting that with a shortage in supply and growing demand the price will continue to go up. Uranium prices are also expected to rise with an increase in demand for the metal, which is used in the production of nuclear energy.
Gold was pushed to its highest level in the last six months because investors are keen to buy gold as a hedge against inflation. Gold has always been seen as a good investment in times of economic uncertainty. With continued concerns about inflation, the gold markets show no signs of cooling unlike the currency markets which continue to fluctuate.
Jason Cozens, Managing Director of Au, the online gold exchange said, "This is consistent with our predictions for the price of gold as investors are undoubtedly keen to buy gold at the moment. We are seeing an increase in enquiries from all kinds of investors. Media reports, like the Sunday Times article, are encouraging investors and we believe that it is prudent for individuals to invest up to 40% of their total portfolio in gold".
Similarly, the price of other precious metals has soared since the beginning of the year. Silver has also strengthened with figures from the S&P GSCI Silver index showing a gain of 46.4% since the start of 2009. Copper has risen 102% since the beginning of the year and experts are predicting that with a shortage in supply and growing demand the price will continue to go up. Uranium prices are also expected to rise with an increase in demand for the metal, which is used in the production of nuclear energy.
17 Sept 2009
Hedgeable's Search for America's Worst Investor
On a humorous note, Hedgeable.com launched today with the "Search for America's Worst Investor," a nationwide contest to find three people with the portfolios hit hardest by the financial crisis.
"As the crisis revealed, retail investors are lost when it comes to implementing strategies to protect their wealth," said Hedgeable CEO and co-founder Michael Kane, formerly an analyst at Spruce Private Investors, a $2 billion ultra-high net worth money manager. "We want to guide investors on how to decide when to sell, eliminate major losses, and realize portfolio growth in up or down markets."
Americans are still trying to recover from the unprecedented loss of wealth of 2007-2009. Hedgeable.com, which is offering a free trial of its service, advocates the need for investors to make periodic trades to help protect and grow their portfolios.
The Search for "America's Worst Investor"
The contest, which runs from September 16 to September 30, 2009, is open to anyone who registers free of charge on the Hedgeable.com site. The top three individuals whose portfolio performance earns them the distinction of "Worst Investor in America" will receive the following prizes:
-- First Prize: An all-expenses-paid vacation for two to Rome, Italy,
where they will find similarities between the U.S.'s current economic
situation and the Roman Empire's collapse due to leverage, taxes, a
de-valued currency, and massive debt.
-- Second Prize: A trip for two to picturesque Iceland, a country that
has seen its stock market lose 97% of its value due to leveraged bets
and excessive debt.
-- Third Prize: A trip for two to Las Vegas, the "foreclosure and
gambling capital of America."
"The anniversary of Lehman's demise should remind us of the huge risk in not managing a hedged portfolio," Kane concluded. "If the U.S. continues on its current path, it's the everyday investor who will be affected the most, by a second collapse that could make the Roman Empire seem like small potatoes."
Hedgeable Inc. is registered as an investment advisor with the SEC.
"As the crisis revealed, retail investors are lost when it comes to implementing strategies to protect their wealth," said Hedgeable CEO and co-founder Michael Kane, formerly an analyst at Spruce Private Investors, a $2 billion ultra-high net worth money manager. "We want to guide investors on how to decide when to sell, eliminate major losses, and realize portfolio growth in up or down markets."
Americans are still trying to recover from the unprecedented loss of wealth of 2007-2009. Hedgeable.com, which is offering a free trial of its service, advocates the need for investors to make periodic trades to help protect and grow their portfolios.
The Search for "America's Worst Investor"
The contest, which runs from September 16 to September 30, 2009, is open to anyone who registers free of charge on the Hedgeable.com site. The top three individuals whose portfolio performance earns them the distinction of "Worst Investor in America" will receive the following prizes:
-- First Prize: An all-expenses-paid vacation for two to Rome, Italy,
where they will find similarities between the U.S.'s current economic
situation and the Roman Empire's collapse due to leverage, taxes, a
de-valued currency, and massive debt.
-- Second Prize: A trip for two to picturesque Iceland, a country that
has seen its stock market lose 97% of its value due to leveraged bets
and excessive debt.
-- Third Prize: A trip for two to Las Vegas, the "foreclosure and
gambling capital of America."
"The anniversary of Lehman's demise should remind us of the huge risk in not managing a hedged portfolio," Kane concluded. "If the U.S. continues on its current path, it's the everyday investor who will be affected the most, by a second collapse that could make the Roman Empire seem like small potatoes."
Hedgeable Inc. is registered as an investment advisor with the SEC.
Bankers Open $12 Billion CaymanToxic Asset Hedge Fund
A group of 45 bankers have plans to avoid new strict rules on pay and bonuses, making more than £240 million ($400 million) between them, according to TimesOnline.
Led by British bankers Michael Keely and Stephen King, sources say they will quit Barclays to take on a contract managing £7.5 billion ($12.3 billion) of Barclays’ most toxic debt in a fund registered in the Cayman Islands. Barclays will lend $12.6 billion to Protium, a newly created Cayman Islands-registered hedge fund, to buy the toxic assets.
Barclays said in a press release that the shift of assets did not remove any risk from its balance sheet, but guaranteed it a more steady stream of income from them.
London analysts admitted they were puzzled by the scheme and could not see any great immediate benefit in it for Barclays, according to the London Evening Standard. Traders in other investment banks are quitting to avoid likely curbs on bonuses. About 20 from Société Générale left this week to set up a hedge fund called Nexar Capital to escape the bonus crackdown being threatened by Nicolas Sarkozy, the UK paper said.
Led by British bankers Michael Keely and Stephen King, sources say they will quit Barclays to take on a contract managing £7.5 billion ($12.3 billion) of Barclays’ most toxic debt in a fund registered in the Cayman Islands. Barclays will lend $12.6 billion to Protium, a newly created Cayman Islands-registered hedge fund, to buy the toxic assets.
Barclays said in a press release that the shift of assets did not remove any risk from its balance sheet, but guaranteed it a more steady stream of income from them.
London analysts admitted they were puzzled by the scheme and could not see any great immediate benefit in it for Barclays, according to the London Evening Standard. Traders in other investment banks are quitting to avoid likely curbs on bonuses. About 20 from Société Générale left this week to set up a hedge fund called Nexar Capital to escape the bonus crackdown being threatened by Nicolas Sarkozy, the UK paper said.
Deloitte Adds Hedge Fund Heavyweights Schubert and Iler
Hedge fund pioneers Ellen C. Schubert and Ray J. Iler have joined the hedge fund team of Deloitte LLP's Asset Management Services practice.
Schubert joined Deloitte in the newly-created role of Chief Advisor to the Asset Management Services practice and is based in New York. Prior to joining Deloitte, Schubert was a managing director and global head of the Fixed Income Hedge Fund Business for UBS Investment Bank from 2006 until 2008.
Iler rejoined Deloitte as the Northwest Pacific hedge fund leader and is based in San Francisco. From 2001 to 2006, he founded the tax practice and served as Audit Partner for Deloitte’s Grand Cayman practice.
The new hires are the latest in a series of strategic growth initiatives executed over the last 18 months by Cary Stier, Deloitte’s U.S. Head of Asset Management Services.
"Challenging times call for new ideas. The breadth of our practice offers us the perspective vital to designing new solutions that help clients prepare for the unforeseen. There has been too much surprise in the market, a trend that cannot continue," Stier added.
Ten current Deloitte partners have been newly-dedicated to Deloitte's hedge fund team, joining the global bench of talent in accounting and tax, valuation, anti-fraud, governance and oversight, regulatory and compliance, risk management, technology and operations, structuring, and third party administrator/prime brokerage relationships.
Schubert joined Deloitte in the newly-created role of Chief Advisor to the Asset Management Services practice and is based in New York. Prior to joining Deloitte, Schubert was a managing director and global head of the Fixed Income Hedge Fund Business for UBS Investment Bank from 2006 until 2008.
Iler rejoined Deloitte as the Northwest Pacific hedge fund leader and is based in San Francisco. From 2001 to 2006, he founded the tax practice and served as Audit Partner for Deloitte’s Grand Cayman practice.
The new hires are the latest in a series of strategic growth initiatives executed over the last 18 months by Cary Stier, Deloitte’s U.S. Head of Asset Management Services.
"Challenging times call for new ideas. The breadth of our practice offers us the perspective vital to designing new solutions that help clients prepare for the unforeseen. There has been too much surprise in the market, a trend that cannot continue," Stier added.
Ten current Deloitte partners have been newly-dedicated to Deloitte's hedge fund team, joining the global bench of talent in accounting and tax, valuation, anti-fraud, governance and oversight, regulatory and compliance, risk management, technology and operations, structuring, and third party administrator/prime brokerage relationships.
16 Sept 2009
No country for stimulus packages - Silkinvest on MENA Hedge Funds
In an update from MENA hedge fund investor SilkInvest, CEO Baldwin Berges writes, "While the major economies are still fuelled on policy support level, there are several economies in our region of focus that benefit from authentic internal growth drivers that are not always in need of extra stimulus."
"During the month of August, in anticipation of a possible correction of the summer rally in the majors, we have been taking some profits across our holdings, thereby increasing our cash levels in both our Arab and African equity funds to levels of around 15% and 13% respectively." Berges says, "In hindsight, this decision seems to be paying off. Both funds arguably continue to be amongst the most diversified across markets and sectors within the fund peer groups. We retain the flexibility to invest in the right opportunities as they present themselves."
Regarding the MENA markets, he said, "a development, although not very influential to stock prices, caught our attention: Yahoo, the popular Internet search engine, agreed to buy Arabic-language Internet venture Maktoob.com as it seeks to enter the Middle East market. Yahoo did not disclose the terms of the agreement. The transaction is set to be completed in the fourth quarter of this year. This is interesting because Yahoo sees tremendous growth opportunities for Arabic content in the region and sees in excess of 30% annual growth in internet users in the region over the years to come."
"During the month of August, in anticipation of a possible correction of the summer rally in the majors, we have been taking some profits across our holdings, thereby increasing our cash levels in both our Arab and African equity funds to levels of around 15% and 13% respectively." Berges says, "In hindsight, this decision seems to be paying off. Both funds arguably continue to be amongst the most diversified across markets and sectors within the fund peer groups. We retain the flexibility to invest in the right opportunities as they present themselves."
Regarding the MENA markets, he said, "a development, although not very influential to stock prices, caught our attention: Yahoo, the popular Internet search engine, agreed to buy Arabic-language Internet venture Maktoob.com as it seeks to enter the Middle East market. Yahoo did not disclose the terms of the agreement. The transaction is set to be completed in the fourth quarter of this year. This is interesting because Yahoo sees tremendous growth opportunities for Arabic content in the region and sees in excess of 30% annual growth in internet users in the region over the years to come."
Nexar Capital Group Hedge Fund Launch
Global hedge fund group, Nexar Capital Group SCA, announced the launch of an investment from funds managed by Aquiline Capital Partners LLC, a New York-based private equity firm.
The hedge fund firm was founded by industry veterans who built a market-leading hedge fund business at Société Générale Asset Management Alternative Investments, led by Arié Assayag, Chief Executive Officer; Eric Attias, Chief Investment Officer; and Bernard Kalfon, Head of Volatility Strategies.
“As an independent company, Nexar has a long-term approach that aligns our interests with those of our clients and allows us to provide them with superior investment management,” said Mr. Assayag. “Aquiline’s depth of investment management experience immediately gives us the strength and stability of an institutional platform, thus making Aquiline an ideal partner as we build our business.”
“Nexar’s team built its strong reputation in the industry through its success in growing and managing a leading hedge fund business,” said Jeff Greenberg, Chief Executive of Aquiline. “Recent market turmoil has underscored the importance of transparency, liquidity and true alpha generation, which are core elements of Nexar’s approach.”
The hedge fund firm was founded by industry veterans who built a market-leading hedge fund business at Société Générale Asset Management Alternative Investments, led by Arié Assayag, Chief Executive Officer; Eric Attias, Chief Investment Officer; and Bernard Kalfon, Head of Volatility Strategies.
“As an independent company, Nexar has a long-term approach that aligns our interests with those of our clients and allows us to provide them with superior investment management,” said Mr. Assayag. “Aquiline’s depth of investment management experience immediately gives us the strength and stability of an institutional platform, thus making Aquiline an ideal partner as we build our business.”
“Nexar’s team built its strong reputation in the industry through its success in growing and managing a leading hedge fund business,” said Jeff Greenberg, Chief Executive of Aquiline. “Recent market turmoil has underscored the importance of transparency, liquidity and true alpha generation, which are core elements of Nexar’s approach.”
15 Sept 2009
Hedge Fund Rocktoberfest WildCard Play-Off
This year marks the sixth anniversary of A Leg To Stand On’s annual benefit, Hedge Fund Rocktoberfest, being held at B.B. King Blues Club in New York on Thursday, October 8. This event unites a rapidly growing number of A Leg To Stand On supporters for a unique night of rock-and-roll performances by members of the hedge fund and financial communities.
The Rocktoberfest Wildcard Play-Off is being held tomorrow, September 16 at Sullivan Hall in New York, where four bands made up of hedge fund and related industry professionals will battle it out to perform at Rocktoberfest.
Since 2004, Hedge Fund Rocktoberfest has proudly served as A Leg To Stand On’s signature fundraising benefit. Due in large part to the support received through this one night, A Leg To Stand On has been able to directly help over 3,000 children through the provision of free corrective surgeries and prosthetic and orthotic devices.
An estimated 10,000 children have been helped through A Leg To Stand On’s training workshops, aimed at teaching innovative best-practices in orthopedic care to in-country medical providers. In January of 2009, A Leg To Stand On committed to helping a total of 11 project partners in Haiti, Nigeria, India, Bangladesh, Nepal, Colombia, Ecuador and Peru.
Capintro Outlines Opportunities Available to Hedge Fund Investors in 2009/2010
A new study by Capintro Partners, analyzing the impact of the events of 2008 on the hedge fund industry, indicates that the crisis may have led to structural changes which could benefit hedge funds.
The report makes a compelling case for having hedge funds as a strategic long term investment within a diversified portfolio. Capintro Partners highlights five key changes in the industry:
1) Assets in the industry have substantially declined due to investor redemptions, weak performance and flight to quality. The reduction in assets allows for outsized positive performance due to reduced competition among hedge fund managers within the same strategy.
2) The number of managers in the industry has also decreased, further reducing competition leading to wider spreads and an opportunity for larger gains.
3) Hedge funds have historically outperformed post crises and have performed well preserving capital throughout historical crisis events.
4) Hedge fund returns have varied more widely causing dispersion among manager returns to increase and correlation among managers and hedge fund strategies to decrease. This allows for greater diversification benefits to investors and leads to higher risk adjusted returns.
5) In order to attract new assets, managers are offering investors various incentives that may include access to closed funds, higher levels of liquidity, greater transparency and/or reduced fees.
Strategies that trade liquid securities and are able to take advantage of the volatility in global markets will be better positioned to outperform. Capintro favors the following strategies for the remainder of 2009:
1) Global Macro
2) Arbitrage
3) Equity Hedge
“It’s important for investors to realize that the current environment presents substantial opportunities for hedge fund managers and in turn for them. Our objective is to help uncover these opportunities, specifically in the aftermath of the events of 2008 and the massive de-leveraging that took place within the financial system” said Mahmoud Al-Khawaja, CEO of Capintro Partners.
About Capintro Partners, Ltd.
Headquartered in the United Kingdom with a representative office in Dubai, Capintro undertakes a range of activities including, but not limited to, placement services of actively managed funds and direct investments in the alternative investment industry including hedge funds. Aiming to become a leader in the investment product placement business, Capintro will bridge a gap between global investment managers and institutional and high net worth clients throughout the MENA (Middle East and North Africa) region.
The report makes a compelling case for having hedge funds as a strategic long term investment within a diversified portfolio. Capintro Partners highlights five key changes in the industry:
1) Assets in the industry have substantially declined due to investor redemptions, weak performance and flight to quality. The reduction in assets allows for outsized positive performance due to reduced competition among hedge fund managers within the same strategy.
2) The number of managers in the industry has also decreased, further reducing competition leading to wider spreads and an opportunity for larger gains.
3) Hedge funds have historically outperformed post crises and have performed well preserving capital throughout historical crisis events.
4) Hedge fund returns have varied more widely causing dispersion among manager returns to increase and correlation among managers and hedge fund strategies to decrease. This allows for greater diversification benefits to investors and leads to higher risk adjusted returns.
5) In order to attract new assets, managers are offering investors various incentives that may include access to closed funds, higher levels of liquidity, greater transparency and/or reduced fees.
