In response to the recent need to restore confidence and liquidity in the mortgage market, Integrated Asset Services, LLC (IAS), a default management and residential collateral valuation company, is introducing iCDA Credit Due Diligence Analytics.
Expecting clients from hedge funds, mutual funds, private investors, government agencies, ratings agencies, and mortgage originators, IAS calls their system a “surgically precise” review of borrower credit worthiness, collateral valuation, and compliance for loan buyers.
“iCDA is designed to expose both the risk and merit of an asset beyond the historic origination and compliance guidelines," John Coughlin, VP of Capital Markets for IAS said, "Using our suite of analytic tools to forecast performance, we can identify exit strategies and recommend loan modifications and repayment plans for your assets.”
“We’ve combined IAS’s expert default professional services with innovative new technology and a few key alliances to provide a robust, single-source solution,” says Robert Vanderbilt, First Vice President for Integrated Asset Services. "We have to think the integrity of our approach and the fullness of our product will go a long way toward getting the mortgage market moving again,” said Vanderbilt.
9 Feb 2009
Hedge Fund Veteran Acts to Improve Fund Transparency
Mike Griffin of Spectrum Global Fund Administration has launched the a hedge fund website that he believes will improve hedge fund transparancy, HedgeACT.com.
“As a former hedge fund executive, I know first-hand how important transparency is during the capital allocation process,” said Michael Griffin, founder and CEO of HedgeACT and Chief Operating Officer of Fenchurch Capital Management from 1985 to 1998. “This is a difficult time for many hedge fund investors, and we think that giving them better information will make the entire analysis and allocation process much better for everyone involved.”
The “ACT” in HedgeACT.com refers to the site’s three key benefits for the hedge fund community, including Analytics, Capital Introduction and Transparency.
Providing investors with free access to hundreds of data points and analytics for over 7,500 hedge funds, HedgeAct's data is licensed from Morningstar.
Additionally, hedge funds and hedge fund administrators will have the ability to augment this data with their own timely, vetted information on fund performance, track record and other important investor criteria.
“As a former hedge fund executive, I know first-hand how important transparency is during the capital allocation process,” said Michael Griffin, founder and CEO of HedgeACT and Chief Operating Officer of Fenchurch Capital Management from 1985 to 1998. “This is a difficult time for many hedge fund investors, and we think that giving them better information will make the entire analysis and allocation process much better for everyone involved.”
The “ACT” in HedgeACT.com refers to the site’s three key benefits for the hedge fund community, including Analytics, Capital Introduction and Transparency.
Providing investors with free access to hundreds of data points and analytics for over 7,500 hedge funds, HedgeAct's data is licensed from Morningstar.
Additionally, hedge funds and hedge fund administrators will have the ability to augment this data with their own timely, vetted information on fund performance, track record and other important investor criteria.
7 Feb 2009
Pelorus Advisors Offer Risk Service Exclusively To Hedge Funds
As investors look to independent and unbiased hedge fund risk due diligence, Pelorus Advisors has decided to launch an operational risk management service for hedge fund investors. Unlike other due diligence firms, Pelorus only offers its risk due diligence service to hedge fund investors.
“It’s an enormous conflict of interest for diligence teams to be compensated by the same hedge funds they cover,” said Jeff Rathgeber, co-founder and partner of Pelorus. “The hedge fund community has seen more than enough target-sponsored ‘independent’ report cards. We'll let other risk management firms issue their seals of approval based on manager-supplied data.”
Pelorus is staffed by a team of hedge fund experts that have spent years operating inside complicated hedge fund structures. “It is only from this vantage point that an advisory firm gains the experience needed to identify the true risks that hide within hedge funds,” said Ken McGee, Managing Director of Pelorus’ Hedge Fund Practice Group. “It is exactly this kind of experience that is missing from most hedge fund due diligence firms. In our opinion, this lack of inside experience is what moves most firms away from being Hedge Fund Risk Experts and moves them into the category of Data Regression Analysts.”
“A clear distinction that separates Pelorus Advisors from other firms is that we don’t harvest massive amounts of publicly available data, crunch it, and issue armchair reports to investors,” said Rathgeber. “Nor do we merely rely on data that is supplied by the target hedge funds we audit. Instead, we conduct in-depth, on-site engagements to dig deep into a hedge fund's operations and run through its control structure to ensure that our clients’ investments are properly protected.”
“It’s an enormous conflict of interest for diligence teams to be compensated by the same hedge funds they cover,” said Jeff Rathgeber, co-founder and partner of Pelorus. “The hedge fund community has seen more than enough target-sponsored ‘independent’ report cards. We'll let other risk management firms issue their seals of approval based on manager-supplied data.”