Strategies that trade liquid securities and are able to take advantage of the volatility in global markets will be better positioned to outperform. Capintro favors the following strategies for the remainder of 2009:
1) Global Macro
2) Arbitrage
3) Equity Hedge
“It’s important for investors to realize that the current environment presents substantial opportunities for hedge fund managers and in turn for them. Our objective is to help uncover these opportunities, specifically in the aftermath of the events of 2008 and the massive de-leveraging that took place within the financial system” said Mahmoud Al-Khawaja, CEO of Capintro Partners.
About Capintro Partners, Ltd.
Headquartered in the United Kingdom with a representative office in Dubai, Capintro undertakes a range of activities including, but not limited to, placement services of actively managed funds and direct investments in the alternative investment industry including hedge funds. Aiming to become a leader in the investment product placement business, Capintro will bridge a gap between global investment managers and institutional and high net worth clients throughout the MENA (Middle East and North Africa) region.
14 Sept 2009
Trinity Fund Administration expands into Cayman
Hedge fund manager, Trinity Fund Administration has expanded by opening an office in the Cayman Islands after receiving a full Fund Administrators license from the Cayman Islands Monetary Authority.
Brad Cowdroy has been appointed Head of the new Cayman office and will have overall responsibility for local service offerings and the principal management of all North American account business. Brad joins from Goldman Sachs, where he was a Vice President in Fund Administration Services. Prior to this, Brad held positions at CIBC and PricewaterhouseCoopers in the Cayman Islands, where both roles focused in the funds area. Brad qualified as a Chartered Accountant in Sydney, Australia whilst working at BDO and has a Bachelor of Commerce (Accounting) degree from the University of Western Sydney, Hawkesbury.
John McCann, Managing Director of Trinity commented, “We are absolutely delighted to have someone of Brad’s calibre and experience heading up our new Cayman office and joining the Trinity group. Brad brings a wealth of experience in alternative fund servicing, as well as a broad knowledge of administrative and regulatory issues affecting our clients. We have no doubt he will make a significant contribution to the organisation’s growth moving forward”.
Trinity provides the full range of hedge fund administration services to investment groups based around the globe, which operate fund structures domiciled in a range of jurisdictions, including Ireland, Cyprus, Cayman Islands, Bahamas, Bermuda, BVI, Malta and the Channel Islands. A significant portion of its business comes from Cayman registered funds.
The firm’s expansion into Cayman comes in response to strong client demand, particularly from emerging managers, and will provide a local point for firms to access Trinity’s broad suite of services. Equally this befits a natural expansion of the business which will give Trinity better access to managers in North America.
John McCann added, “This is a major step forward in terms of Trinity’s expansion plans. We have always offered a complete suite of services to Cayman-domiciled funds and this brings us that much closer to this important component of our business”.
Trinity was also recently nominated for two awards from International Custody and Fund Administration and was voted number one in its class, within the recent prestigious annual Global Custodial Survey.
Brad Cowdroy has been appointed Head of the new Cayman office and will have overall responsibility for local service offerings and the principal management of all North American account business. Brad joins from Goldman Sachs, where he was a Vice President in Fund Administration Services. Prior to this, Brad held positions at CIBC and PricewaterhouseCoopers in the Cayman Islands, where both roles focused in the funds area. Brad qualified as a Chartered Accountant in Sydney, Australia whilst working at BDO and has a Bachelor of Commerce (Accounting) degree from the University of Western Sydney, Hawkesbury.
John McCann, Managing Director of Trinity commented, “We are absolutely delighted to have someone of Brad’s calibre and experience heading up our new Cayman office and joining the Trinity group. Brad brings a wealth of experience in alternative fund servicing, as well as a broad knowledge of administrative and regulatory issues affecting our clients. We have no doubt he will make a significant contribution to the organisation’s growth moving forward”.
Trinity provides the full range of hedge fund administration services to investment groups based around the globe, which operate fund structures domiciled in a range of jurisdictions, including Ireland, Cyprus, Cayman Islands, Bahamas, Bermuda, BVI, Malta and the Channel Islands. A significant portion of its business comes from Cayman registered funds.
The firm’s expansion into Cayman comes in response to strong client demand, particularly from emerging managers, and will provide a local point for firms to access Trinity’s broad suite of services. Equally this befits a natural expansion of the business which will give Trinity better access to managers in North America.
John McCann added, “This is a major step forward in terms of Trinity’s expansion plans. We have always offered a complete suite of services to Cayman-domiciled funds and this brings us that much closer to this important component of our business”.
Trinity was also recently nominated for two awards from International Custody and Fund Administration and was voted number one in its class, within the recent prestigious annual Global Custodial Survey.
Man Investments & Dexion Launch Man AHL Diversity
Alternative asset manager, Man Investments, and UK hedge fund advisory and marketing firm, Dexion Capital Group, announced the launch of a new UCITS III trend following product, Man AHL Diversity.
“Historically, the performance of trend following managers has tended to be uncorrelated to traditional stock and bond markets." Tim Wong, Chief Executive Officer of AHL, said, "We saw that with AHL’s highly impressive performance last year when its best performing fund delivered 33% at the same time as some equity markets fell 40%.”
Investors will be able to access the sterling denominated product with a minimum initial investment of £100 from the product’s launch in October 2009.
Founded in 1987, AHL manages $20.4 billion (as at 31 March 2009) and has delivered a strong track record of performance. Based on past data and adjusted for structure, fees and costs, Man AHL Diversity would have delivered annualised returns of over 14% during the past 14 years. AHL managed funds have produced a positive return in every calendar year since inception.
AHL’s track record has been greatly reinforced through Man’s funding of the Oxford-Man Institute (OMI) and the creation of AHL Oxford, the compny says.
The Oxford University academics of the OMI and AHL’s researchers in AHL Oxford share purpose designed premises, where AHL’s researchers have already developed several valuable commercial applications. Now in its second year, this arrangement has created a stimulating environment that fosters day-to-day interactions between AHL and the university's academics and students, and has provided AHL with exposure to leading academic thinking from a worldwide network of experts and wide spectrum of disciplines.
Trend followers – often known as managed futures managers – seek to exploit persistent trends and other market inefficiencies in a systematic way using highly liquid futures markets. Their funds are designed to perform whether prices trend up or down with the result that returns tend to be uncorrelated with traditional stock or bond markets.
“Historically, the performance of trend following managers has tended to be uncorrelated to traditional stock and bond markets." Tim Wong, Chief Executive Officer of AHL, said, "We saw that with AHL’s highly impressive performance last year when its best performing fund delivered 33% at the same time as some equity markets fell 40%.”
Investors will be able to access the sterling denominated product with a minimum initial investment of £100 from the product’s launch in October 2009.
Founded in 1987, AHL manages $20.4 billion (as at 31 March 2009) and has delivered a strong track record of performance. Based on past data and adjusted for structure, fees and costs, Man AHL Diversity would have delivered annualised returns of over 14% during the past 14 years. AHL managed funds have produced a positive return in every calendar year since inception.
AHL’s track record has been greatly reinforced through Man’s funding of the Oxford-Man Institute (OMI) and the creation of AHL Oxford, the compny says.
The Oxford University academics of the OMI and AHL’s researchers in AHL Oxford share purpose designed premises, where AHL’s researchers have already developed several valuable commercial applications. Now in its second year, this arrangement has created a stimulating environment that fosters day-to-day interactions between AHL and the university's academics and students, and has provided AHL with exposure to leading academic thinking from a worldwide network of experts and wide spectrum of disciplines.
Trend followers – often known as managed futures managers – seek to exploit persistent trends and other market inefficiencies in a systematic way using highly liquid futures markets. Their funds are designed to perform whether prices trend up or down with the result that returns tend to be uncorrelated with traditional stock or bond markets.
11 Sept 2009
Swedbank Robur Reduces Fund of Hedge Fund Fees
Scandinavian fund of hedge fund manager, Swedbank Robur announced that it is lowering fees by .2% to .4% on its 5 funds, effective October 1st.
"These reductions are in line with our ambition to offer an attractive product range with competitive prices." Mats Lagerqvist, President of Swedbank Robur, said, "We are always looking for improvements and when it comes to these funds we have identified an opportunity to adjust the fees. It is our strong belief that this new fee structure will be more distinct for our customers since it is easier to understand the relationship between the fund fee and the risk level of the fund".
Swedbank Robur offers fund of funds under the product name Access. This product category is specifically developed for customers who do not have the time to change their fund portfolio from one day to the other.
"These products are highly appreciated by customers who want a well diversified portfolio. The customers also get access to markets which are otherwise rather inaccessible. The funds deliver not only diversification but also an active reallocation of the underlying funds. Altogether Swedbank Roburs Access funds are an attractive investment alternative for many of our customers and through the reduction of fees we will be even more competitive in terms of pricing", Lagerqvist said.
Swedbank Robur is a wholly owned subsidiary of Swedbank. Founded in 1967, Robur was one of the first fund managers in Sweden. Managing the capital of 3.1 million investors, in the Swedish mutual fund market, Swedbank Robur has approximately 27% of assets under management.
"These reductions are in line with our ambition to offer an attractive product range with competitive prices." Mats Lagerqvist, President of Swedbank Robur, said, "We are always looking for improvements and when it comes to these funds we have identified an opportunity to adjust the fees. It is our strong belief that this new fee structure will be more distinct for our customers since it is easier to understand the relationship between the fund fee and the risk level of the fund".
Swedbank Robur offers fund of funds under the product name Access. This product category is specifically developed for customers who do not have the time to change their fund portfolio from one day to the other.
"These products are highly appreciated by customers who want a well diversified portfolio. The customers also get access to markets which are otherwise rather inaccessible. The funds deliver not only diversification but also an active reallocation of the underlying funds. Altogether Swedbank Roburs Access funds are an attractive investment alternative for many of our customers and through the reduction of fees we will be even more competitive in terms of pricing", Lagerqvist said.
Swedbank Robur is a wholly owned subsidiary of Swedbank. Founded in 1967, Robur was one of the first fund managers in Sweden. Managing the capital of 3.1 million investors, in the Swedish mutual fund market, Swedbank Robur has approximately 27% of assets under management.
Palladio Alternative Research goes live
Swiss-based Palladio Alternative Research Group has started operations in August 2009 via its first Geneva-based subsidiary.
Designed to provide outsourcing solutions for hedge fund research and due diligence, Palladio Alternative Research Group will be headed by Sarah Clar-Boson, founding partner and a former Senior hedge fund analyst at Optifin SA and UBP Alternative Asset Management Group.
The firm's two other partners include successful established hedge fund entrepreneurs: Christophe Reech, CEO and Chairman of Reech AiM Group, recently awarded Emerging Manager of the year 2009 by Institutional Investor, and Jean-Marc Emden, CEO of Nassau-based Autana Capital, who has extensive experience in alternative investments since 1992.
In addition, Palladio Alternative Research Group has set up strategic agreements with Lotus Peak Capital PTE Ltd (Singapore) for Asian research coverage and with Castle Hall Alternatives (Canada) for detailed operational due diligence upon request.
"The opportunity set for unbiased, professional hedge fund advice and analysis is a direct outcome of the 2008 crisis, given the obvious conflict of interests between advisory and investment, the Madoff debacle and the failure to complete continuous
in-depth due diligence services," commented Mrs Clar-Boson.
"There is an acute shortage of independent alternative research providers: going forward, investors are demanding a more dynamic and personalized dialog to replace their disappointing relationships with large, traditional organisations. The ongoing complexity and sophistication of hedge fund analysis drives the need for truly neutral third-party specialists and Palladio Alternative Research Group aims to progressively become a significant and trusted player in the space." she concluded.
Designed to provide outsourcing solutions for hedge fund research and due diligence, Palladio Alternative Research Group will be headed by Sarah Clar-Boson, founding partner and a former Senior hedge fund analyst at Optifin SA and UBP Alternative Asset Management Group.
The firm's two other partners include successful established hedge fund entrepreneurs: Christophe Reech, CEO and Chairman of Reech AiM Group, recently awarded Emerging Manager of the year 2009 by Institutional Investor, and Jean-Marc Emden, CEO of Nassau-based Autana Capital, who has extensive experience in alternative investments since 1992.
In addition, Palladio Alternative Research Group has set up strategic agreements with Lotus Peak Capital PTE Ltd (Singapore) for Asian research coverage and with Castle Hall Alternatives (Canada) for detailed operational due diligence upon request.
"The opportunity set for unbiased, professional hedge fund advice and analysis is a direct outcome of the 2008 crisis, given the obvious conflict of interests between advisory and investment, the Madoff debacle and the failure to complete continuous
in-depth due diligence services," commented Mrs Clar-Boson.
"There is an acute shortage of independent alternative research providers: going forward, investors are demanding a more dynamic and personalized dialog to replace their disappointing relationships with large, traditional organisations. The ongoing complexity and sophistication of hedge fund analysis drives the need for truly neutral third-party specialists and Palladio Alternative Research Group aims to progressively become a significant and trusted player in the space." she concluded.
10 Sept 2009
Cayman Hedge Fund Results Up For US Equity Market Neutral Fund
Global Hedge Fund Group said that their flagship fund, the US Equity Market Neutral Fund showed annual returns of between 22-45%, accompanied with a volatility of 8-12% per annum.
The fund commenced trading on 20 August 2001 with initial assets of $14 million from institutional investors. The strategy employs a proprietary factor model which measures trends in observed stock prices and expects to profit from market inefficiencies over time.
Global Hedge Fund Group works in close association with research firms, hedge fund managers, and brokerage houses.
The fund commenced trading on 20 August 2001 with initial assets of $14 million from institutional investors. The strategy employs a proprietary factor model which measures trends in observed stock prices and expects to profit from market inefficiencies over time.
Global Hedge Fund Group works in close association with research firms, hedge fund managers, and brokerage houses.
Butterfield Fulcrum Partners With Risk Fundamentals
Alternative fund administration company, Butterfield Fulcrum, has partnered with hedge fund software firm Risk Fundamentals, to provide comprehensive risk analytics to hedge fund managers.
“As independent administrators we sit at the junction where transparency and confidentiality have traditionally opposed each other,” said Akshaya Bhargava, Butterfield Fulcrum's CEO.
“Risk Fundamentals is a state of the art risk management and transparency solution for hedge funds, funds of funds and institutional investors,” said Ben Weston, Risk Fundamentals’ Chairman. “This collaboration fulfills a longstanding need in the marketplace for new and effective ways to understand and manage risk.”
Butterfield Fulcrum said the product will measure liquidity and leverage, the primary sources of hedge fund collapse.
“As independent administrators we sit at the junction where transparency and confidentiality have traditionally opposed each other,” said Akshaya Bhargava, Butterfield Fulcrum's CEO.
“Risk Fundamentals is a state of the art risk management and transparency solution for hedge funds, funds of funds and institutional investors,” said Ben Weston, Risk Fundamentals’ Chairman. “This collaboration fulfills a longstanding need in the marketplace for new and effective ways to understand and manage risk.”
Butterfield Fulcrum said the product will measure liquidity and leverage, the primary sources of hedge fund collapse.
9 Sept 2009
Hedge funds attract $4.5 billion in Aug 2009
Preliminary reporting from Eurekahedge finds that August marks the 6th consecutive month of positive returns for hedge funds (up 13.1% YTD); hedge funds up 2.6% for the last 12 months, while the MSCI AC World Index is down 18.5% for the same period.
Net inflows for hedge funds reached $4.5 billion in August, with over 50% of the reporting funds attracting capital during the month.
Most hedge funds recorded gains averaging close to or over 2% during August, with European managers (2.6%) delivering the best gains, on average. North American and Latin American funds ended the month with gains averaging 1.8% and 2.1%. Asian managers, on the other hand, underperformed most others, with Japan-specific funds up 0.7% and their Asia ex-Japan-investing counterparts down 1.1%.
There were over 300 new hedge fund launches and 400 fund closures confirmed by Eurekahedge so far this year.
Net inflows for hedge funds reached $4.5 billion in August, with over 50% of the reporting funds attracting capital during the month.
Most hedge funds recorded gains averaging close to or over 2% during August, with European managers (2.6%) delivering the best gains, on average. North American and Latin American funds ended the month with gains averaging 1.8% and 2.1%. Asian managers, on the other hand, underperformed most others, with Japan-specific funds up 0.7% and their Asia ex-Japan-investing counterparts down 1.1%.
There were over 300 new hedge fund launches and 400 fund closures confirmed by Eurekahedge so far this year.
Hedge Funds Lag as Equity Market Rally Continues - Hennessee
There was good economic news in August, specifically housing and manufacturing data, according to hedge fund research specialist Hennessee Group.
"Government spending continues to drive demand, while the private sector has been largely absent. This dynamic is not sustainable,” commented Charles Gradante, Co-Founder of Hennessee Group. “In addition, equity markets are no longer undervalued. With September being one of the worst months historically, we are cautious of a pull back in the markets.”
The Hennessee Hedge Fund Index advanced +1.85% in August (+17.30% YTD), while the S&P 500 increased +3.36% (+12.99% YTD), the Dow Jones Industrial Average increased +3.54% (+8.20% YTD), and the NASDAQ Composite Index advanced +1.54% (+27.40% YTD). The Barclays Aggregate Bond Index advanced +1.04% (+4.62% YTD).
“Hedge funds continued to lag the surging equity markets, as we would expect given their short portfolios and hedges,” said Lee Hennessee, Managing Principal of Hennessee Group. “Managers have opened up their exposures to benefit from the market rally. However, given the uncertainty around the economy, most managers are looking to generate gains due to stock selection, rather than beta exposure as there is potential for a correction.”
"Government spending continues to drive demand, while the private sector has been largely absent. This dynamic is not sustainable,” commented Charles Gradante, Co-Founder of Hennessee Group. “In addition, equity markets are no longer undervalued. With September being one of the worst months historically, we are cautious of a pull back in the markets.”
The Hennessee Hedge Fund Index advanced +1.85% in August (+17.30% YTD), while the S&P 500 increased +3.36% (+12.99% YTD), the Dow Jones Industrial Average increased +3.54% (+8.20% YTD), and the NASDAQ Composite Index advanced +1.54% (+27.40% YTD). The Barclays Aggregate Bond Index advanced +1.04% (+4.62% YTD).
“Hedge funds continued to lag the surging equity markets, as we would expect given their short portfolios and hedges,” said Lee Hennessee, Managing Principal of Hennessee Group. “Managers have opened up their exposures to benefit from the market rally. However, given the uncertainty around the economy, most managers are looking to generate gains due to stock selection, rather than beta exposure as there is potential for a correction.”
Peak Oil Investing Hedge Fund Launch
Hedge fund investor, logi ENERGY LLC., has announced the formation of The Peak Oil Value Fund. Launched September 8, the new hedge fund is the first of its kind aimed at institutional and accredited investors.
“We believe that the effects of Peak Oil on the markets are a temporary Global Macro series of events” Larry Ortega CIO of the Peak Oil Value Fund said, “We only have a few years to take advantage of these opportunities.“
The fund's investment strategy employs five approaches: 1) Publicly Traded Equities and Equity Options; 2) Investment in oil in storage; 3) Investment in Oil, Gasoline and Heating Oil spreads in the Futures Markets; 4) Private Investment in Public Equities of Oil and Gas Exploration Companies; and 5) Private Investment in Private Companies or Oil and Gas Fields.
“Our superb models developed by our deep, complex team of expert geophysicists, mathematicians, oil professionals and oil traders have been able to predict and identify the fluctuations of oil prices and indicate when we expect prices to move based on both fundamentals of oil production and demand as well as storage, refinery processing, price action and economic utilization." Ortega said, "They are not perfect, but we’re extremely pleased with the results. We invest like Warren Buffett, which is we make our money when we purchase our positions at deep value, thus the effects of our errors are minimal. Our difference is that in most of our strategies we also hedge nearly every position we take.”
The fund’s goal is to purchase or make significant investments in oil and gas exploration firms for their reserve positions while supporting their production and exploration efforts with direct investment in their fields and then hedge position value, reserves and future production. The fund expects to invest based on fundamental valuation of each position they take.
“We believe that the effects of Peak Oil on the markets are a temporary Global Macro series of events” Larry Ortega CIO of the Peak Oil Value Fund said, “We only have a few years to take advantage of these opportunities.“
The fund's investment strategy employs five approaches: 1) Publicly Traded Equities and Equity Options; 2) Investment in oil in storage; 3) Investment in Oil, Gasoline and Heating Oil spreads in the Futures Markets; 4) Private Investment in Public Equities of Oil and Gas Exploration Companies; and 5) Private Investment in Private Companies or Oil and Gas Fields.
“Our superb models developed by our deep, complex team of expert geophysicists, mathematicians, oil professionals and oil traders have been able to predict and identify the fluctuations of oil prices and indicate when we expect prices to move based on both fundamentals of oil production and demand as well as storage, refinery processing, price action and economic utilization." Ortega said, "They are not perfect, but we’re extremely pleased with the results. We invest like Warren Buffett, which is we make our money when we purchase our positions at deep value, thus the effects of our errors are minimal. Our difference is that in most of our strategies we also hedge nearly every position we take.”
The fund’s goal is to purchase or make significant investments in oil and gas exploration firms for their reserve positions while supporting their production and exploration efforts with direct investment in their fields and then hedge position value, reserves and future production. The fund expects to invest based on fundamental valuation of each position they take.
8 Sept 2009
Euromoney Launches International Hedge Fund Magazine
International publishing and information company, Euromoney Institutional Investor, is launching a new magazine and online offering covering US and international hedge funds in September. The new publication will be titled “AR”.
“The publication will include new surveys, rankings and high-powered web functionality,” Euromoney Institutional Investor chairman and editor-in-chief Padraic Fallon said, “With the hedge fund sector under intense scrutiny from Washington, regulators and investors, this is an excellent time to launch a hedge fund publication.”
Michelle Celarier, current editor of Absolute Return, will also be the editor of the new magazine. “Hedge fund performance has recovered strongly in 2009, after the sector’s worst ever performance in 2008, and there are now significant opportunities,” Celarier says.
The company’s hedge fund publishing assets include Institutional Investor’s Alpha magazine and Absolute Return magazine, which is published by HedgeFund Intelligence.
“The publication will include new surveys, rankings and high-powered web functionality,” Euromoney Institutional Investor chairman and editor-in-chief Padraic Fallon said, “With the hedge fund sector under intense scrutiny from Washington, regulators and investors, this is an excellent time to launch a hedge fund publication.”
Michelle Celarier, current editor of Absolute Return, will also be the editor of the new magazine. “Hedge fund performance has recovered strongly in 2009, after the sector’s worst ever performance in 2008, and there are now significant opportunities,” Celarier says.
The company’s hedge fund publishing assets include Institutional Investor’s Alpha magazine and Absolute Return magazine, which is published by HedgeFund Intelligence.
Third Avenue Launches Credit Fund, Hires Blackrock Hedge Fund Specialist
Third Avenue Management LLC, the investment adviser to the Third Avenue Funds has launched the Third Avenue Focused Credit Fund, capitalizing on credit, distressed and value equity investing.
"The current market environment provides attractive opportunities for experienced credit pickers like Third Avenue Management to generate meaningful returns," David Barse, Chief Executive Officer of Third Avenue Management, said, "Portfolio Manager Jeff Gary and Senior Research Analyst Thomas Lapointe will lead the effort of managing the new fund."
Prior to joining Third Avenue, Gary was at BlackRock Financial, which he joined in 2003 as the Portfolio Manager and head of the high-yield and distressed investment team which managed approximately $17 billion in assets in various mutual funds and institutional accounts.
Lapointe will focus on identifying and researching opportunities in high-yield and bank loan investments. Lapointe has over 17 years of investment experience and was previously responsible for managing approximately $6 billion in high-yield assets, as Co-Head of High-Yield Investments for Columbia Management.
"Third Avenue’s style emphasizes credit selection, total return and a deep value approach," Gary said, "Our opportunistic mandate allows us to invest in a wide range of credit securities – including bank loans, high-yield and convertible securities – that have the best risk-adjusted return potential which distinguishes the Fund from typical high-yield funds.”
The Fund will offer two classes of shares, Third Avenue Focused Credit Fund Investor Class, and Third Avenue Focused Credit Fund Institutional Class.
Third Avenue Management has approximately $14 billion in assets under management and offers value-oriented strategies through mutual funds, UCITS, separate accounts and alternative investment vehicles.
"The current market environment provides attractive opportunities for experienced credit pickers like Third Avenue Management to generate meaningful returns," David Barse, Chief Executive Officer of Third Avenue Management, said, "Portfolio Manager Jeff Gary and Senior Research Analyst Thomas Lapointe will lead the effort of managing the new fund."
Prior to joining Third Avenue, Gary was at BlackRock Financial, which he joined in 2003 as the Portfolio Manager and head of the high-yield and distressed investment team which managed approximately $17 billion in assets in various mutual funds and institutional accounts.
Lapointe will focus on identifying and researching opportunities in high-yield and bank loan investments. Lapointe has over 17 years of investment experience and was previously responsible for managing approximately $6 billion in high-yield assets, as Co-Head of High-Yield Investments for Columbia Management.
"Third Avenue’s style emphasizes credit selection, total return and a deep value approach," Gary said, "Our opportunistic mandate allows us to invest in a wide range of credit securities – including bank loans, high-yield and convertible securities – that have the best risk-adjusted return potential which distinguishes the Fund from typical high-yield funds.”
The Fund will offer two classes of shares, Third Avenue Focused Credit Fund Investor Class, and Third Avenue Focused Credit Fund Institutional Class.
Third Avenue Management has approximately $14 billion in assets under management and offers value-oriented strategies through mutual funds, UCITS, separate accounts and alternative investment vehicles.
4 Sept 2009
Cayman Islands Current Financial Position, Not Bankrupt
In a statement outlining the Cayman Islands financial position, the Hon. McKeeva Bush, Leader of Government Business/Premier Designate issued a statement regarding recent media coverage suggesting that the Cayman Islands is bankrupt, "we can confirm that these accusations are incorrect," she said.
Although Cayman’s two main industries, tourism and financial services, are significantly affected, "we are confident that the strength and resilience which has contributed to Cayman’s significant growth over the past 40 years will continue to serve the country well."
The Government’s efforts include the cutting of Government expenditure, customs duties, licence fees, and a number of other indirect taxes.
The government has also implemented an aggressive inward investment programme through private sector partnerships which will result in a number of new infrastructure projects and other developments. These will result in the region of $3 billion of inward investment in the short to medium term.
"In three weeks time we will be presenting our Budget which will continue to maintain Cayman’s sound financial stability. The Cayman Islands is well placed to take advantage of the global economic recovery and we are committed to continuing the success of our indirect tax system which has served the country so well over its history." McKeeva Bush concluded.
Although Cayman’s two main industries, tourism and financial services, are significantly affected, "we are confident that the strength and resilience which has contributed to Cayman’s significant growth over the past 40 years will continue to serve the country well."
The Government’s efforts include the cutting of Government expenditure, customs duties, licence fees, and a number of other indirect taxes.
The government has also implemented an aggressive inward investment programme through private sector partnerships which will result in a number of new infrastructure projects and other developments. These will result in the region of $3 billion of inward investment in the short to medium term.
"In three weeks time we will be presenting our Budget which will continue to maintain Cayman’s sound financial stability. The Cayman Islands is well placed to take advantage of the global economic recovery and we are committed to continuing the success of our indirect tax system which has served the country so well over its history." McKeeva Bush concluded.
Credit Suisse's AIR Shows Positive Month for Hedge Funds
Long/Short Equity hedge funds returned positive performance in August mainly as a result of the continued uptrend in equity markets, according to Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse.
"Following a strong rally in July, equity markets continued their upward trend in August, reaching highs not achieved since October 2008." Dr. Drachman noted, "Long/Short Equity hedge fund managers continued to increase their overall net exposures in order to benefit from market gains. Despite brief corrections due to a mid-month weak consumer sentiment report, managers were able to finish up for the month. The Credit Suisse Long/Short Equity Replication Index (“AIR Long/Short Equity Index”) was up 1.55% (net) for the month, while the Credit Suisse Global Macro Replication Index (“AIR Global Macro Index”) finished up 0.08% (net) over the same period."
AIR Indices seek to replicate the performance of major hedge fund strategies and enable investors to gain liquid, transparent insight into the Global Macro and Long/Short Equity sectors of the Credit Suisse/Tremont Hedge Fund Index. The AIR platform also offers inverse indices that seek to approximate short exposure to the aggregate returns of the universe of Long/Short Equity and Global Macro hedge fund managers.
Performances for the AIR Global Macro and Long/Short Equity Indices are calculated daily and shown net of a 1.15% per annum calculation fee.
"Following a strong rally in July, equity markets continued their upward trend in August, reaching highs not achieved since October 2008." Dr. Drachman noted, "Long/Short Equity hedge fund managers continued to increase their overall net exposures in order to benefit from market gains. Despite brief corrections due to a mid-month weak consumer sentiment report, managers were able to finish up for the month. The Credit Suisse Long/Short Equity Replication Index (“AIR Long/Short Equity Index”) was up 1.55% (net) for the month, while the Credit Suisse Global Macro Replication Index (“AIR Global Macro Index”) finished up 0.08% (net) over the same period."
AIR Indices seek to replicate the performance of major hedge fund strategies and enable investors to gain liquid, transparent insight into the Global Macro and Long/Short Equity sectors of the Credit Suisse/Tremont Hedge Fund Index. The AIR platform also offers inverse indices that seek to approximate short exposure to the aggregate returns of the universe of Long/Short Equity and Global Macro hedge fund managers.
Performances for the AIR Global Macro and Long/Short Equity Indices are calculated daily and shown net of a 1.15% per annum calculation fee.
3 Sept 2009
Global Climate Change Fund Launch
Alternative investment manager and advisor, Climate Change Capital, (CCC) has been appointed to manage a climate change fund for Dublin-domiciled UCITS platform, Russell OpenWorld.
The Global Climate Change Fund will be managed by Climate Change Capital's Global Equities' team of Paul Udall and Ronnie Lim.
The new fund will invest globally in sectors impacted by climate change. Udall and Lim, both Managing Directors at Climate Change Capital together have over 30 years' investment experience, and over 12 years' experience in managing specialist environmental equities. Prior to joining Climate Change Capital in 2007, both worked in the Sustainable Investment team at Morley Fund Management (now Aviva Global Investors), a top-ranked Socially Responsible Investing team.
"Climate Change Capital is uniquely positioned globally as an investment firm to benefit from the significant investment opportunities that exist in climate change," Shaun Mays, Chief Executive Officer at CCC, said, "Russell has a highly-regarded research and due diligence process, and we are pleased to be selected as the manager for one of their specialist, thematic funds."
The fund aims to provide significant excess returns above global equity markets by investing in a manager that takes high conviction active positions in companies that are affected by climate change. This is a relatively new area of investing, therefore, this fund enables investors to add an innovative and differentiated return stream to their portfolios.
With over US $1.5 billion under management as of April 2009, Climate Change Capital aims to provide attractive returns to investors, demonstrating the financial opportunity associated with the low carbon economy.
The Global Climate Change Fund will be managed by Climate Change Capital's Global Equities' team of Paul Udall and Ronnie Lim.
The new fund will invest globally in sectors impacted by climate change. Udall and Lim, both Managing Directors at Climate Change Capital together have over 30 years' investment experience, and over 12 years' experience in managing specialist environmental equities. Prior to joining Climate Change Capital in 2007, both worked in the Sustainable Investment team at Morley Fund Management (now Aviva Global Investors), a top-ranked Socially Responsible Investing team.
"Climate Change Capital is uniquely positioned globally as an investment firm to benefit from the significant investment opportunities that exist in climate change," Shaun Mays, Chief Executive Officer at CCC, said, "Russell has a highly-regarded research and due diligence process, and we are pleased to be selected as the manager for one of their specialist, thematic funds."
The fund aims to provide significant excess returns above global equity markets by investing in a manager that takes high conviction active positions in companies that are affected by climate change. This is a relatively new area of investing, therefore, this fund enables investors to add an innovative and differentiated return stream to their portfolios.
With over US $1.5 billion under management as of April 2009, Climate Change Capital aims to provide attractive returns to investors, demonstrating the financial opportunity associated with the low carbon economy.
The Securities and Exchange Commission Post-Madoff Reforms
The SEC has just released the information below regarding the actions it will take in the wake of the Madoff scandal. Pillsbury is sponsoring a program in San Francisco on this topic, October 8, 2009.
In the wake of the Madoff fraud, the SEC’s Office of the Inspector General launched an internal investigation in December 2008 to determine why the agency did not detect the scheme. While awaiting the report, the SEC has been taking decisive and comprehensive steps to reduce the chances that such frauds will occur or be undetected in the future.
Safeguarding Investors’ Assets: The SEC in May proposed two rules that would better protect clients of investment advisers from theft and abuse. The rules would provide assurance to these clients that their accounts contain the funds that their investment adviser and account statements say they contain. Among other things, the rules would encourage investment advisers to place their clients’ assets in the custody of an independent firm.
Surprise Exams: One proposal would require all investment advisers who control or have custody of their clients’ assets to hire an independent public accountant to conduct an annual “surprise exam” to verify those assets actually exist. This surprise examination would provide another set of eyes on the clients’ assets, thereby offering additional protection against the theft or misuse of funds.