Pelorus is staffed by a team of hedge fund experts that have spent years operating inside complicated hedge fund structures. “It is only from this vantage point that an advisory firm gains the experience needed to identify the true risks that hide within hedge funds,” said Ken McGee, Managing Director of Pelorus’ Hedge Fund Practice Group. “It is exactly this kind of experience that is missing from most hedge fund due diligence firms. In our opinion, this lack of inside experience is what moves most firms away from being Hedge Fund Risk Experts and moves them into the category of Data Regression Analysts.”
“A clear distinction that separates Pelorus Advisors from other firms is that we don’t harvest massive amounts of publicly available data, crunch it, and issue armchair reports to investors,” said Rathgeber. “Nor do we merely rely on data that is supplied by the target hedge funds we audit. Instead, we conduct in-depth, on-site engagements to dig deep into a hedge fund's operations and run through its control structure to ensure that our clients’ investments are properly protected.”
6 Feb 2009
Arkanar Financial Global Macro Hedge Fund Launch
Alternative investment consultant and director, Bob Torkelund has announced the launch of a Cayman regulated fund, the Arkanar Global Macro SP. The fund is being monitored and the due diligence work done by the Cayman regulator before the launch took place.
The initial offering period runs throughout February 2009, with a minimum investment of $10.000.
Torkelund said, “The fund is easy dealing and settlement: we have organised electronic clearing via Clearstream/Euroclear ‘payment against delivery’ which makes the fund available to most European and international banks in line with other international securities.”
The fund has a 20% high water mark performance fee and 0.5% per quarter as management fee and an expected annual return of 15–20%.
Torkelund is director of global retail sales, marketing and operations for several boutique fund managers. He was also responsible for the formulation and execution of Threadneedle Investments and has become a serious player in Continental Europe.
The initial offering period runs throughout February 2009, with a minimum investment of $10.000.
Torkelund said, “The fund is easy dealing and settlement: we have organised electronic clearing via Clearstream/Euroclear ‘payment against delivery’ which makes the fund available to most European and international banks in line with other international securities.”
The fund has a 20% high water mark performance fee and 0.5% per quarter as management fee and an expected annual return of 15–20%.
Torkelund is director of global retail sales, marketing and operations for several boutique fund managers. He was also responsible for the formulation and execution of Threadneedle Investments and has become a serious player in Continental Europe.
5 Feb 2009
Hedge Fund MC Subpoenad by Feds
Wall Street's highest-ranking woman, Erin Callan, was subpoenaed by a federal grand jury, along with 24 other Lehman executives regarding the collapse of Lehman Brothers, according to the New York Post.
Now in seclusion, the NYP says she taking a five-month personal leave. Callan joined Credit Suisse five months ago after being ousted as CFO of collapsed investment bank Lehman Brothers.
NYP excerpt: "At Lehman, Callan had been an admired public face of Lehman's whirlwind dance with hedge fund chiefs, but then-CEO Dick Fuld blamed her for Lehman's collapse, and pushed her out just months before the firm imploded, wiping out billions for investors and employees."
Now in seclusion, the NYP says she taking a five-month personal leave. Callan joined Credit Suisse five months ago after being ousted as CFO of collapsed investment bank Lehman Brothers.
NYP excerpt: "At Lehman, Callan had been an admired public face of Lehman's whirlwind dance with hedge fund chiefs, but then-CEO Dick Fuld blamed her for Lehman's collapse, and pushed her out just months before the firm imploded, wiping out billions for investors and employees."
4 Feb 2009
Madoff Hedge Fund Shut Down by Luxembourg Regulators
Swiss bank UBS AG's money manager, Luxalpha, was one of the main European hedge funds that gave money to US money manager Bernard Madoff, it is now being shut down by CSSF, Luxembourg's financial supervisors.
The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.
People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.
The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.
People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.
3 Feb 2009
Hedge Fund Manager to head up River & Mercantile Fund Launch
UK fund manager, River & Mercantile, is launching an Equity Income Fund with the aim to invest in the best ideas generated by their UK team.
Hedge fund manager Richard Staveley is taking the lead with a philosophy which involves analyzing companies based on their potential, valuation and timing. In other words, he is looking for the potential growth opportunities in companies throughout their life cycle; companies that are attractively valued; and companies with earnings upgrades as the timing of these upgrades can have a positive impact on share prices.