Third Party Reviews: A second proposal would apply to investment advisers who do not use independent firms to maintain their clients’ assets. Such advisers would be required to obtain a third party written report assessing the safeguards that protect the clients’ assets. The report — prepared by an accountant registered and inspected by the Public Company Accounting Oversight Board — would, among other things, describe the controls that are in place to protect the assets, the tests performed on the controls, and the results of those tests. Existing rules make no distinction between an investment adviser whose affiliate holds its clients’ funds and an investment adviser that uses a truly independent custodian.
Revitalizing the Enforcement Division: Under the leadership of a new Enforcement Director, the SEC is restructuring the division to better ensure that it focuses on significant cases that will have a meaningful impact. The restructuring will reduce bureaucracy and speed up the enforcement process by removing a layer of management in the 1,100 person division. The newly structured division will include specialized units that will enable staff in those units to concentrate their expertise in focused areas and help detect patterns, links, trends and motives. In addition, the Division is streamlining internal processes to make investigative procedures more efficient.
Revamping the Handling of Complaints and Tips: In order to improve the handling of hundreds of thousands of complaints, tips, and referrals it receives each year, the SEC has contracted with Mitre, a federally funded research and development center, to help the agency revamp its processes across the agency. After reviewing and analyzing its intake procedures, the SEC is now beginning to improve upon its processes for collecting, recording, investigating, referring and tracking this information. Among other things, the agency is creating a centralized system for handling this information. Once the information and processes are centralized, the agency will apply risk analytics to better enable it to reveal links, trends, statistical deviations and patterns that might not be observable when each complaint is examined one at a time.
Advocating for a Whistleblower Program: The SEC has advocated for expanded authority from Congress to reward whistleblowers who bring forward substantial evidence to the agency about significant federal securities violations. In proposed legislation that the Chairman sent to Congress, a fund would be established to pay whistleblowers using money collected from wrongdoers that is not otherwise distributed to investors.
Conducting Risk-Based Examinations of Financial Firms: The SEC has dispatched its examiners to conduct a “sweep” of firms that present certain risk characteristics to ensure, among other things, that the clients’ assets in fact exist. Such risks include advisers whose clients’ assets are held with an affiliate, as opposed to an independent entity; hedge funds that seem to have “smooth” or outlier returns; firms that use an unknown auditor or no auditor at all; firms with a disciplinary history; and broker-dealers that sell an affiliate’s hedge fund or limited partnership.
Increasing Focus on Agency-Wide Risk Assessment: The SEC is assessing and improving the use of risk assessment techniques, agency-wide, to more proactively identify areas of risk to investors. The agency is increasing collaboration with third parties and other government agencies to identify firms or products that may pose risk to investors or markets. The agency is also improving our ability to monitor the industry — by identifying the data and information that financial firms would submit to the SEC — to allow it to better identify those particular firms that warrant a closer look by examiners and enforcement staff.
Improving Fraud Detection Techniques for Examiners: The SEC instituted measures to improve the ability of examiners to detect fraud and other types of violations. The measures include more rigorous reviews of firms before the examiners enter the premises, and a more complete exam guide that focuses not only on obvious signs of fraud but also more subtle signals that deserve closer inspection, such as a firm using an unknown accountant. The measures also include increased checks on outside entities to verify that assets actually exist there and expanded use of exams of an entire entity when firms have joint or dual registrants such as affiliated broker-dealers and investment advisers.
Recruiting Staff with Specialized Experience: The SEC is working to bring in new staff with diverse skill sets to expand its knowledge base and improve its ability to assess risk, conduct examinations, detect and investigate wrongdoing, and focus our priorities. Some initial examples included:
Senior Specialized Examiners: The agency is hiring new staffers to the examination unit who have specialized experience in areas such as trading, operations, portfolio management, options, compliance, valuation, new instruments and portfolio strategies, and forensic accounting.
Industry and Market Fellows Program: The agency is hiring new staffers who are highly-seasoned financial experts to keep pace with the practices of Wall Street and protect investors. These experts would provide other staffers with new information and perspectives to help them identify emerging issues and understand the ways the industry is changing.
Expanding and Targeting Training: The SEC is providing its staff with targeted training related to hedge funds and specialized products, derivatives and options, complex trading, and investigations of regulated entities. Additionally, the SEC is conducting programs to train hundreds of staffers to become Certified Fraud Examiners, and expanding the availability of programs for staffers to become Certified Financial Analysts.
Seeking More Resources: The SEC has been seeking additional funding to hire more examiners who can go into more financial firms to see whether they are in compliance with the law, as well as for more enforcement staff who can bring more enforcement cases when fraud and other violations of the law are found. In recent years, the SEC has not had adequate resources to oversee the securities industry. For example, the SEC has just over 400 people in its exam program to examine the more than 11,000 regulated investment advisers and 8,000 mutual funds.
Integrating Broker-Dealer and Investment Adviser Examinations: The New York Regional Office has adopted a protocol that will integrate examination teams to make sure people with the right skill sets are assigned to examinations. Under the new protocol, a single team of examiners, drawn from the broker-dealer and investment managements units, will jointly examine selected firms to ensure that the examination team includes those most expert in the subject of the exam. In addition, this initiative includes greater cross-training and coordination between broker-dealer and investment management staff on their examination plans.
Enhancing Licensing, Education and Oversight Regime for “Back-Office” Personnel: Working with senior SEC staff, FINRA has committed to establish a new system to enhance the oversight and professional requirements of personnel performing back-office functions at broker-dealer firms. “Back-office” personnel typically perform critical custody, accounting, transfer agency and account maintenance functions. They have an important role that must be performed with skill and integrity. Under the new regime, certain back-office personnel would be subject to licensing and education requirements as well as enhanced oversight. The new regime will further promote the qualifications and professionalism of those performing back office functions so that client accounts are better protected.
http://www.sec.gov/spotlight/secpostmadoffreforms.htm
Thanks to Jay B. Gould, Partner, Pillsbury Winthrop Shaw Pittman LLP.
In the wake of the Madoff fraud, the SEC’s Office of the Inspector General launched an internal investigation in December 2008 to determine why the agency did not detect the scheme. While awaiting the report, the SEC has been taking decisive and comprehensive steps to reduce the chances that such frauds will occur or be undetected in the future.
Safeguarding Investors’ Assets: The SEC in May proposed two rules that would better protect clients of investment advisers from theft and abuse. The rules would provide assurance to these clients that their accounts contain the funds that their investment adviser and account statements say they contain. Among other things, the rules would encourage investment advisers to place their clients’ assets in the custody of an independent firm.
Surprise Exams: One proposal would require all investment advisers who control or have custody of their clients’ assets to hire an independent public accountant to conduct an annual “surprise exam” to verify those assets actually exist. This surprise examination would provide another set of eyes on the clients’ assets, thereby offering additional protection against the theft or misuse of funds.
Third Party Reviews: A second proposal would apply to investment advisers who do not use independent firms to maintain their clients’ assets. Such advisers would be required to obtain a third party written report assessing the safeguards that protect the clients’ assets. The report — prepared by an accountant registered and inspected by the Public Company Accounting Oversight Board — would, among other things, describe the controls that are in place to protect the assets, the tests performed on the controls, and the results of those tests. Existing rules make no distinction between an investment adviser whose affiliate holds its clients’ funds and an investment adviser that uses a truly independent custodian.
Revitalizing the Enforcement Division: Under the leadership of a new Enforcement Director, the SEC is restructuring the division to better ensure that it focuses on significant cases that will have a meaningful impact. The restructuring will reduce bureaucracy and speed up the enforcement process by removing a layer of management in the 1,100 person division. The newly structured division will include specialized units that will enable staff in those units to concentrate their expertise in focused areas and help detect patterns, links, trends and motives. In addition, the Division is streamlining internal processes to make investigative procedures more efficient.
Revamping the Handling of Complaints and Tips: In order to improve the handling of hundreds of thousands of complaints, tips, and referrals it receives each year, the SEC has contracted with Mitre, a federally funded research and development center, to help the agency revamp its processes across the agency. After reviewing and analyzing its intake procedures, the SEC is now beginning to improve upon its processes for collecting, recording, investigating, referring and tracking this information. Among other things, the agency is creating a centralized system for handling this information. Once the information and processes are centralized, the agency will apply risk analytics to better enable it to reveal links, trends, statistical deviations and patterns that might not be observable when each complaint is examined one at a time.
Advocating for a Whistleblower Program: The SEC has advocated for expanded authority from Congress to reward whistleblowers who bring forward substantial evidence to the agency about significant federal securities violations. In proposed legislation that the Chairman sent to Congress, a fund would be established to pay whistleblowers using money collected from wrongdoers that is not otherwise distributed to investors.
Conducting Risk-Based Examinations of Financial Firms: The SEC has dispatched its examiners to conduct a “sweep” of firms that present certain risk characteristics to ensure, among other things, that the clients’ assets in fact exist. Such risks include advisers whose clients’ assets are held with an affiliate, as opposed to an independent entity; hedge funds that seem to have “smooth” or outlier returns; firms that use an unknown auditor or no auditor at all; firms with a disciplinary history; and broker-dealers that sell an affiliate’s hedge fund or limited partnership.
Increasing Focus on Agency-Wide Risk Assessment: The SEC is assessing and improving the use of risk assessment techniques, agency-wide, to more proactively identify areas of risk to investors. The agency is increasing collaboration with third parties and other government agencies to identify firms or products that may pose risk to investors or markets. The agency is also improving our ability to monitor the industry — by identifying the data and information that financial firms would submit to the SEC — to allow it to better identify those particular firms that warrant a closer look by examiners and enforcement staff.
Improving Fraud Detection Techniques for Examiners: The SEC instituted measures to improve the ability of examiners to detect fraud and other types of violations. The measures include more rigorous reviews of firms before the examiners enter the premises, and a more complete exam guide that focuses not only on obvious signs of fraud but also more subtle signals that deserve closer inspection, such as a firm using an unknown accountant. The measures also include increased checks on outside entities to verify that assets actually exist there and expanded use of exams of an entire entity when firms have joint or dual registrants such as affiliated broker-dealers and investment advisers.
Recruiting Staff with Specialized Experience: The SEC is working to bring in new staff with diverse skill sets to expand its knowledge base and improve its ability to assess risk, conduct examinations, detect and investigate wrongdoing, and focus our priorities. Some initial examples included:
Senior Specialized Examiners: The agency is hiring new staffers to the examination unit who have specialized experience in areas such as trading, operations, portfolio management, options, compliance, valuation, new instruments and portfolio strategies, and forensic accounting.
Industry and Market Fellows Program: The agency is hiring new staffers who are highly-seasoned financial experts to keep pace with the practices of Wall Street and protect investors. These experts would provide other staffers with new information and perspectives to help them identify emerging issues and understand the ways the industry is changing.
Expanding and Targeting Training: The SEC is providing its staff with targeted training related to hedge funds and specialized products, derivatives and options, complex trading, and investigations of regulated entities. Additionally, the SEC is conducting programs to train hundreds of staffers to become Certified Fraud Examiners, and expanding the availability of programs for staffers to become Certified Financial Analysts.
Seeking More Resources: The SEC has been seeking additional funding to hire more examiners who can go into more financial firms to see whether they are in compliance with the law, as well as for more enforcement staff who can bring more enforcement cases when fraud and other violations of the law are found. In recent years, the SEC has not had adequate resources to oversee the securities industry. For example, the SEC has just over 400 people in its exam program to examine the more than 11,000 regulated investment advisers and 8,000 mutual funds.
Integrating Broker-Dealer and Investment Adviser Examinations: The New York Regional Office has adopted a protocol that will integrate examination teams to make sure people with the right skill sets are assigned to examinations. Under the new protocol, a single team of examiners, drawn from the broker-dealer and investment managements units, will jointly examine selected firms to ensure that the examination team includes those most expert in the subject of the exam. In addition, this initiative includes greater cross-training and coordination between broker-dealer and investment management staff on their examination plans.
Enhancing Licensing, Education and Oversight Regime for “Back-Office” Personnel: Working with senior SEC staff, FINRA has committed to establish a new system to enhance the oversight and professional requirements of personnel performing back-office functions at broker-dealer firms. “Back-office” personnel typically perform critical custody, accounting, transfer agency and account maintenance functions. They have an important role that must be performed with skill and integrity. Under the new regime, certain back-office personnel would be subject to licensing and education requirements as well as enhanced oversight. The new regime will further promote the qualifications and professionalism of those performing back office functions so that client accounts are better protected.
http://www.sec.gov/spotlight/secpostmadoffreforms.htm
Thanks to Jay B. Gould, Partner, Pillsbury Winthrop Shaw Pittman LLP.
2 Sept 2009
Hedge Fund FII Named to Inc. 500/5000 List
Hedge fund firm, Financial Investments Inc. (FII), is to be recognized as one of the 500/5000 winners to be honored at a special event in Washington, the hedge fund will also be featured in the September issue of Inc. magazine.
The Inc. 500 celebrates the fastest-growing private companies in America. FII is a Herndon, Virginia-based Alternative financial investment management firm that has recently garnered national recognition for its growth and outstanding performance. Companies that qualify for the Inc. 500 must have a sales history of four or more years and annual revenues of at least $2 million in 2008.
FII has also been recognized by Virginia Business Magazine as a regional semi-finalist for its Small Business Success Story of the Year. In 2008 and 2009, the Virginia Chamber of Commerce also named FII to their "Fantastic 50" list of the state's 50 fastest growing companies.
"FII was founded in 1997, and has achieved annual revenue growth in excess of 40% each year for the last four years," said Craig Kendall, President and CEO. "Our customer focus and disciplined approach to investments with commodities, equities and equity indexes has resulted in consistent commendable returns for our institutional and private investors. Time and again we have exceeded returns to investors in excess of the S & P 500 during this year's volatile market," he added.
This is the second year that FII has been recognized in the Inc 500/5000 awards program. "FII continued with its growth and improvement of services all during the recent meltdown that the financial markets have experienced. A feat that we are most proud of", stated Kendall.
FII evolved from the original accounting firm of Kendall & Company, CPA's. In 2005, FII created Financial Commodity Investments (FCI) to provide products and services relating to commodity markets. As of July, 2009, the FCI products have generated net positive YTD returns in excess of 20% to investors. In August, 2009 the FCI alternative investment products were also recognized and ranked as one of the top Top Commodity Trading Advisors, CTA's for five year returns as tracked and reported by Barclays in their Barclay Managed Funds Report.
The Inc. 500 celebrates the fastest-growing private companies in America. FII is a Herndon, Virginia-based Alternative financial investment management firm that has recently garnered national recognition for its growth and outstanding performance. Companies that qualify for the Inc. 500 must have a sales history of four or more years and annual revenues of at least $2 million in 2008.
FII has also been recognized by Virginia Business Magazine as a regional semi-finalist for its Small Business Success Story of the Year. In 2008 and 2009, the Virginia Chamber of Commerce also named FII to their "Fantastic 50" list of the state's 50 fastest growing companies.
"FII was founded in 1997, and has achieved annual revenue growth in excess of 40% each year for the last four years," said Craig Kendall, President and CEO. "Our customer focus and disciplined approach to investments with commodities, equities and equity indexes has resulted in consistent commendable returns for our institutional and private investors. Time and again we have exceeded returns to investors in excess of the S & P 500 during this year's volatile market," he added.
This is the second year that FII has been recognized in the Inc 500/5000 awards program. "FII continued with its growth and improvement of services all during the recent meltdown that the financial markets have experienced. A feat that we are most proud of", stated Kendall.
FII evolved from the original accounting firm of Kendall & Company, CPA's. In 2005, FII created Financial Commodity Investments (FCI) to provide products and services relating to commodity markets. As of July, 2009, the FCI products have generated net positive YTD returns in excess of 20% to investors. In August, 2009 the FCI alternative investment products were also recognized and ranked as one of the top Top Commodity Trading Advisors, CTA's for five year returns as tracked and reported by Barclays in their Barclay Managed Funds Report.
Edinburgh Firm Expands Hedge Fund Business
Specialist active equity manager, Martin Currie Investment Management Limited, has expanded its global hedge fund arm with two senior hires, Alastair Barrie and Clayton Cheek.
Barrie joins in the newly created role of global head of hedge fund sales and Cheek joins as US head of hedge fund sales. Both bring with them extensive business development experience and join existing sales director, Mike Gibb.
Alastair pereviously worked at RBS where he was director of institutional business. In this new position he will be responsible for growing their global hedge fund business. Prior to RBS Alastair was director of global hedge fund sales and UK wholesale distribution at Henderson.
Clayton joins Martin Currie’s office in New York. Previously he worked for Man Investments in New York where he was head of institutional sales for the US. Prior to Man, he was managing director, head of client development Americas for Ivy Asset Management.
"We are thrilled that Alastair and Clayton are joining our successful and growing hedge fund business." Allan MacLeod, managing director of sales, marketing and client service at Martin Currie said, "Our hedge fund business is now over nine years old and has over US$1 billion under management across ten funds. It is a clear reflection on the quality of our business that we have been able to attract such high calibre professionals."
Martin Currie manages £10.7 billion ($18 billion) for clients worldwide, with $1.2 billion of that in absolute return funds.
Barrie joins in the newly created role of global head of hedge fund sales and Cheek joins as US head of hedge fund sales. Both bring with them extensive business development experience and join existing sales director, Mike Gibb.
Alastair pereviously worked at RBS where he was director of institutional business. In this new position he will be responsible for growing their global hedge fund business. Prior to RBS Alastair was director of global hedge fund sales and UK wholesale distribution at Henderson.
Clayton joins Martin Currie’s office in New York. Previously he worked for Man Investments in New York where he was head of institutional sales for the US. Prior to Man, he was managing director, head of client development Americas for Ivy Asset Management.
"We are thrilled that Alastair and Clayton are joining our successful and growing hedge fund business." Allan MacLeod, managing director of sales, marketing and client service at Martin Currie said, "Our hedge fund business is now over nine years old and has over US$1 billion under management across ten funds. It is a clear reflection on the quality of our business that we have been able to attract such high calibre professionals."
Martin Currie manages £10.7 billion ($18 billion) for clients worldwide, with $1.2 billion of that in absolute return funds.
1 Sept 2009
Castle Hall Alternatives Publishes White Paper on Hedge Fund Operational Failures
Hedge fund operational due diligence provider, Castle Hall Alternatives, published its latest White Paper, ‘From Manhattan to Madoff: the Causes and Lessons of Hedge Fund Operational Failure.’
The Paper’s analysis and findings are based on HedgeEvent, a comprehensive, web-based database of more than 300 operational events, now available to Castle Hall’s due diligence clients. HedgeEvent supplements HedgeDiligence, the firm’s existing client web portal.
Chris Addy, Castle Hall’s CEO, said “the colossal fraud perpetrated by Bernie Madoff, together with a number of other recent cases, has made investors acutely concerned by the risk of operational ‘blow ups’. However, there has been little systematic study of operational failure, meaning that investors have limited guidance as to the extent of this problem.”
“The creation of HedgeEvent, which has taken more than two years to compile, has enabled us to summarize key metrics related to hedge fund operational failure” said Addy. “From Manhattan to Madoff analyzes operational events by number, estimated loss, causal factor and by the strategy of the funds involved.”
HedgeEvent contains 327 cases of hedge fund operational failure through June 30, 2009. Madoff, with an estimated financial impact of $64 billion, is by far the largest; the remaining cases have an aggregate estimated financial impact of approximately $15 billion. Of the 327 operational events, 121 have an estimated impact of $10 million or more, and 31 of at least $100 million.
“While operational failures are material – Madoff spectacularly so – it does not seem that fraud is pervasive in the hedge fund industry” said Addy. “Investors should, however, be very focused on the lessons which can be learned from those hedge funds which did generate large losses. Many of these were well established firms which attracted capital from reputable investors.”
Across all Events, the most common causes of operational failure are theft and misappropriation followed by existence of assets (the manager claimed to own fake securities or operated a Ponzi scheme where reported assets did not exist). The most common strategies subject to operational failure are long / short equity followed by managed futures. It is notable that investors have traditionally viewed these strategies, holding largely exchange-traded securities, as straightforward with low operational risk.
The Paper’s analysis and findings are based on HedgeEvent, a comprehensive, web-based database of more than 300 operational events, now available to Castle Hall’s due diligence clients. HedgeEvent supplements HedgeDiligence, the firm’s existing client web portal.
Chris Addy, Castle Hall’s CEO, said “the colossal fraud perpetrated by Bernie Madoff, together with a number of other recent cases, has made investors acutely concerned by the risk of operational ‘blow ups’. However, there has been little systematic study of operational failure, meaning that investors have limited guidance as to the extent of this problem.”
“The creation of HedgeEvent, which has taken more than two years to compile, has enabled us to summarize key metrics related to hedge fund operational failure” said Addy. “From Manhattan to Madoff analyzes operational events by number, estimated loss, causal factor and by the strategy of the funds involved.”
HedgeEvent contains 327 cases of hedge fund operational failure through June 30, 2009. Madoff, with an estimated financial impact of $64 billion, is by far the largest; the remaining cases have an aggregate estimated financial impact of approximately $15 billion. Of the 327 operational events, 121 have an estimated impact of $10 million or more, and 31 of at least $100 million.
“While operational failures are material – Madoff spectacularly so – it does not seem that fraud is pervasive in the hedge fund industry” said Addy. “Investors should, however, be very focused on the lessons which can be learned from those hedge funds which did generate large losses. Many of these were well established firms which attracted capital from reputable investors.”
Across all Events, the most common causes of operational failure are theft and misappropriation followed by existence of assets (the manager claimed to own fake securities or operated a Ponzi scheme where reported assets did not exist). The most common strategies subject to operational failure are long / short equity followed by managed futures. It is notable that investors have traditionally viewed these strategies, holding largely exchange-traded securities, as straightforward with low operational risk.
31 Aug 2009
Bluenose Launches Capital Market Neutral Hedge Fund
Hedge fund manager, Bluenose Capital Management Ltd. is launching the Bluenose Capital Market Neutral Fund, aimed at accredited and professional investors.
Going live on October 1st, 2009, the new fund will employ a proprietary factor-based approach to trade highly liquid US & Canadian equities, according to a letter to investors obtained by HedgeCo.
"We strive to generate a 15% annual compound return with less volatility than the S&P/TSX and S&P500 with almost no correlation to the benchmarks," the fund manager said. "Our goal is to achieve absolute returns regardless of market conditions by combining US and Canadian equity market neutral and opportunistic trading strategies. Preservation of capital is of utmost importance." Bluenose said that potential investors should see an investment horizon of at least 5 years.
Bluenose is in September conducting meetings in 13 cities globaly from New York and Irvine to Milan and London.
Their projected timeline for the investment vehicles:
Years 1-3: Live trading of factor-based market neutral strategy: Bluenose Capital
Market Neutral Fund.
Estimated max capacity: $350M.
Years: 3-5: Deployment of statistical arbitrage strategy: Bluenose Star.
Estimated max capacity: $250M.
Year 7: Launch of the convertible arbitrage strategy: Bluenose Converts.
Estimated max capacity: $200M.
Bluenose Capital Ltd. is registered with the British Virgin Islands Financial Services Commission as a Professional Fund under the 1996 Mutual Funds Act.
Going live on October 1st, 2009, the new fund will employ a proprietary factor-based approach to trade highly liquid US & Canadian equities, according to a letter to investors obtained by HedgeCo.
"We strive to generate a 15% annual compound return with less volatility than the S&P/TSX and S&P500 with almost no correlation to the benchmarks," the fund manager said. "Our goal is to achieve absolute returns regardless of market conditions by combining US and Canadian equity market neutral and opportunistic trading strategies. Preservation of capital is of utmost importance." Bluenose said that potential investors should see an investment horizon of at least 5 years.
Bluenose is in September conducting meetings in 13 cities globaly from New York and Irvine to Milan and London.
Their projected timeline for the investment vehicles:
Years 1-3: Live trading of factor-based market neutral strategy: Bluenose Capital
Market Neutral Fund.
Estimated max capacity: $350M.
Years: 3-5: Deployment of statistical arbitrage strategy: Bluenose Star.
Estimated max capacity: $250M.
Year 7: Launch of the convertible arbitrage strategy: Bluenose Converts.
Estimated max capacity: $200M.
Bluenose Capital Ltd. is registered with the British Virgin Islands Financial Services Commission as a Professional Fund under the 1996 Mutual Funds Act.
29 Aug 2009
US Economic Policy as Boost for Hedge Funds - Report
US Economic policy continues to sway the global marketplace, says Global Hedge Fund Group Ltd. (GHF), this has been to the benefit of its hedge funds, and the life insurance settlement fund in particular.
Global Economic data is improving, GHF said, but is still being hampered by a weak housing market. Oil prices are rising again as tension in the Middle East continues. The Obama administration is tabling alternative energy initiatives. Healthcare reform has become a major issue, but many questions remain as to how far reform will go and what portions of the economy may be effected. Potential increased regulation within the financial industry and securities markets can be expected to have a wide-ranging impact on investment opportunities.
“All these factors underpin the continued trend of investors turning to our hedge funds. Our invested assets have grown more in the first half of 2009 than the last three years” said Jeremy Long, GHF Group Economic Analyst.
“There is so much uncertainty in the traditional equity markets. Brief periods of good news are still punctuated with minor corrections. Investors are asking tougher questions and looking for better solutions. These investors make up the majority of our new clients in the last two years.” Said Long.
Global Economic data is improving, GHF said, but is still being hampered by a weak housing market. Oil prices are rising again as tension in the Middle East continues. The Obama administration is tabling alternative energy initiatives. Healthcare reform has become a major issue, but many questions remain as to how far reform will go and what portions of the economy may be effected. Potential increased regulation within the financial industry and securities markets can be expected to have a wide-ranging impact on investment opportunities.
“All these factors underpin the continued trend of investors turning to our hedge funds. Our invested assets have grown more in the first half of 2009 than the last three years” said Jeremy Long, GHF Group Economic Analyst.
“There is so much uncertainty in the traditional equity markets. Brief periods of good news are still punctuated with minor corrections. Investors are asking tougher questions and looking for better solutions. These investors make up the majority of our new clients in the last two years.” Said Long.
28 Aug 2009
GAIM Launches Not-For-Profit Hedge Fund Series
Hedge fund events and information group, GAIM, has launched its first not-for-profit business breakfast briefing session.
In an effort to connect the alternative investment community with up to date information and contact with investors and peers in the industry, GAIM said the session would be the first in a series of breakfast seminars offering senior members of the hedge fund community the opportunity to stay connected between the GAIM flagship events that take place throughout the year.
The first meeting is scheduled for September 22, 2009 in New York at the Omni Berkshire, titled: 'Where the Market Opportunities Will Be and How to Avoid Pitfalls Putting Capital to Work in the Fall'
Speakers include; Ken Akoundi, Head of Pension Strategies, North America, Deutsch Bank Securities Inc, Greggory White, Trustee, Howard University, Jose F. Gonzalez-Heres, Managing Director, Fund of Hedge Funds portfolios and a member of the Investment Committee, Morgan Stanley Alternative Investment Partners.
In an effort to connect the alternative investment community with up to date information and contact with investors and peers in the industry, GAIM said the session would be the first in a series of breakfast seminars offering senior members of the hedge fund community the opportunity to stay connected between the GAIM flagship events that take place throughout the year.
The first meeting is scheduled for September 22, 2009 in New York at the Omni Berkshire, titled: 'Where the Market Opportunities Will Be and How to Avoid Pitfalls Putting Capital to Work in the Fall'
Speakers include; Ken Akoundi, Head of Pension Strategies, North America, Deutsch Bank Securities Inc, Greggory White, Trustee, Howard University, Jose F. Gonzalez-Heres, Managing Director, Fund of Hedge Funds portfolios and a member of the Investment Committee, Morgan Stanley Alternative Investment Partners.
27 Aug 2009
Rabbe Ekholm launches independent hedge fund replicator
Rabbe Ekholm, founder and CEO of True Beta LLC announced the launch of TrueBetaD and is holding a discussion on the importance of hedge fund replication strategies in New York September 15th.
"Institutional investors are reconsidering their traditional investment processes as hedge funds outperformed other asset classes last year, often by wide margins." Ekholm said, "At the same time investors now require greater transparency, risk control and liquidity from their hedge fund investments. They also increasingly want to distinguish between hedge fund alpha and beta."
Ekholm was until recently Chief Commercial Officer and a Member of the Management Board of Saxo Bank, prior to that he was a Managing Director at MSCI Barra, heading its Content Solutions Group.
"This demand is strengthening the important role replication strategies play in the investment process. These strategies allow investors access to hedge fund-like returns with cost effective fees, liquidity, transparency and without the headline risk of manager blow-ups or gates," he concluded.
The conference is scheduled to be held at the Walek & Associates Conference Room, 317 Madison Avenue @ 42nd Street, New York, NY.
TrueBeta LLC develops and markets quantitative financial strategies for institutional clients. Hedge fund replication is its lead offering. TrueBeta is based in Greenwich, Connecticut, USA.
"Institutional investors are reconsidering their traditional investment processes as hedge funds outperformed other asset classes last year, often by wide margins." Ekholm said, "At the same time investors now require greater transparency, risk control and liquidity from their hedge fund investments. They also increasingly want to distinguish between hedge fund alpha and beta."
Ekholm was until recently Chief Commercial Officer and a Member of the Management Board of Saxo Bank, prior to that he was a Managing Director at MSCI Barra, heading its Content Solutions Group.
"This demand is strengthening the important role replication strategies play in the investment process. These strategies allow investors access to hedge fund-like returns with cost effective fees, liquidity, transparency and without the headline risk of manager blow-ups or gates," he concluded.
The conference is scheduled to be held at the Walek & Associates Conference Room, 317 Madison Avenue @ 42nd Street, New York, NY.
TrueBeta LLC develops and markets quantitative financial strategies for institutional clients. Hedge fund replication is its lead offering. TrueBeta is based in Greenwich, Connecticut, USA.
26 Aug 2009
HedgeSphere Launches Software for Funds of Hedge Funds
Funds of hedge funds tech. provider Infonic AG, released the latest version of its software suite for FoHFs, HedgeSphere 4.3.
“For many funds of hedge funds, including those with complex portfolio structures, management and incentive fees are still calculated manually - a time consuming and error-prone process. This is an area of supreme client sensitivity, being the primary source of revenue for the management function and a major factor in liability and credibility in administration. HedgeSphere PAD 4.3 provides advanced automation to simplify and streamline the fee calculation process, providing near-real time availability, improving accuracy and transparency over fees and their attribution to investors,” said Thomas Furrer, Infonic AG’s CEO. “On the front and middle office side, HedgeSphere MO 4.3 provides tools to improve trading workflow and the exchange of information among portfolio managers, as well as enhanced equity exposure analysis.”
In this latest release, HedgeSphere provides enhanced capabilities for the calculation and processing of investor fees, including: in-advance fee calculations, automated fee crystallization and investor equalization tracking. In addition, HedgeSphere PAD now supports natural hedging and provides real-time views of cash available across accounting entities. Version 4.3 of HedgeSphere MO provides improved trading workflow and exchange of information among portfolio managers, as well as enhanced equity exposure analysis.
Headquartered in Switzerland, and with offices in Zug, Zurich and New York, Infonic AG is the provider of HedgeSphere, the leading product suite for operations of Funds of Hedge Funds. Its HedgeSphere product range debuted in 1999 and has been adopted by the largest and most innovative funds of hedge funds asset managers and administrators in the industry.
“For many funds of hedge funds, including those with complex portfolio structures, management and incentive fees are still calculated manually - a time consuming and error-prone process. This is an area of supreme client sensitivity, being the primary source of revenue for the management function and a major factor in liability and credibility in administration. HedgeSphere PAD 4.3 provides advanced automation to simplify and streamline the fee calculation process, providing near-real time availability, improving accuracy and transparency over fees and their attribution to investors,” said Thomas Furrer, Infonic AG’s CEO. “On the front and middle office side, HedgeSphere MO 4.3 provides tools to improve trading workflow and the exchange of information among portfolio managers, as well as enhanced equity exposure analysis.”
In this latest release, HedgeSphere provides enhanced capabilities for the calculation and processing of investor fees, including: in-advance fee calculations, automated fee crystallization and investor equalization tracking. In addition, HedgeSphere PAD now supports natural hedging and provides real-time views of cash available across accounting entities. Version 4.3 of HedgeSphere MO provides improved trading workflow and exchange of information among portfolio managers, as well as enhanced equity exposure analysis.
Headquartered in Switzerland, and with offices in Zug, Zurich and New York, Infonic AG is the provider of HedgeSphere, the leading product suite for operations of Funds of Hedge Funds. Its HedgeSphere product range debuted in 1999 and has been adopted by the largest and most innovative funds of hedge funds asset managers and administrators in the industry.
Hedge Fund Rankings Released
The Hedge Fund Journal’s Funds of Hedge Funds GLOBAL50, produced in association with Newedge Prime Brokerage Group, reports that minus a few exceptions, funds were happy to participate in the survey and submitted their assets under management figures as at 30th June 2009, which goes some way to prove that funds are taking the issue of transparency more seriously. Those funds that declined to participate have been given estimates based on a variety of data and industry sources.
In responding to the survey, many funds wanted to emphasise that liquidity terms were often the key to how a firm had been able to retain assets, the Journal reports. Those funds with more generous liquidity terms believed, rightly, that they were victims of what is now aptly-called the ‘ATM effect’.
The data shows that between 30th September 2008 and 30th June 2009, over $200 billion was withdrawn from the top 50 funds. Most funds lost an average of between 25% - 30% of their assets under management. However, UBS Alternative and Quantitative Investments remains in pole position, despite losing over 33% of its assets: at 30th June, 2009 assets under management stood at $31.4 billion (down from $46.6 billion in September 2008).