Staveley qualified as a Chartered Accountant with PriceWaterhouseCoopers in 1999, before joining the hedge fund boutique Bradshaw Asset Management as an Assistant Fund Manager. In 2001 he moved to SGAM and became Head of UK Small Company investments in 2002. Richard joined River and Mercantile in August 2006. He holds the CFA designation. Richard is Research Director with responsibility for the team research function. As a Fund Manager he will be focused on the UK Unconstrained and Small/Mid Cap strategies.
At launch the fund is expected to yield approximately 5.1% and it will invest in companies of all sizes. In order to monitor risk, it will however invest no more than 15% in smaller companies and no more than 30% in medium sized companies. It can invest up to 100% in larger companies if this is where the manager finds the best opportunities.
River and Mercantile is a new long only investment management boutique. The business was incorporated in 2006 as a Limited Liability Partnership with significant management interest. The cornerstone investor is Pacific Investments which is owned by Sir John Beckwith.
Hedge fund manager Richard Staveley is taking the lead with a philosophy which involves analyzing companies based on their potential, valuation and timing. In other words, he is looking for the potential growth opportunities in companies throughout their life cycle; companies that are attractively valued; and companies with earnings upgrades as the timing of these upgrades can have a positive impact on share prices.
Staveley qualified as a Chartered Accountant with PriceWaterhouseCoopers in 1999, before joining the hedge fund boutique Bradshaw Asset Management as an Assistant Fund Manager. In 2001 he moved to SGAM and became Head of UK Small Company investments in 2002. Richard joined River and Mercantile in August 2006. He holds the CFA designation. Richard is Research Director with responsibility for the team research function. As a Fund Manager he will be focused on the UK Unconstrained and Small/Mid Cap strategies.
At launch the fund is expected to yield approximately 5.1% and it will invest in companies of all sizes. In order to monitor risk, it will however invest no more than 15% in smaller companies and no more than 30% in medium sized companies. It can invest up to 100% in larger companies if this is where the manager finds the best opportunities.
River and Mercantile is a new long only investment management boutique. The business was incorporated in 2006 as a Limited Liability Partnership with significant management interest. The cornerstone investor is Pacific Investments which is owned by Sir John Beckwith.
2 Feb 2009
Tuckerbrook to Provide Daily Transparency to Hedge Fund Clients
In the wake of the Madoff scandal, Tuckerbrook Alternative Investments is offering its hedge fund investors the daily market value of assets in their capital accounts.
"In light of the impact 2008 is having on the hedge fund business, transparency is the most important enhancement the industry can embrace," John Hassett, Managing Principal of Tuckerbrook, said, "Tuckerbrook has always used third-party prime brokers, administrators and auditors in order to provide independent verification of fund activity, so it made sense to us to have daily asset transparency reports distributed directly from Citi Hedge Fund Services, to underscore the importance of both independent asset pricing and more frequent transparency. Although unique in the industry now, we would expect this level of reporting to become standard practice in the future."
Moses Grader, Chief Operating Officer of Tuckerbrook, said, "Ninety percent or more of all hedge fund investments are in commingled fund structures, with only the largest investors having daily accountability through separately managed accounts. Daily transparency at the client-account level, delivered by a trusted third party, is a major step up in accountability to those investors that don't have an SMA."
"In light of the impact 2008 is having on the hedge fund business, transparency is the most important enhancement the industry can embrace," John Hassett, Managing Principal of Tuckerbrook, said, "Tuckerbrook has always used third-party prime brokers, administrators and auditors in order to provide independent verification of fund activity, so it made sense to us to have daily asset transparency reports distributed directly from Citi Hedge Fund Services, to underscore the importance of both independent asset pricing and more frequent transparency. Although unique in the industry now, we would expect this level of reporting to become standard practice in the future."
Moses Grader, Chief Operating Officer of Tuckerbrook, said, "Ninety percent or more of all hedge fund investments are in commingled fund structures, with only the largest investors having daily accountability through separately managed accounts. Daily transparency at the client-account level, delivered by a trusted third party, is a major step up in accountability to those investors that don't have an SMA."
Russian Hedge Fund Pharos Reports on the Russian Investment Landscape
The events of 2008 were dramatic everywhere in the world, but particularly so in Russia. Despite the decline of -72.2% for the MSCI Index in 2008, the Pharos Russia Fund produced a positive 3 year annualized return of 1.3% with 24.8% volatility as compared to the MSCI Russia Index.
The Pharos Russia Fund's 5 year returns also show a strong outperformance against the MSCI Russia Index. The 11 year period of January 1998 through December 2008, which encompasses two market meltdowns and many other mini-crises, the Pharos Russia Fund has returned a total of 100.33%, against a gain of only 3.81% for the MSCI Russia Index.
"Our long history in the Russian financial markets through good times and bad times helps guide our investment philosophy and makes us mindful of the periodic crises that hit the market," Pharos says, "We seek to maximize our investor's returns over the medium term, and one of the most important aspects of that is to protect against severe losses in times of crisis."
Their flagship fund, Pharos Russia Fund, has been the most resilient performer in the Russia & CIS universe in 2008 and in January 09, Pharos Russia was up +0.4% whereas the Russian market RTS was down -15.3% and the MSCI Russia down -11.6%.
The market conditions in Russia deteriorated in an accelerating fashion once the May holiday revelry had ended. The commodity cycle reversed as economic indicators began to reflect the demand destruction caused by the slowing of credit availability. Waves of deleveraging of the global financial system soon followed. Russia suffered initially as the commodity focused investors sold positions, and again as investors generally sold down positions to reduce leverage. The last victim was the Russian oligarch.
The typical Russian billionaire was in fact a house of cards having taken on massive debt against the assets underlying his personal holdings. The publicly traded assets became subject universally to margin calls by international banks, while private assets found their mezzanine financing had evaporated. The result was a flashpoint in late-September when several of the largest local financial groups had become technically insolvent. The markets were frozen for a couple of days while the government intervened to provide liquidity and arrange shotgun marriages.
By this time, Pharos said, they had adjusted their positions to reflect the bankruptcy of Lehman Brothers and the growing instability of global markets. "While our overlay gave investors protection against a collapsing market, we realized that the fundamental structure of the markets was changing, and that our risk management concerns had to change."
"As the financial crisis continued, we were concerned about other effects on the market. Our experience in the 1998 crisis taught us that markets can get caught in downward spirals. We were particularly concerned that most Russian market players were fully invested and many were highly leveraged. This was a situation ripe for forced selling and further dramatic market declines."
While this tale of misadventure is unsurprising for an emerging market, it has also become the dangerous reality in the US and other developed markets as well, Pharos said.
"In Russia, there are a few key triggers that we are looking for before investing fully into the market. In past letters, we have identified credit normalization and commodity price stabilization as the two necessary, but perhaps not sufficient, conditions for Russia's bear market to end. While we do not expect credit availability to reach the extreme levels of the last few years, basic credit does need to flow again for companies to move out of crisis mode and for trade to resume in a normal manner. The Russian government has taken admirable steps to deal with the shutdown of credit, and after a slow start is now using the large reserves built up during the commodity boom to supply credit to Russian corporations that need help rolling over their debt."
The instability of the Russian markets will continue so long as oil prices remain unstable. At this stage, the oil price determines the fair value of the ruble, which, in turn, dictates the future course of Russia's economic growth, however, Pharos believes that the key to success from here is sizing positions to adjust for volatility, while being prepared to act quickly once signs of stability emerge.
The Pharos Russia Fund's 5 year returns also show a strong outperformance against the MSCI Russia Index. The 11 year period of January 1998 through December 2008, which encompasses two market meltdowns and many other mini-crises, the Pharos Russia Fund has returned a total of 100.33%, against a gain of only 3.81% for the MSCI Russia Index.
"Our long history in the Russian financial markets through good times and bad times helps guide our investment philosophy and makes us mindful of the periodic crises that hit the market," Pharos says, "We seek to maximize our investor's returns over the medium term, and one of the most important aspects of that is to protect against severe losses in times of crisis."
Their flagship fund, Pharos Russia Fund, has been the most resilient performer in the Russia & CIS universe in 2008 and in January 09, Pharos Russia was up +0.4% whereas the Russian market RTS was down -15.3% and the MSCI Russia down -11.6%.
The market conditions in Russia deteriorated in an accelerating fashion once the May holiday revelry had ended. The commodity cycle reversed as economic indicators began to reflect the demand destruction caused by the slowing of credit availability. Waves of deleveraging of the global financial system soon followed. Russia suffered initially as the commodity focused investors sold positions, and again as investors generally sold down positions to reduce leverage. The last victim was the Russian oligarch.
The typical Russian billionaire was in fact a house of cards having taken on massive debt against the assets underlying his personal holdings. The publicly traded assets became subject universally to margin calls by international banks, while private assets found their mezzanine financing had evaporated. The result was a flashpoint in late-September when several of the largest local financial groups had become technically insolvent. The markets were frozen for a couple of days while the government intervened to provide liquidity and arrange shotgun marriages.
By this time, Pharos said, they had adjusted their positions to reflect the bankruptcy of Lehman Brothers and the growing instability of global markets. "While our overlay gave investors protection against a collapsing market, we realized that the fundamental structure of the markets was changing, and that our risk management concerns had to change."