The top 50 funds are certainly managing less, but they are not out of the game. Smaller funds, of course, are facing an even tougher time. Chicago-based Hedge Fund Research (HFR) has reported that over 200 funds of hedge funds liquidated in 2009. This is a significant increase on the last quarter and represents an annual attrition rate of over 8%; nearly double the previous record set in Q4 2008. Falling assets and rising costs due to heightened due diligence and compliance demands from investors will continue to have a strong impact on the business viability of smaller funds.
Hitting rock bottom
The crisis has raised some important questions. Having grown at more than 20% a year between 2000 and 2008, the reversal in fortunes has come as a shock to many within the industry. At their peak, assets under management for funds of hedge funds reached $825 billion according to HFR, but by the end of Q2 2009, assets in the sector had dropped to $530 billion. Importantly, that marked a $5 billion gain from 31st March 2009 and may indicate that redemptions have bottomed out.
But is the fund of hedge funds industry a victim of circumstance or is it a flawed business model? The connection between the Madoff scandal and the industry was unfortunate, if not unfair, (although, some notable funds of hedge funds had invested with Madoff) and as investors sought to retrieve money where possible, it was inevitable that funds of hedge funds would be called upon. “What we have seen is the latest phase of an evolutionary process,” says Permal’s Roberto Giuffrida, Senior Vice President, Regional Director Europe. “Since hedge funds first emerged 60 years ago, there have been three waves of growth and decline, and we are fully expecting to see the fourth wave of growth over the next few years.”
But without doubt there are weaknesses within the model. One major area of weakness is the asset liability mismatch. Funds of hedge funds have traditionally managed their portfolios with a mismatch between portfolio liquidity and terms offered to investors. In the event of a sudden rush of redemptions, funds had a credit facility to bridge the two. In reality, this system proved to be wholly unreliable. Funds were unable to meet the redemption requests and were forced to impose gates.
Adapt or die
Issues such as alignment between investors and managers in terms of fees and investment objectives as well as transparency and the due diligence process are also areas where practices are being reviewed and changed. In the current environment investors are able to affect changes and do not have to settle for second best.
But despite the recriminations, in relative terms, hedge fund investment held up well during the crisis. For example, in 2008 the Hennessee Hedge Fund Index and the Barclay Hedge Index fell 22.42% and 21.63% respectively, while the S&P 500 slid 38.49% and the NASDAQ plunged 40.54%. “The fact that hedge fund indices outperformed the long only indices proves that hedge funds offer the downside protection. And in 2009 we are seeing investor allocations into hedge funds and funds of hedge funds,” explains Optima Managing Director, Graham Martin.
Data clearly shows the rate of redemptions is slowing. They were lower during Q1 2009 than in Q4 2008 according to Standard and Poor’s and they were lower still in the second quarter of 2009. HFR notes that in the last year, funds of hedge funds have dropped fees by three basis points to 1.25%. There is also evidence which suggests that funds with lower management fees outperformed the funds with higher fees, although the data on this is fragmentary. What’s more, liquidity profiles are improving: funds have reduced leverage and many are showing positive cash balances.
Could this be the nadir for the industry? HFR, BNY Mellon and Casey Quirk believe so. Many managers and not a few studies are projecting that assets will grow further in the second half of this year. And regardless of the industry setbacks, funds of funds will continue to be a major channel into single manager hedge funds. But Craig Stevenson, Senior Investment Consultant, Watson Wyatt believes that while funds of hedge funds will stage a comeback, they will face increased competition from single manager funds. He attributes this to the fact that before the crisis, funds of funds could offer capacity to those funds that were closed. The current state of the industry means that single managers are looking to build their own portfolio of institutional assets and virtually all funds, even the most successful, are now open.
Clearly, investors who have less resources and alternative asset experience will continue to invest through funds of hedge funds. “Allocating to hedge funds is a good way of diversifying portfolios and with funds of funds on a base fee for the foreseeable future they are as cheap as they have ever been,” says Stevenson. The business model may indeed be more sound than was thought six months ago since with time investors will return. But some funds that stretched the goodwill of investors may find it is difficult to be fully forgiven.
You can access the Global 50 by clicking on the link below:
http://www.thehedgefundjournal.com/magazine/200908/research/global-50-funds-of-hedge-funds.php
The Global 50 is a listing of the largest funds of hedge funds groups ranked by AUM as at 30 June 2009.
In responding to the survey, many funds wanted to emphasise that liquidity terms were often the key to how a firm had been able to retain assets, the Journal reports. Those funds with more generous liquidity terms believed, rightly, that they were victims of what is now aptly-called the ‘ATM effect’.
The data shows that between 30th September 2008 and 30th June 2009, over $200 billion was withdrawn from the top 50 funds. Most funds lost an average of between 25% - 30% of their assets under management. However, UBS Alternative and Quantitative Investments remains in pole position, despite losing over 33% of its assets: at 30th June, 2009 assets under management stood at $31.4 billion (down from $46.6 billion in September 2008).
The top 50 funds are certainly managing less, but they are not out of the game. Smaller funds, of course, are facing an even tougher time. Chicago-based Hedge Fund Research (HFR) has reported that over 200 funds of hedge funds liquidated in 2009. This is a significant increase on the last quarter and represents an annual attrition rate of over 8%; nearly double the previous record set in Q4 2008. Falling assets and rising costs due to heightened due diligence and compliance demands from investors will continue to have a strong impact on the business viability of smaller funds.
Hitting rock bottom
The crisis has raised some important questions. Having grown at more than 20% a year between 2000 and 2008, the reversal in fortunes has come as a shock to many within the industry. At their peak, assets under management for funds of hedge funds reached $825 billion according to HFR, but by the end of Q2 2009, assets in the sector had dropped to $530 billion. Importantly, that marked a $5 billion gain from 31st March 2009 and may indicate that redemptions have bottomed out.
But is the fund of hedge funds industry a victim of circumstance or is it a flawed business model? The connection between the Madoff scandal and the industry was unfortunate, if not unfair, (although, some notable funds of hedge funds had invested with Madoff) and as investors sought to retrieve money where possible, it was inevitable that funds of hedge funds would be called upon. “What we have seen is the latest phase of an evolutionary process,” says Permal’s Roberto Giuffrida, Senior Vice President, Regional Director Europe. “Since hedge funds first emerged 60 years ago, there have been three waves of growth and decline, and we are fully expecting to see the fourth wave of growth over the next few years.”
But without doubt there are weaknesses within the model. One major area of weakness is the asset liability mismatch. Funds of hedge funds have traditionally managed their portfolios with a mismatch between portfolio liquidity and terms offered to investors. In the event of a sudden rush of redemptions, funds had a credit facility to bridge the two. In reality, this system proved to be wholly unreliable. Funds were unable to meet the redemption requests and were forced to impose gates.
Adapt or die
Issues such as alignment between investors and managers in terms of fees and investment objectives as well as transparency and the due diligence process are also areas where practices are being reviewed and changed. In the current environment investors are able to affect changes and do not have to settle for second best.
But despite the recriminations, in relative terms, hedge fund investment held up well during the crisis. For example, in 2008 the Hennessee Hedge Fund Index and the Barclay Hedge Index fell 22.42% and 21.63% respectively, while the S&P 500 slid 38.49% and the NASDAQ plunged 40.54%. “The fact that hedge fund indices outperformed the long only indices proves that hedge funds offer the downside protection. And in 2009 we are seeing investor allocations into hedge funds and funds of hedge funds,” explains Optima Managing Director, Graham Martin.
Data clearly shows the rate of redemptions is slowing. They were lower during Q1 2009 than in Q4 2008 according to Standard and Poor’s and they were lower still in the second quarter of 2009. HFR notes that in the last year, funds of hedge funds have dropped fees by three basis points to 1.25%. There is also evidence which suggests that funds with lower management fees outperformed the funds with higher fees, although the data on this is fragmentary. What’s more, liquidity profiles are improving: funds have reduced leverage and many are showing positive cash balances.
Could this be the nadir for the industry? HFR, BNY Mellon and Casey Quirk believe so. Many managers and not a few studies are projecting that assets will grow further in the second half of this year. And regardless of the industry setbacks, funds of funds will continue to be a major channel into single manager hedge funds. But Craig Stevenson, Senior Investment Consultant, Watson Wyatt believes that while funds of hedge funds will stage a comeback, they will face increased competition from single manager funds. He attributes this to the fact that before the crisis, funds of funds could offer capacity to those funds that were closed. The current state of the industry means that single managers are looking to build their own portfolio of institutional assets and virtually all funds, even the most successful, are now open.
Clearly, investors who have less resources and alternative asset experience will continue to invest through funds of hedge funds. “Allocating to hedge funds is a good way of diversifying portfolios and with funds of funds on a base fee for the foreseeable future they are as cheap as they have ever been,” says Stevenson. The business model may indeed be more sound than was thought six months ago since with time investors will return. But some funds that stretched the goodwill of investors may find it is difficult to be fully forgiven.
You can access the Global 50 by clicking on the link below:
http://www.thehedgefundjournal.com/magazine/200908/research/global-50-funds-of-hedge-funds.php
The Global 50 is a listing of the largest funds of hedge funds groups ranked by AUM as at 30 June 2009.
Deutsche Bank Ranked Second in Hedge Fund Administration Survey
Deutsche Bank's Alternative Fund Services, part of the bank's Global Transaction Banking (GTB) division, has ranked second among top administrators in Global Custodian magazine’s 2009 Hedge Fund Administration Survey.
This is the first time Deutsche Bank has participated in the survey, which is published annually and includes responses from 1,370 clients of hedge fund administrators around the globe. It is intended to measure service quality and value in 12 categories including client service, fund accounting and middle office services, across a full range of fund characteristics such as size, strategy and location.
“In our first appearance in the Hedge Fund Administration Survey we are very pleased to have ranked second and scored highly in a range of categories,” said Christopher Nero, Managing Director and co-head of Alternative Fund Services within Global Transaction Banking.
In a write-up accompanying the results, Global Custodian commented, “(GTB) has a long pedigree in hedge fund administration too, with operations scattered across Cayman, Delaware, the Channel Islands, Dublin, Luxembourg, Mauritius and Singapore. But in January last year Deutsche transformed its presence in the industry by the acquisition of California based hedge fund administrator Hedgeworks. With staff in Boston and Cayman as well as the Golden State, Hedgeworks helped Deutsche double the size of its business. As it did for the prime brokerage business, the credit standing of the bank has attracted clients.”
Last month, Deutsche Bank announced that its Global Prime Finance business within its Global Markets division received 127 “Best in Class” and 16 “Top Rated and Commended” awards, the most among all global prime brokerage providers, in the Global Custodian 2009 Prime Brokerage Survey.
This is the first time Deutsche Bank has participated in the survey, which is published annually and includes responses from 1,370 clients of hedge fund administrators around the globe. It is intended to measure service quality and value in 12 categories including client service, fund accounting and middle office services, across a full range of fund characteristics such as size, strategy and location.
“In our first appearance in the Hedge Fund Administration Survey we are very pleased to have ranked second and scored highly in a range of categories,” said Christopher Nero, Managing Director and co-head of Alternative Fund Services within Global Transaction Banking.
In a write-up accompanying the results, Global Custodian commented, “(GTB) has a long pedigree in hedge fund administration too, with operations scattered across Cayman, Delaware, the Channel Islands, Dublin, Luxembourg, Mauritius and Singapore. But in January last year Deutsche transformed its presence in the industry by the acquisition of California based hedge fund administrator Hedgeworks. With staff in Boston and Cayman as well as the Golden State, Hedgeworks helped Deutsche double the size of its business. As it did for the prime brokerage business, the credit standing of the bank has attracted clients.”
Last month, Deutsche Bank announced that its Global Prime Finance business within its Global Markets division received 127 “Best in Class” and 16 “Top Rated and Commended” awards, the most among all global prime brokerage providers, in the Global Custodian 2009 Prime Brokerage Survey.
25 Aug 2009
People Moves: Gabrielle Guttman Leaves Hedge Fund To Launch Consulting Firm
Gabrielle Guttman launched connext consulting inc. after leaving Southridge LLC, where she served as the vice president of business development and marketing of the firm and its hedge funds.
She left the company to pursue the business venture and to launch her own customer base. According to Guttman, who is president of the firm, the new firm will employ an integrated and customized approach to successfully elevate their clients’ businesses to the next level through strategic introductions, business development, marketing and public/ investor relations. Their target market will include financial institutions, professional services firms, minority-owned businesses and not-for-profit organizations.
At Southridge, Gabrielle was responsible for hedge fund marketing, public/investor relations and marketing financial products to global public companies. She previously held Business Development and Marketing roles at Kroll Inc. and Grey Group Inc. Gabrielle's financial career began at Bear, Stearns & Co. Inc. as a Corporate Finance Analyst where she helped execute equity, debt and M&A transactions across a wide range of industries.
Gabrielle graduated Magna Cum Laude from Barnard College, Columbia University. Since 2003 she has held Board and Advisory positions with Barnard Business and Professional Women, a not-for-profit alumnae organization. Throughout her career, Gabrielle has been an active volunteer and currently holds leadership positions with notable not-for-profit and philanthropic organizations focused on the financial services industry, women's initiatives and children's development.
She left the company to pursue the business venture and to launch her own customer base. According to Guttman, who is president of the firm, the new firm will employ an integrated and customized approach to successfully elevate their clients’ businesses to the next level through strategic introductions, business development, marketing and public/ investor relations. Their target market will include financial institutions, professional services firms, minority-owned businesses and not-for-profit organizations.
At Southridge, Gabrielle was responsible for hedge fund marketing, public/investor relations and marketing financial products to global public companies. She previously held Business Development and Marketing roles at Kroll Inc. and Grey Group Inc. Gabrielle's financial career began at Bear, Stearns & Co. Inc. as a Corporate Finance Analyst where she helped execute equity, debt and M&A transactions across a wide range of industries.
Gabrielle graduated Magna Cum Laude from Barnard College, Columbia University. Since 2003 she has held Board and Advisory positions with Barnard Business and Professional Women, a not-for-profit alumnae organization. Throughout her career, Gabrielle has been an active volunteer and currently holds leadership positions with notable not-for-profit and philanthropic organizations focused on the financial services industry, women's initiatives and children's development.
Offshore Hedge Fund Tax Shelter on the “White List”
West Palm Beach (HedgeCo.net) - The Organisation for Economic Cooperation and Development (OECD) added the Cayman Islands to its 'white list' of jurisdictions that implement international tax standards for investors such as hedge funds and other alternative investors.
Jeffrey Owens, Director of the OECD's Centre for Tax Policy and Administration, welcomed the signing of the Cayman Islands' twelfth Tax Information Exchange Agreement (TIEA) with New Zealand, on 13 August 2009 putting it “alongside other countries that have substantially implemented the internationally agreed tax standard.”
In response, the Cayman Islands Government summarized: “For over four decades the
Cayman Islands has steadily earned its place as a world-class international financial
services centre. The Cayman Islands Government sees the OECD's recognition as a
natural outcome of the country’s substantial commitment to uphold an equally worldclass
international cooperation regime in the exchange of tax information.”
Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Jeffrey Owens, Director of the OECD's Centre for Tax Policy and Administration, welcomed the signing of the Cayman Islands' twelfth Tax Information Exchange Agreement (TIEA) with New Zealand, on 13 August 2009 putting it “alongside other countries that have substantially implemented the internationally agreed tax standard.”
In response, the Cayman Islands Government summarized: “For over four decades the
Cayman Islands has steadily earned its place as a world-class international financial
services centre. The Cayman Islands Government sees the OECD's recognition as a
natural outcome of the country’s substantial commitment to uphold an equally worldclass
international cooperation regime in the exchange of tax information.”
Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
24 Aug 2009
Hedge Fund Brokerage Firm Updates Connectivity
Hedge fund prime broker, Newedge, has started using a Dubai Point of Presence (POP) connection to facilitate their access to the Dubai Gold & Commodity Exchange (DGCX). The new connection has high bandwidth and is more secure than an internet-based connection, the company said.
Amaury de Villemandy, CEO Newedge Europe & Middle East, commented on its fixed line capacity, saying, "Our investment in establishing direct connectivity to DGCX was based on the increased interest among our clients in capitalizing on the commodity and currency trading opportunities offered by the Exchange."
Newedge is a 50/50 joint venture between Societe Generale and Calyon. With a presence in 25 locations in 17 countries, Newedge primarily serves institutional clients, providing access to more than 85 exchanges.
Amaury de Villemandy, CEO Newedge Europe & Middle East, commented on its fixed line capacity, saying, "Our investment in establishing direct connectivity to DGCX was based on the increased interest among our clients in capitalizing on the commodity and currency trading opportunities offered by the Exchange."