"As the financial crisis continued, we were concerned about other effects on the market. Our experience in the 1998 crisis taught us that markets can get caught in downward spirals. We were particularly concerned that most Russian market players were fully invested and many were highly leveraged. This was a situation ripe for forced selling and further dramatic market declines."
While this tale of misadventure is unsurprising for an emerging market, it has also become the dangerous reality in the US and other developed markets as well, Pharos said.
"In Russia, there are a few key triggers that we are looking for before investing fully into the market. In past letters, we have identified credit normalization and commodity price stabilization as the two necessary, but perhaps not sufficient, conditions for Russia's bear market to end. While we do not expect credit availability to reach the extreme levels of the last few years, basic credit does need to flow again for companies to move out of crisis mode and for trade to resume in a normal manner. The Russian government has taken admirable steps to deal with the shutdown of credit, and after a slow start is now using the large reserves built up during the commodity boom to supply credit to Russian corporations that need help rolling over their debt."
The instability of the Russian markets will continue so long as oil prices remain unstable. At this stage, the oil price determines the fair value of the ruble, which, in turn, dictates the future course of Russia's economic growth, however, Pharos believes that the key to success from here is sizing positions to adjust for volatility, while being prepared to act quickly once signs of stability emerge.
1 Feb 2009
Contributing Factors To Hedge Funds' 2008 Failure
Credit Suisse Tremont Index LLC released a new research piece, 'One for the History Books: Hedge Fund Performance in 2008', a review of the factors which contributed to hedge funds’ dismal -19% return in 2008
The report discusses the impact of events such as the fall of Lehman Brothers, the short sale ban and the scandal surrounding Bernard Madoff, offering insight into the impact of each event on individual sectors and the hedge fund industry as a whole. The piece also offers some comparisons to past market downturns, periods in which strategies saw severe declines in assets under management and how performance was impacted in the years that followed.
Some key takeaways from the report include:
The Broad Index, a diversified, asset weighted hedge fund index comprised of 496 underlying hedge funds (as of December 31, 2008), was down 19% for the year, marking 2008 the worst year in the history of the Broad Index.
It is estimated that the hedge fund industry lost approximately 29% of assets in 2008, totaling $582 billion, representing the first time in six years that the hedge fund industry has seen net asset losses.
One in five funds within the Broad Index posted positive returns for the year, with almost one in seven posting returns in the double digits.
The report discusses the impact of events such as the fall of Lehman Brothers, the short sale ban and the scandal surrounding Bernard Madoff, offering insight into the impact of each event on individual sectors and the hedge fund industry as a whole. The piece also offers some comparisons to past market downturns, periods in which strategies saw severe declines in assets under management and how performance was impacted in the years that followed.
Some key takeaways from the report include:
The Broad Index, a diversified, asset weighted hedge fund index comprised of 496 underlying hedge funds (as of December 31, 2008), was down 19% for the year, marking 2008 the worst year in the history of the Broad Index.
It is estimated that the hedge fund industry lost approximately 29% of assets in 2008, totaling $582 billion, representing the first time in six years that the hedge fund industry has seen net asset losses.
One in five funds within the Broad Index posted positive returns for the year, with almost one in seven posting returns in the double digits.
30 Jan 2009
Hedge Fund Manager to Appear in Court
Hedge fund manager Arthur Nadel is scheduled for a bail hearing in federal court in Tampa this afternoon.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
Nadel faces a federal charge of securities and wire fraud after using “manipulative and deceptive devices” to bilk investors out of hundreds of millions. Shortly after the infamous arrest of Bernard Madoff, Nadel’s family reported him missing on January 14.
The day Nadel disappeared, he was expected to disburse $50 million in redemptions to investors from the six total funds he managed. Nadel reportedly wrote a letter to his wife before he missing.
According to the criminal complaint, Nadel’s fraud dates back to at least 2003 and has affected over 100 victims nationwide. There is also a civil complaint filed against Nadel by the U.S. Securities and Exchange Commission, who alleges that he transferred $1.25 million into secret bank accounts.
29 Jan 2009
Green Alternative Investment Software To Be Developed
CommodityPoint, a utilities analyst and consulting firm of UtiliPoint International, is partnering with Global Change Associates, convergence of energy and environmental financial markets specialist, to undertake a multi-client research project and to produce a study report around emissions trading & monitoring software.
“Green trading has now become established and various 'green' commodities are now actively traded by a variety of participants including carbon, SOx and Nox as well as RECs (Renwable Energy Credits). Investor interest in trading these commodities is at an all time high. Consequently there is a growing demand for software products that will support these trading and risk management activities as well as in those software products that monitor and help manage emissions," said Dr. Gary M. Vasey of CommodityPoint. "Indeed, as forecast in our book 'Trends in Energy Trading, Transaction and Risk Management Software - a Primer' (Booksurge, 2006), these two software categories are morphing as the two software markets collide."
“The emerging greenhouse gas market is now ripe for software solutions on an enterprise level. Today, the environmental software space is quite small. It is estimated at $100 million with many small companies developing and extending their domain expertise into this area and beyond energy company applications (energy companies have had to comply with environmental laws in many jurisdictions for over a decade),“ said Mr. Peter C. Fusaro of Global Change Associates Inc.“The need to measure and manage greenhouse gas emissions data is becoming a new area of business development for software companies especially with impending federal greenhouse gas laws in the United States."
“Green trading has now become established and various 'green' commodities are now actively traded by a variety of participants including carbon, SOx and Nox as well as RECs (Renwable Energy Credits). Investor interest in trading these commodities is at an all time high. Consequently there is a growing demand for software products that will support these trading and risk management activities as well as in those software products that monitor and help manage emissions," said Dr. Gary M. Vasey of CommodityPoint. "Indeed, as forecast in our book 'Trends in Energy Trading, Transaction and Risk Management Software - a Primer' (Booksurge, 2006), these two software categories are morphing as the two software markets collide."
“The emerging greenhouse gas market is now ripe for software solutions on an enterprise level. Today, the environmental software space is quite small. It is estimated at $100 million with many small companies developing and extending their domain expertise into this area and beyond energy company applications (energy companies have had to comply with environmental laws in many jurisdictions for over a decade),“ said Mr. Peter C. Fusaro of Global Change Associates Inc.“The need to measure and manage greenhouse gas emissions data is becoming a new area of business development for software companies especially with impending federal greenhouse gas laws in the United States."
28 Jan 2009
Deephaven's Hedge Fund Bought by Stark Investments
Deephaven Capital Management signed a deal on Tuesday to sell the assets of its flagship hedge fund, Knight Capital Group Inc., to Stark Investments.
The founders, Brian Stark and Mike Roth, will give Deephaven investors the option to become investors in Stark Funds by contributing their share of their Deephaven Fund portfolio positions, they said in a letter to shareholders. Deephaven in October suspended withdrawals from its $1.6 billion Deephaven Global Multi-Strategy funds after being overwhelmed by investor redemption requests.
"We believe this agreement is advantageous for Stark's and Deephaven's investors, and we are excited about the prospect of retaining their high quality investor base," Mike Roth said, "In strategically managing the business, we have put ourselves in a position to capitalize upon these types of situations. We will continue to be on the lookout for additional opportunities that complement our strategic plan and strengthen our organization."
Stark has headquarters in Milwaukee, Miami, London and Hong Kong.
The founders, Brian Stark and Mike Roth, will give Deephaven investors the option to become investors in Stark Funds by contributing their share of their Deephaven Fund portfolio positions, they said in a letter to shareholders. Deephaven in October suspended withdrawals from its $1.6 billion Deephaven Global Multi-Strategy funds after being overwhelmed by investor redemption requests.
"We believe this agreement is advantageous for Stark's and Deephaven's investors, and we are excited about the prospect of retaining their high quality investor base," Mike Roth said, "In strategically managing the business, we have put ourselves in a position to capitalize upon these types of situations. We will continue to be on the lookout for additional opportunities that complement our strategic plan and strengthen our organization."
Stark has headquarters in Milwaukee, Miami, London and Hong Kong.
27 Jan 2009
Eze & Reuters Sponsor Obama Hedge Fund Strategy Panel
Hedge fund tech. provider Eze Castle Integration and Thomson Reuters are sponsoring a panel to discuss hedge fund strategies and regulatory considerations for the Obama administration, the 'Obama Administration & Hedge Fund Strategies panel'.
Hedge funds and investment firms are discussing whether the Obama administration will have a positive or negative impact on existing hedge fund strategies.
Moderated by Daniel Burns, Reuters U.S. Financial Markets Editor, the panel also includes Reuters correspondents Jeff Mason and Jennifer Ablan and hedge fund managers Dan Castro, Chief Risk Officer of Huxley Capital and Theresa R. Patti, CFA, Managing Director of QFS Asset Management.
The Obama Administration & Hedge Fund Strategies panel will take place in New York City on Wednesday, January 28, from 5:30 – 7:30 p.m., at the Thomson Reuters office at 3 Times Square, New York.
Hedge funds and investment firms are discussing whether the Obama administration will have a positive or negative impact on existing hedge fund strategies.