Newedge is a 50/50 joint venture between Societe Generale and Calyon. With a presence in 25 locations in 17 countries, Newedge primarily serves institutional clients, providing access to more than 85 exchanges.
21 Aug 2009
TMF Acquires Sydney Boutique Fund Mgr Kingsway Taitz
International financial services provider TMF Group has expanded into boutiqe and hedge funds in Australia through the acquisition of Sydney administrator, Kingsway Taitz Fund Administration Pty Ltd, (Kingsway Taitz).
Recognised as a leading provider of boutique and hedge fund administration services in the Asia‐Pacific region, Kingsway Taitz has been top ranked in its peer group for the past two years by the annual Global Custodian Hedge Fund Administrator Survey.
"The increasing demand for our services made it apparent that the next phase of growth required the backing of a global fund administrator with strong financial resources." Brian Taitz, managing director of Kingsway Taitz said “This transaction provides the opportunity to align with a like‐minded global fund administration company that shares our values and culture."
“This transaction brings together two highly successful companies – one global and one local with complementary skills and values, and a shared focus on client service and staff development," managing directors of TMF Eric Koolen and Catherine Caradus, said. TMF has over 175 fund administration clients.
Eric Koolen, who has 20 years of fund administration experience, will lead the combined organisation in Australia. Brian Taitz will continue to be involved on a day to day basis for up to six months to ensure a seamless integration of the two organisations. The company says there will be no immediate changes.
Kingsway Taitz has retained Capital Advice as its financial adviser in relation to this transaction.
Recognised as a leading provider of boutique and hedge fund administration services in the Asia‐Pacific region, Kingsway Taitz has been top ranked in its peer group for the past two years by the annual Global Custodian Hedge Fund Administrator Survey.
"The increasing demand for our services made it apparent that the next phase of growth required the backing of a global fund administrator with strong financial resources." Brian Taitz, managing director of Kingsway Taitz said “This transaction provides the opportunity to align with a like‐minded global fund administration company that shares our values and culture."
“This transaction brings together two highly successful companies – one global and one local with complementary skills and values, and a shared focus on client service and staff development," managing directors of TMF Eric Koolen and Catherine Caradus, said. TMF has over 175 fund administration clients.
Eric Koolen, who has 20 years of fund administration experience, will lead the combined organisation in Australia. Brian Taitz will continue to be involved on a day to day basis for up to six months to ensure a seamless integration of the two organisations. The company says there will be no immediate changes.
Kingsway Taitz has retained Capital Advice as its financial adviser in relation to this transaction.
20 Aug 2009
Man invests in Hong Kong-based Minerva macro fund
Man Investments’ seeding fund, RMF Global Emerging Managers, has completed its second incubation deal of the last two months, providing a cornerstone investment of $50 million for Hong Kong’s Minerva Macro Fund.
In July RMF GEM invested $50 million in the flagship product of 5:15 Capital Management, an unrelated fixed income arbitrage manager based in Connecticut.
Minerva is managed by Stanley Ku, who founded the Hong Kong office of hedge fund Fortress Investment Group and most recently managed $750 million for Fortress’ Drawbridge Global Macro Fund. Dorothy Lau, Minerva’s risk and business manager, formerly worked for JP Morgan and Goldman Sachs.
“Stanley Ku’s work at Fortress and Goldman Sachs has made him a very well respected money manager in Asia,” said Hans Hurschler, head of Man Investments’ hedge fund Ventures. “We believe that Minerva has the potential to generate solid, stable returns and that it may attract substantial assets.”
Minerva is a discretionary global macro fund, focused on Asia. It trades only highly liquid instruments such as interest rate or bond futures, foreign exchange forwards and equity index futures or sector ETFs. The entire portfolio is designed to be liquidated in 48 hours.
In July RMF GEM invested $50 million in the flagship product of 5:15 Capital Management, an unrelated fixed income arbitrage manager based in Connecticut.
Minerva is managed by Stanley Ku, who founded the Hong Kong office of hedge fund Fortress Investment Group and most recently managed $750 million for Fortress’ Drawbridge Global Macro Fund. Dorothy Lau, Minerva’s risk and business manager, formerly worked for JP Morgan and Goldman Sachs.
“Stanley Ku’s work at Fortress and Goldman Sachs has made him a very well respected money manager in Asia,” said Hans Hurschler, head of Man Investments’ hedge fund Ventures. “We believe that Minerva has the potential to generate solid, stable returns and that it may attract substantial assets.”
Minerva is a discretionary global macro fund, focused on Asia. It trades only highly liquid instruments such as interest rate or bond futures, foreign exchange forwards and equity index futures or sector ETFs. The entire portfolio is designed to be liquidated in 48 hours.
RBC Hedge 250 Index returned 2.10 percent in July 2009
RBC Capital Markets today reported that for the month of July 2009 the RBC Hedge 250 Index(R) had a net return of 2.10 percent. This brings the year-to-date return of the Index to 13.04 percent. These returns are estimated and will be finalized by the middle of next month. The return for June 2009 has been finalized at 0.33 percent.
Comprised of approximately 250 actual hedge funds, the RBC Hedge 250 Index is positioned as a diversified and representative investable index. The Universe on which the Index is based currently consists of 5,242 hedge funds (excludes funds of hedge funds) with aggregate assets under management of $952 billion.
Since its inception on July 1, 2005 through the end of June 2009, the RBC Hedge 250 Index has had an annualized net return of 2.56 percent. In comparison, over the same period, other investable indices have averaged -1.44 percent while non-investable indices have averaged 4.25 percent, according to information reported by the sponsors of those indices.
Comprised of approximately 250 actual hedge funds, the RBC Hedge 250 Index is positioned as a diversified and representative investable index. The Universe on which the Index is based currently consists of 5,242 hedge funds (excludes funds of hedge funds) with aggregate assets under management of $952 billion.
Since its inception on July 1, 2005 through the end of June 2009, the RBC Hedge 250 Index has had an annualized net return of 2.56 percent. In comparison, over the same period, other investable indices have averaged -1.44 percent while non-investable indices have averaged 4.25 percent, according to information reported by the sponsors of those indices.
19 Aug 2009
Hedge Fund Atalaya Expands Investment and Marketing Team
Encouraged by a promising investment environment and accelerated investment pace, New York-based special opportunities fund, Atalaya Capital Management LP, today announced that it has expanded its team, adding three investment professionals and a marketing professional.
“Recent positive changes in our target investment markets have prompted Atalaya to bolster our professional platform in order to capitalize on market conditions and new opportunities,” said Ivan Q. Zinn, Founding Partner & Chief Investment Officer.
Josh Ufberg joined as a Principal from Goldman Sachs’ Special Situations Group, while Rana Mitra and Alex Wang have joined the team responsible for the sourcing and purchase of private credit assets as Senior Associate and Associate, respectively. Ashley Fochtman joined the Firm as a Vice President and will be working in a business development capacity. Previously, Ms. Fochtman worked in hedge fund marketing and at Goldman Sachs as an energy derivatives analyst.
Founded by Mr. Zinn in 2006, Atalaya focuses on the opportunistic purchase of senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity such as banks, commercial finance companies, and other financial and investment institutions.
About Atalaya Capital Management
Atalaya Capital Management is an alternative investment firm focused on investing in small and middle market credit opportunities. Since inception in early 2006, the Firm has successfully invested over $1 billion through (1) the opportunistic purchase of private, senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity, and (2) proprietary 'new issue' credit investments including DIP loans and other senior secured financings.
“Recent positive changes in our target investment markets have prompted Atalaya to bolster our professional platform in order to capitalize on market conditions and new opportunities,” said Ivan Q. Zinn, Founding Partner & Chief Investment Officer.
Josh Ufberg joined as a Principal from Goldman Sachs’ Special Situations Group, while Rana Mitra and Alex Wang have joined the team responsible for the sourcing and purchase of private credit assets as Senior Associate and Associate, respectively. Ashley Fochtman joined the Firm as a Vice President and will be working in a business development capacity. Previously, Ms. Fochtman worked in hedge fund marketing and at Goldman Sachs as an energy derivatives analyst.
Founded by Mr. Zinn in 2006, Atalaya focuses on the opportunistic purchase of senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity such as banks, commercial finance companies, and other financial and investment institutions.
About Atalaya Capital Management
Atalaya Capital Management is an alternative investment firm focused on investing in small and middle market credit opportunities. Since inception in early 2006, the Firm has successfully invested over $1 billion through (1) the opportunistic purchase of private, senior secured credit from forced sellers, failed financial institutions and sellers in need of liquidity, and (2) proprietary 'new issue' credit investments including DIP loans and other senior secured financings.
18 Aug 2009
Salus Alpha Directional Market Funds Outperform
Salus Alpha (SA) announced that their fund, 'The Salus Alpha Directional Markets' stood out from its peers in the Managed Futures space due to its unique approach.
The majority of the managed futures funds, SA said, invests systematically according to computer based trading models. A computer model typically uses different indicators to identify trends on the global financial markets. These models can be characterized as long-term and short-term operating models.
Most managed futures funds use long-term trend following models; this is the reason why most of the famous managed futures funds have had significantly negative performance since the beginning of the year 2009: they didn’t recognize the trend reversal in time.
The Approach of the Salus Alpha Directional Markets Fund differs significantly from competitors – Model Risk is minimized.
"Unlike other firms we do not trust in technical analysis but we forecast futures prices with precision to identify trends. In contrast to other managed futures models the Salus Alpha Directional Markets controls risk on position, sector and portfolio level. Daily risk balancing positions the fund right in stormy weather or trend less markets." SA said.
The majority of the managed futures funds, SA said, invests systematically according to computer based trading models. A computer model typically uses different indicators to identify trends on the global financial markets. These models can be characterized as long-term and short-term operating models.
Most managed futures funds use long-term trend following models; this is the reason why most of the famous managed futures funds have had significantly negative performance since the beginning of the year 2009: they didn’t recognize the trend reversal in time.
The Approach of the Salus Alpha Directional Markets Fund differs significantly from competitors – Model Risk is minimized.
"Unlike other firms we do not trust in technical analysis but we forecast futures prices with precision to identify trends. In contrast to other managed futures models the Salus Alpha Directional Markets controls risk on position, sector and portfolio level. Daily risk balancing positions the fund right in stormy weather or trend less markets." SA said.
17 Aug 2009
Alternative Investments Report: Identify Demand for Hedge Funds
Research and Markets has announced the addition of the "High Net Worth Alternative Investments" report to their offering.
The report identifies demand for hedge funds, capital protected funds, private equity funds and real estate funds from high net worths, The scope of the report covers France, Germany, Italy, Spain, UK, Nordic region, Belgium/Netherlands, Switzerland, Australia, China, India, Hong Kong, Singapore and Taiwan.
Includings hedge funds, capital protected funds, private equity funds and real estate funds (open ended and closed ended) thr peport shows the results of the Wealth Management Market Leaders survey of 280 wealth management companies worldwide, and on high net worths (those with more than $1m in onshore liquid assets)
HNW alternative investment asset allocations are expected to decline slightly in both Australia and France in the next two years, as high net worths reposition their portfolios. Real estate allocations and commodities allocations will decline among Australian HNWs while both hedge fund and derivative allocations will increase.
While British HNWs plan to increase their exposure to capital protected products and private equity funds, and their wealth managers will devote significant resources to the development of these product areas, they are failing to anticipate their clients demand for closed-ended real estate funds.
At the same time German wealth managers are focusing strongly on capital protected products which, while certainly in demand by most HNWs, will not see a significant increase in terms of portfolio allocations.
The report identifies demand for hedge funds, capital protected funds, private equity funds and real estate funds from high net worths, The scope of the report covers France, Germany, Italy, Spain, UK, Nordic region, Belgium/Netherlands, Switzerland, Australia, China, India, Hong Kong, Singapore and Taiwan.
Includings hedge funds, capital protected funds, private equity funds and real estate funds (open ended and closed ended) thr peport shows the results of the Wealth Management Market Leaders survey of 280 wealth management companies worldwide, and on high net worths (those with more than $1m in onshore liquid assets)
HNW alternative investment asset allocations are expected to decline slightly in both Australia and France in the next two years, as high net worths reposition their portfolios. Real estate allocations and commodities allocations will decline among Australian HNWs while both hedge fund and derivative allocations will increase.
While British HNWs plan to increase their exposure to capital protected products and private equity funds, and their wealth managers will devote significant resources to the development of these product areas, they are failing to anticipate their clients demand for closed-ended real estate funds.
At the same time German wealth managers are focusing strongly on capital protected products which, while certainly in demand by most HNWs, will not see a significant increase in terms of portfolio allocations.
14 Aug 2009
OECD Puts Cayman Islands on Tax 'White List'
The Organisation for Economic Cooperation and Development (OECD) added the Cayman Islands to its ‘white list’ of jurisdictions that substantially implement international tax standards.
The Cayman Islands recognition came about after the country signed its twelfth Tax Information Exchange Agreement (TIEA) with New Zealand, on 13 August 2009.
“For over four decades the Cayman Islands has steadily earned its place as a world-class international financial services centre." Leader of Government Business/Premier Designate, the Honourable McKeeva Bush said, "The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information.”
Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcomed the signing which puts Cayman Islands “alongside other countries that have substantially implemented the internationally agreed tax standard.”
The Cayman Islands’ maintains 12 bilateral tax information arrangements with the following countries: Denmark, Faroe Islands, Finland, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Sweden, United Kingdom and the United States.
The Cayman Islands recognition came about after the country signed its twelfth Tax Information Exchange Agreement (TIEA) with New Zealand, on 13 August 2009.
“For over four decades the Cayman Islands has steadily earned its place as a world-class international financial services centre." Leader of Government Business/Premier Designate, the Honourable McKeeva Bush said, "The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information.”
Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcomed the signing which puts Cayman Islands “alongside other countries that have substantially implemented the internationally agreed tax standard.”
The Cayman Islands’ maintains 12 bilateral tax information arrangements with the following countries: Denmark, Faroe Islands, Finland, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Sweden, United Kingdom and the United States.
SEC Amends Rules to Issue More Subpoenas
Off-shore hedge fund law firm, Sadis & Goldberg LLP, sent out a letter to their clients announcing that the Securities and Exchange Commission (SEC) appears determined to issue more subpoenas and give people more incentives to cooperate with investigations as it works to enhance its oversight of the financial markets.
The letter, obtained by HedgeCo, explains, "Don't be surprised if you receive a subpoena or are contacted by the SEC." Daniel G. Viola, spokesperson for Sadis and Glodbrg, said, "The SEC has significantly increased its enforcement efforts since the recent discovery of certain high profile Ponzi schemes."
Effective August 11, 2009, the SEC has also made it easier for its staff attorneys to issue subpoenas. Thus, the SEC staff attorneys will no longer have to obtain formal approvals to issue subpoenas; instead, they will simply need approval from their senior supervisor.
"If you receive an inquiry letter or subpoena from the SEC, remain calm." Viola said, "This is not uncommon given the current regulatory climate. Above all, do not respond without first contacting legal counsel."
The The SEC generally has broad powers to conduct investigations of potential violations of the federal securities laws and often works with the Department of Justice in connection with joint proceedings, often known as "parallel proceedings."
The law firms Regulatory Practice Group consists of former SEC personnel and litigators with experience regarding civil and criminal proceedings.
Contact info:
Daniel G. Viola at 212.573.8038 (or dviola@sglawyers.com)
Christiaan Johnson-Green at 212.573.8169 (or cjohnson-green@sglawyers.com)
The letter, obtained by HedgeCo, explains, "Don't be surprised if you receive a subpoena or are contacted by the SEC." Daniel G. Viola, spokesperson for Sadis and Glodbrg, said, "The SEC has significantly increased its enforcement efforts since the recent discovery of certain high profile Ponzi schemes."
Effective August 11, 2009, the SEC has also made it easier for its staff attorneys to issue subpoenas. Thus, the SEC staff attorneys will no longer have to obtain formal approvals to issue subpoenas; instead, they will simply need approval from their senior supervisor.
"If you receive an inquiry letter or subpoena from the SEC, remain calm." Viola said, "This is not uncommon given the current regulatory climate. Above all, do not respond without first contacting legal counsel."
The The SEC generally has broad powers to conduct investigations of potential violations of the federal securities laws and often works with the Department of Justice in connection with joint proceedings, often known as "parallel proceedings."
The law firms Regulatory Practice Group consists of former SEC personnel and litigators with experience regarding civil and criminal proceedings.