Moderated by Daniel Burns, Reuters U.S. Financial Markets Editor, the panel also includes Reuters correspondents Jeff Mason and Jennifer Ablan and hedge fund managers Dan Castro, Chief Risk Officer of Huxley Capital and Theresa R. Patti, CFA, Managing Director of QFS Asset Management.
The Obama Administration & Hedge Fund Strategies panel will take place in New York City on Wednesday, January 28, from 5:30 – 7:30 p.m., at the Thomson Reuters office at 3 Times Square, New York.
Eurekahedge Forecasts More Hedge Fund Launches in 2009
Hedge funds returned a healthy 1% in January, wrapping up a tumultuous 2008 at -12.3%, according to Eurekahedge. Hedge fund assets fell $380 billion or 20% in 2008, from just under $1.9 trillion to just over $1.5 trillion.
Eurekahedge's forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
Eurekahedge's forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
FX Trading Grows 250% as Investors Look For Alternative to Hedge Fund Trading
Deutsche Bank's foreign exchange (FX) trading platform, dbFX.com, reported a surge in customer numbers in 2008 as FX grew as an asset class of choice for investors amid the financial crisis.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
26 Jan 2009
Hedge Fund Operational Due Diligence - Book Review
Informative book by Jason Scharfman on, well, pretty much everything you need to run a hedge fund, from risk management to disaster recovery, all need-to-know material for both investors and hedge fund analysts.
Included are examples of past hedge fund management mistakes, showing exactly where the managers went wrong, and how to avoid downfalls such as the ‘but everyone is doing it’ excuse, among others.
Technical though understandable, Scharfman also expains the reliance on technology that is becoming ever more apparent in hedge funds, the dangers of phantomware, and questions that should be asked before commiting to any new technology.
I liked this book for the simple reason that it explains just about everything, almost like a handbook, the index makes an excellent resource.
Since writing the book he has left his position at Morgan Stanley and now runs an operational due diligence consulting firm called Corgentum Consulting. Corgentum works with hedge funds and investors to diagnose and mitigate operational risk at hedge funds and improve upon the of the operational due diligence process.
Available at Amazon
Included are examples of past hedge fund management mistakes, showing exactly where the managers went wrong, and how to avoid downfalls such as the ‘but everyone is doing it’ excuse, among others.
Technical though understandable, Scharfman also expains the reliance on technology that is becoming ever more apparent in hedge funds, the dangers of phantomware, and questions that should be asked before commiting to any new technology.
I liked this book for the simple reason that it explains just about everything, almost like a handbook, the index makes an excellent resource.
Since writing the book he has left his position at Morgan Stanley and now runs an operational due diligence consulting firm called Corgentum Consulting. Corgentum works with hedge funds and investors to diagnose and mitigate operational risk at hedge funds and improve upon the of the operational due diligence process.
Available at Amazon
Gates Donates Despite Economic Distress
In a letter scheduled to be released today, January 26th, Bill Gates is offering insight to the world both about the current financial crisis as well as what his foundation has been able to do despite it.
Matthew Bishop, New York Bureau Chief and American Business Editor for The Economist conducted the interview, where Gates said his foundation’s assets may be shrinking, but it is increasing its giving in 2009, from $3.3 billion last year to $3.8 billion—the biggest ever annual budget for a charitable foundation.
Much of this will go towards finding ways to reduce deaths from the 20 diseases that kill the most people in poor countries, according to the Economist. Gates has high hopes that the number of children who die each year can be cut by half, to 5m, within 20 years, just as it was cut by half in the past half-century. Polio will soon be eradicated, he believes, and deaths from malaria can fall by half by 2015.
In a year of economic distress and record losses, optimism and generosity are still central to Gates, he says in the interview. With projected increases in giving in 2009, The Bill and Melinda Gates Foundation will continue to focus on healthcare issues around the world as well as education reforms.
Similarly, he says he is optimistic that Barack Obama’s administration will make progress on school reform, pointing to the extra spending on schools contained in Mr Obama’s economic stimulus package and the fact that the new education secretary, Arne Duncan, welcomed Gates-funded charter schools in Chicago.
Matthew Bishop, New York Bureau Chief and American Business Editor for The Economist conducted the interview, where Gates said his foundation’s assets may be shrinking, but it is increasing its giving in 2009, from $3.3 billion last year to $3.8 billion—the biggest ever annual budget for a charitable foundation.
Much of this will go towards finding ways to reduce deaths from the 20 diseases that kill the most people in poor countries, according to the Economist. Gates has high hopes that the number of children who die each year can be cut by half, to 5m, within 20 years, just as it was cut by half in the past half-century. Polio will soon be eradicated, he believes, and deaths from malaria can fall by half by 2015.
In a year of economic distress and record losses, optimism and generosity are still central to Gates, he says in the interview. With projected increases in giving in 2009, The Bill and Melinda Gates Foundation will continue to focus on healthcare issues around the world as well as education reforms.
Similarly, he says he is optimistic that Barack Obama’s administration will make progress on school reform, pointing to the extra spending on schools contained in Mr Obama’s economic stimulus package and the fact that the new education secretary, Arne Duncan, welcomed Gates-funded charter schools in Chicago.
23 Jan 2009
EUEC Workshop fo Carbon Hedge Funds
Two prominent carbon and CDM Experts, Peter C. Fusaro, Dr. Prabhu Dayal are presenting the 'EUEC 2009' in Phoenix, Arizona, the Carbon Trading course includes practical case studies for the design and development of CDM Projects and Certified Emission Reductions (CERs).
Aletrnative investment strategist, Global Change Associates, says the workshop will provide insights on the state of carbon trading markets and finance in the US and Europe and what some of the investment opportunities are in this emerging asset class for investors.
Case studies of renewable energy projects being developed by C TRADE in the Philippines will be used to illustrate the certification process for CERs, where methane gas emissions are avoided and electric power generated using waste methane bio-digester gas recovered from animal manure.
Fusaro is a Global Change Associates carbon expert and best selling author of "What Went Wrong at Enron", Dayal is President of C TRADE and Chair for EUEC.
Aletrnative investment strategist, Global Change Associates, says the workshop will provide insights on the state of carbon trading markets and finance in the US and Europe and what some of the investment opportunities are in this emerging asset class for investors.
Case studies of renewable energy projects being developed by C TRADE in the Philippines will be used to illustrate the certification process for CERs, where methane gas emissions are avoided and electric power generated using waste methane bio-digester gas recovered from animal manure.
Fusaro is a Global Change Associates carbon expert and best selling author of "What Went Wrong at Enron", Dayal is President of C TRADE and Chair for EUEC.
Veteran of U.S. Secret Service Heads Up AlphaMetrix’s Financial Investigations Group
To root out fraud and to give investors increased confidence that their assets are being managed with institutions of integrity and honesty, AlphaMetrix formally introduced AlphaMetrix Financial Investigations, LLC, run by David Fisher, a 24-year veteran of the US Secret Service.
AlphaMetrix is a research and investment platform for managed futures and other liquid alpha strategies with approximately $1.7 billion on the platform.
“Under David's leadership, the alternative investment company seeks to set a new standard for the due diligence on financial institutions,” the company said in a letter received by HedgeCo, “first focusing on those on the AlphaMetrix platform, and later as a third-party provider of due diligence services.”
Fisher has a strong domestic and international investigative background in financial fraud, background investigations, security planning and electronic crimes. In addition to responsibilities associated with the Secret Service’s well-known role protecting the President, Vice President and visiting Heads of State, Fisher also brings extensive experience from the agency’s core investigative mission into financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers and money laundering.
“AlphaMetrix has always been known for our deep trading manager research capabilities, and the new Financial Investigations group takes that to an even higher level, with comprehensive background checks and reviews of operational risk,” said Aleks Kins, CEO of AlphaMetrix.
“This type of due diligence work takes a consummate professional, so we are particularly excited to have someone of David Fisher’s caliber on board to build AlphaMetrix Financial Investigations into a thriving organization,” he added.
AlphaMetrix is a research and investment platform for managed futures and other liquid alpha strategies with approximately $1.7 billion on the platform.
“Under David's leadership, the alternative investment company seeks to set a new standard for the due diligence on financial institutions,” the company said in a letter received by HedgeCo, “first focusing on those on the AlphaMetrix platform, and later as a third-party provider of due diligence services.”
Fisher has a strong domestic and international investigative background in financial fraud, background investigations, security planning and electronic crimes. In addition to responsibilities associated with the Secret Service’s well-known role protecting the President, Vice President and visiting Heads of State, Fisher also brings extensive experience from the agency’s core investigative mission into financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers and money laundering.
“AlphaMetrix has always been known for our deep trading manager research capabilities, and the new Financial Investigations group takes that to an even higher level, with comprehensive background checks and reviews of operational risk,” said Aleks Kins, CEO of AlphaMetrix.
“This type of due diligence work takes a consummate professional, so we are particularly excited to have someone of David Fisher’s caliber on board to build AlphaMetrix Financial Investigations into a thriving organization,” he added.
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