Contact info:
Daniel G. Viola at 212.573.8038 (or dviola@sglawyers.com)
Christiaan Johnson-Green at 212.573.8169 (or cjohnson-green@sglawyers.com)
13 Aug 2009
Please join us for the HedgeCo's Summer Networking Event
The end of the summer season is quickly approaching, and August is the perfect time to enjoy what is left of warm, sunny evenings! The HedgeCo Summer Networking Event is a chance for investors, hedge fund managers, and other industry professionals to come together and enjoy a night of sharing ideas and meeting new contacts. Recognized as having the largest attendance for any type of event in the hedge fund industry, the HedgeCo Networking Events have quickly become the top destination for generating new business and meeting new industry contacts. Come celebrate the end of summer, contribute to Hedge Funds Care, eat, drink and network with other members of the alternative investments community.
Click here to RSVP for HedgeCo's Summer Networking Event
Venue:
Aspen Social Club
157 W 47th St
New York, NY 10036
www.aspensocialclub.com
Date: August 19th, 2009
Time: 6-10 PM
Cash Bar
Click here to RSVP for HedgeCo's Summer Networking Event
Venue:
Aspen Social Club
157 W 47th St
New York, NY 10036
www.aspensocialclub.com
Date: August 19th, 2009
Time: 6-10 PM
Cash Bar
AIMA Launches Directive Centre Media Resoure
The Alternative Investment Management Association, (AIMA) has launched a Directive Centre on their website as part of an on-going campaign to have the European Commission's draft directive on Alternative Investment Fund Managers revised.
It is intended as a resource for journalists and members of the public and contains everything relevant for our campaign, including press releases, guidance notes, FAQs and other resource materials issued by AIMA; speeches and articles on the directive and links to relevant documents, including the European Commission’s directive and details of its legislative process; and a quotations section featuring a host of different figures expressing their concern about the directive.
Those quoted expressing concern or reported as doing so include pension funds and pension fund industry groups, European institutional investors, global banks, international law firms, commercial real estate groups, private equity, Swedish and UK ministers, Irish officials, the chair of the European Parliament’s ECON committee, the US Treasury, the UK Conservative party, the Mayor of London, the German Funds association, the Financial Times and the Economist, and even Robert Peston, Jacques de Larosière and Charles McCreevy.
It is intended as a resource for journalists and members of the public and contains everything relevant for our campaign, including press releases, guidance notes, FAQs and other resource materials issued by AIMA; speeches and articles on the directive and links to relevant documents, including the European Commission’s directive and details of its legislative process; and a quotations section featuring a host of different figures expressing their concern about the directive.
Those quoted expressing concern or reported as doing so include pension funds and pension fund industry groups, European institutional investors, global banks, international law firms, commercial real estate groups, private equity, Swedish and UK ministers, Irish officials, the chair of the European Parliament’s ECON committee, the US Treasury, the UK Conservative party, the Mayor of London, the German Funds association, the Financial Times and the Economist, and even Robert Peston, Jacques de Larosière and Charles McCreevy.
People Moves: Two Hedge Fund Specialists Join Probitas Partners
Hedge Fund veterans James Coleman and Vincent Le Hodey have joined global alternative investment firm Probitas Partners at its London office.
“We are very excited to have James and Vincent join Probitas Partners. They are seasoned industry veterans and well respected in their market." Greg Hausler, a Founding Partner at Probitas Partners, commented, "The current global environment is as tough as it has ever been for capital raising and executing secondary mandates. The addition of James and Vincent to our London office advances our capabilities to provide the very best research, advice, fund offerings and liquidity management to European Limited Partners.”
Coleman, a Managing Director at Probitas Partners, will lead the firm's efforts in Europe by managing key Limited Partner relationships, sourcing new General Partner clients and facilitating secondary sales activities. Le Hodey, a Director at Probitas Partners, will focus his efforts on relationship management and secondary fund advisory for Probitas Partners’ Limited Partner client base. Before joining Probitas Partners, Coleman was a Partner at Deloitte and headed its Fund Placement Advisory Group. Le Hodey also was formerly with Deloitte’s Fund Placement Advisory Group as a Director.
"Probitas Partners provides Vincent and me with a dynamic global platform from which to serve our European clients. We believe accessing Probitas Partners' top-quality fund sponsors, its industry-leading market research, and its deep experience in the secondary advisory business will reward European Limited Partners." Coleman concluded.
“We are very excited to have James and Vincent join Probitas Partners. They are seasoned industry veterans and well respected in their market." Greg Hausler, a Founding Partner at Probitas Partners, commented, "The current global environment is as tough as it has ever been for capital raising and executing secondary mandates. The addition of James and Vincent to our London office advances our capabilities to provide the very best research, advice, fund offerings and liquidity management to European Limited Partners.”
Coleman, a Managing Director at Probitas Partners, will lead the firm's efforts in Europe by managing key Limited Partner relationships, sourcing new General Partner clients and facilitating secondary sales activities. Le Hodey, a Director at Probitas Partners, will focus his efforts on relationship management and secondary fund advisory for Probitas Partners’ Limited Partner client base. Before joining Probitas Partners, Coleman was a Partner at Deloitte and headed its Fund Placement Advisory Group. Le Hodey also was formerly with Deloitte’s Fund Placement Advisory Group as a Director.
"Probitas Partners provides Vincent and me with a dynamic global platform from which to serve our European clients. We believe accessing Probitas Partners' top-quality fund sponsors, its industry-leading market research, and its deep experience in the secondary advisory business will reward European Limited Partners." Coleman concluded.
12 Aug 2009
Bandon Flagship Strategy Gains Momentum, 5th Year Reached
Bandon Capital Management has reached it's 5th year for its hedge fund flagship investment strategy, 'Directional Interest Rate Strategy', (DIRS) producing annualized returns of +7.09% net of all fees, comparatively over the same time period the S&P 500 has lost -2.15%.
The strategy provides investors with absolute returns, uncorrelated with the equity and fixed income markets, by investing in the US Treasury Market using ETF’s or mutual funds and is available to non-accredited investors.
“We’re incredibly proud of this milestone. This is an investment area where there is a tremendous amount of product development activity and innovation." Bill Woodruff, Founder and Managing Principal said, "As advisors and their clients increasingly seek non-correlated, absolute return strategies we stand out for both the length and strength of our track record.”
The strategy provides investors with absolute returns, uncorrelated with the equity and fixed income markets, by investing in the US Treasury Market using ETF’s or mutual funds and is available to non-accredited investors.
“We’re incredibly proud of this milestone. This is an investment area where there is a tremendous amount of product development activity and innovation." Bill Woodruff, Founder and Managing Principal said, "As advisors and their clients increasingly seek non-correlated, absolute return strategies we stand out for both the length and strength of our track record.”
Hedge Fund Models Need to Evolve- Deloitte Research
A new research paper by Deloitte LLC: "How Hedge Funds Are Becoming the Ultimate Networked Enterprise," focuses on how hedge fund methods of interacting with prime brokers and third-party administrators needs to be rethought in order to remain profitable as the roles of prime brokers and third-party administrators evolve.
"As investors demand increased transparency and operational risk management, hedge funds are faced with redefining their relationships with prime brokers and third-party administrators," Cary Stier, Deloitte's U.S. Asset Management Services leader explained.
"While attraction and retention of capital remains a top priority for fund managers, in today's market performance isn't the only bull's-eye a fund has to hit to accomplish these goals. Investors want assurance that the fund's operating model has taken into consideration the events of the last year and has adjusted accordingly. At the same time, prime brokers, administrators and custodians are looking for new ways to serve managers," said Adam Broun, Deloitte's Asset Management Services Consulting leader.
The report outlines five areas of focus for both prime brokers and third-party administrators:
Build the Middle-Office that Fits your Operating Strategy
Hedge funds need to determine their optimal operating strategy and factor in roles various service providers will play in providing necessary capabilities. Although most large firms will build their own middle-office, service offerings from fund administrators and custody players will prove to be compelling from both a cost and capability standpoint. Managing the network of service providers will require additional capabilities that the hedge funds will need to build and staff in-house.
Add Horsepower to Your Collateral Management
The multiprime model will only increase the need for improved collateral management. Some hedge funds will benefit by outsourcing to enterprise collateral management service providers or implementing vendor solutions to efficiently manage their collateral across various parties. In addition to spreading collateral across parties, independent valuation of illiquid assets, zero over-collateralization and optimal collateral composition will be the key focus areas.
Plan Risk Management
Risk management will see a balance of focus between market risk for investment strategies and counterparty risk. In a multiprime model, a single broker's risk report will show only a partial picture of the risk profile. Risk management will need to be a central function that aggregates positions across all providers. Take this opportunity to separate risk management from investment management.
Choose the Right Mix of Prime Brokers
The choice of prime brokers should be guided by aligning the fund manager's needs to the prime
broker's capabilities -- balance sheet strength, execution platform, geographic presence, flexible financing/margining options and product coverage.
Get the Most From Your Third-Party Administrator
Third-party administrators can help hedge funds outsource several middle- and back-office functions. With the increased complexity of the middle- and back-office, hedge funds should at least understand the range of services available from their administrators.
Implications for Prime Brokers
Prime brokers are experiencing a major shift in their business model. Their focus on developing deep relationships with a few hedge fund clients is no longer working in a multiprime environment, where risk diversification and access to capital is taking center stage. As lending stays constrained, prime brokers will be required to improve capabilities to deal with new clients and existing capabilities may lose favor among the hedge funds adopting the multiprime model.
Implications for Third-Party Administrators
Third-party administrators are being challenged by handling increased product complexities, technology scalability and international growth. While hedge funds outsource middle-offices and evaluate ways to reduce costs, third-party administrators will need to cut costs and potentially look into moving their back offices to cost-effective locations. Some may offer prime broker-like services to improve profitability and further increase competition in the market or go global; others will more closely align with custodians or consolidate for scale.
"As investors demand increased transparency and operational risk management, hedge funds are faced with redefining their relationships with prime brokers and third-party administrators," Cary Stier, Deloitte's U.S. Asset Management Services leader explained.
"While attraction and retention of capital remains a top priority for fund managers, in today's market performance isn't the only bull's-eye a fund has to hit to accomplish these goals. Investors want assurance that the fund's operating model has taken into consideration the events of the last year and has adjusted accordingly. At the same time, prime brokers, administrators and custodians are looking for new ways to serve managers," said Adam Broun, Deloitte's Asset Management Services Consulting leader.
The report outlines five areas of focus for both prime brokers and third-party administrators:
Build the Middle-Office that Fits your Operating Strategy
Hedge funds need to determine their optimal operating strategy and factor in roles various service providers will play in providing necessary capabilities. Although most large firms will build their own middle-office, service offerings from fund administrators and custody players will prove to be compelling from both a cost and capability standpoint. Managing the network of service providers will require additional capabilities that the hedge funds will need to build and staff in-house.
Add Horsepower to Your Collateral Management
The multiprime model will only increase the need for improved collateral management. Some hedge funds will benefit by outsourcing to enterprise collateral management service providers or implementing vendor solutions to efficiently manage their collateral across various parties. In addition to spreading collateral across parties, independent valuation of illiquid assets, zero over-collateralization and optimal collateral composition will be the key focus areas.
Plan Risk Management
Risk management will see a balance of focus between market risk for investment strategies and counterparty risk. In a multiprime model, a single broker's risk report will show only a partial picture of the risk profile. Risk management will need to be a central function that aggregates positions across all providers. Take this opportunity to separate risk management from investment management.
Choose the Right Mix of Prime Brokers
The choice of prime brokers should be guided by aligning the fund manager's needs to the prime
broker's capabilities -- balance sheet strength, execution platform, geographic presence, flexible financing/margining options and product coverage.
Get the Most From Your Third-Party Administrator
Third-party administrators can help hedge funds outsource several middle- and back-office functions. With the increased complexity of the middle- and back-office, hedge funds should at least understand the range of services available from their administrators.
Implications for Prime Brokers
Prime brokers are experiencing a major shift in their business model. Their focus on developing deep relationships with a few hedge fund clients is no longer working in a multiprime environment, where risk diversification and access to capital is taking center stage. As lending stays constrained, prime brokers will be required to improve capabilities to deal with new clients and existing capabilities may lose favor among the hedge funds adopting the multiprime model.
Implications for Third-Party Administrators
Third-party administrators are being challenged by handling increased product complexities, technology scalability and international growth. While hedge funds outsource middle-offices and evaluate ways to reduce costs, third-party administrators will need to cut costs and potentially look into moving their back offices to cost-effective locations. Some may offer prime broker-like services to improve profitability and further increase competition in the market or go global; others will more closely align with custodians or consolidate for scale.
11 Aug 2009
2009 European Industry Leadership Award Goes To Paulson Director
Mina Gerowin, Managing Director of Paulson Europe, is this year's recipient of the 100 Women in Hedge Funds 2009 European Industry Leadership Award. In recognition of outstanding professional talent and business ethics, Ms. Gerowin will be presented with the award at a 100 Women in Hedge Funds fundraiser in London on October 7th, 2009, to benefit the UK education charity, SHINE.
"We are thrilled that Mina Gerowin will accept the 100 Women in Hedge Funds' European Industry Leadership Award," said Effie K. Datson, Chair of 100 Women in Hedge Funds’ London Board. "Mina has demonstrated the type of leadership and entrepreneurial acumen that has become synonymous with the industry; moreover, she is committed to contributing to the non profit activities that she is equally passionate about."
Mina Gerowin is Managing Director of Paulson Europe and a partner of Paulson & Co., specialising in European merger and event-driven investment, including distressed and restructuring investment and the risk arbitrage of both debt and equity. At Paulson she has led investments, including Stork and Ahold, and runs their large European positions.
"We are thrilled that Mina Gerowin will accept the 100 Women in Hedge Funds' European Industry Leadership Award," said Effie K. Datson, Chair of 100 Women in Hedge Funds’ London Board. "Mina has demonstrated the type of leadership and entrepreneurial acumen that has become synonymous with the industry; moreover, she is committed to contributing to the non profit activities that she is equally passionate about."
Mina Gerowin is Managing Director of Paulson Europe and a partner of Paulson & Co., specialising in European merger and event-driven investment, including distressed and restructuring investment and the risk arbitrage of both debt and equity. At Paulson she has led investments, including Stork and Ahold, and runs their large European positions.
Hedge Funds Try to Keep Pace With Equities Market
Hedge fund manager consultant, Hennessee Group LLC, reported that managers benefited as international equities rallied in July, while the unpredictability of government intervention continues to be one of the greatest concerns for hedge funds.
“We have expected greater scrutiny and new regulation for the financial industry, and specifically for hedge funds, in 2009,” commented Charles Gradante, Co-Founder of Hennessee Group. “In the energy markets, regulators are calling for hard position limits on financially settled energy contracts set by NYMEX, starting as soon as September. While the goal is to reduce speculation and volatility in the energy markets, this could potentially reduce transparency by shifting trading to over-the-counter markets and decrease liquidity. The unpredictability of government intervention continues to be one of the greatest concerns for hedge funds.”
"The deterioration of the economy has clearly slowed, however we continue to see positive signs that we are on the road to recovery, including increases in new home sales, new orders, and production." Gradante said, "I am still cautious and see emerging signs of ‘protectionism’ in the form of dramatic reductions in external lending by G-7 institutions, which could stifle a global economic recovery."
“Hedge funds underperformed in July, as we would expect, but were able to capture a good portion of the market rally in July,” said Lee Hennessee , Managing Principal of Hennessee Group. “Managers opened up their net exposures to participate, but also benefited from a better than expected earnings season. However, managers remain vigilant, knowing that the markets could crack and crack quickly. The VIX is at pre-crisis August 2008 levels and that worries many.”
The Hennessee Hedge Fund Index advanced +3.37% in July (+15.50% YTD), while the S&P 500 increased +7.41%.
“We have expected greater scrutiny and new regulation for the financial industry, and specifically for hedge funds, in 2009,” commented Charles Gradante, Co-Founder of Hennessee Group. “In the energy markets, regulators are calling for hard position limits on financially settled energy contracts set by NYMEX, starting as soon as September. While the goal is to reduce speculation and volatility in the energy markets, this could potentially reduce transparency by shifting trading to over-the-counter markets and decrease liquidity. The unpredictability of government intervention continues to be one of the greatest concerns for hedge funds.”
"The deterioration of the economy has clearly slowed, however we continue to see positive signs that we are on the road to recovery, including increases in new home sales, new orders, and production." Gradante said, "I am still cautious and see emerging signs of ‘protectionism’ in the form of dramatic reductions in external lending by G-7 institutions, which could stifle a global economic recovery."
“Hedge funds underperformed in July, as we would expect, but were able to capture a good portion of the market rally in July,” said Lee Hennessee , Managing Principal of Hennessee Group. “Managers opened up their net exposures to participate, but also benefited from a better than expected earnings season. However, managers remain vigilant, knowing that the markets could crack and crack quickly. The VIX is at pre-crisis August 2008 levels and that worries many.”
The Hennessee Hedge Fund Index advanced +3.37% in July (+15.50% YTD), while the S&P 500 increased +7.41%.
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