OppenheimerFunds, Inc. and OppenheimerFunds Distributor, Inc. is being investigated by US law firm Hagens Berman Sobol Shapiro for alleged violations of federal securities laws among other things on behalf of investors in the Core Bond Fund.
The "low-risk, conservative bond fund" that invested mainly in high-quality corporate bonds, is alleged to have started acting "like a hedge fund" taking extreme risks including selling risky credit default swaps and other high-risk derivative investments to Wall Street firms.
The Core Bond Fund suffered losses of more than 35% of its value in 2008 and continued to fall another 10% in the first three months of 2009. The Oppenheimer Champion income fund lost more than 80% of the its value, dropping almost $2 billion over the course of 15 months as a result of similar risky investments and deviations from the stated fund investment policy.
Hagens Berman is investigating whether officers and directors of the Core Bond Fund misled investors about the safety of the fund and whether they failed to adequately warn investors when the fund took extreme risks in violation of the Fund’s stated investment policy.
15 Apr 2009
Offshore Emerging Market Firm Hires Hedge Fund Manager
FSA regulated specialist asset management firm, Silk Invest Ltd, has hired John Bates, former Head of Credit Research Africa at hedge fund Renaissance Capital, to spearhead its move into Frontier Fixed Income.
“We will offer a liquid Frontier Market Fixed Income product, "Zin Bekkali, CEO of Silk Invest, said " Although largely focused on Sovereigns, there will be a corporate element that will represent up to 20% of the portfolio.”
Daniel Broby, Chief Investment Officer says he is “delighted John is coming on board, having seen the quality of his work whilst we were together at Renaissance. He is truly one of the few people who not only know the universe inside out but he is also of the few able to capitalise on that knowledge to obtain equity like returns in the frontier fixed income space.”
Prior to his work at the Renaissance hedge fund, he was a senior Emerging Market Credit Analyst at ABN Amro in London and West LB. John has a ‘BA Hons’ from University College London.
“John is yet another high level hire that is in line with our policy of recruiting the best skillset in African and Arab markets,” Dr Heinz Hockmann, the Chairman of Silk Invest, said.
“We will offer a liquid Frontier Market Fixed Income product, "Zin Bekkali, CEO of Silk Invest, said " Although largely focused on Sovereigns, there will be a corporate element that will represent up to 20% of the portfolio.”
Daniel Broby, Chief Investment Officer says he is “delighted John is coming on board, having seen the quality of his work whilst we were together at Renaissance. He is truly one of the few people who not only know the universe inside out but he is also of the few able to capitalise on that knowledge to obtain equity like returns in the frontier fixed income space.”
Prior to his work at the Renaissance hedge fund, he was a senior Emerging Market Credit Analyst at ABN Amro in London and West LB. John has a ‘BA Hons’ from University College London.
“John is yet another high level hire that is in line with our policy of recruiting the best skillset in African and Arab markets,” Dr Heinz Hockmann, the Chairman of Silk Invest, said.
Legg Mason Launches Tactical Allocation Fund
Investment management company Legg Mason Inc. has launched a global multi-asset tactical allocation mutual fund named Legg Mason Permal Tactical Allocation Fund. The fund, which targets institutional and retail taxable and tax-exempt investors, will be managed by Legg Mason's fund-of-hedge-funds affiliate, Permal Asset Management.
Legg Mason said that the fund is an opportunistic and diversified product, which seeks to benefit from any market condition and to outperform a traditional 60/30/10 (equity/fixed income/cash) portfolio over a medium-term time frame.
"Permal has an expertise in asset allocation and a deep global perspective and we believe they can find opportunities in these markets to deliver value to our clients." Matt Schiffman, Head of Americas Retail at Legg Mason said, "This is an innovative way to bring their fund of hedge fund expertise to traditional asset classes in a mutual fund offering."
The asset allocation strategy is designed to exploit perceived inefficiencies or imbalances in equity, fixed-income or other asset classes in any region or country, said the Baltimore, Maryland-based mutual fund group.
The fund will invest primarily in both passive and actively managed investment funds, to include specifically, affiliated and unaffiliated open-end mutual funds, unaffiliated closed-end mutual funds and exchange traded funds and notes, as well as cash equivalents and alternative investments.
Legg Mason said that the fund is an opportunistic and diversified product, which seeks to benefit from any market condition and to outperform a traditional 60/30/10 (equity/fixed income/cash) portfolio over a medium-term time frame.
"Permal has an expertise in asset allocation and a deep global perspective and we believe they can find opportunities in these markets to deliver value to our clients." Matt Schiffman, Head of Americas Retail at Legg Mason said, "This is an innovative way to bring their fund of hedge fund expertise to traditional asset classes in a mutual fund offering."
The asset allocation strategy is designed to exploit perceived inefficiencies or imbalances in equity, fixed-income or other asset classes in any region or country, said the Baltimore, Maryland-based mutual fund group.
The fund will invest primarily in both passive and actively managed investment funds, to include specifically, affiliated and unaffiliated open-end mutual funds, unaffiliated closed-end mutual funds and exchange traded funds and notes, as well as cash equivalents and alternative investments.
14 Apr 2009
Offshore Law Pioneers Expand to Brazil
Cayman Islands law firm Conyers Dill & Pearman now has the official approval and licensing permission for a São Paulo partnership by the the Brazilian Bar Association.
As the only offshore firm to have an office in Brazil, the São Paulo practice will initially focus on investment funds, public company listings and holding company incorporations, providing clients with direct access to the key jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius.
The São Paulo launch solidifies Conyers’ presence in the fast-growing BRIC markets. In March 2008, the firm became the first and only offshore firm to have an office in Russia with the launch of its Moscow office. In October 2008, Conyers established a presence in Mauritius, a preferred jurisdiction for structuring investments in India, and added the provision of Mauritius legal advice to its roster of jurisdictions to service the Indian, Middle Eastern and African markets.
"Even in this challenging economic climate, the prospects for leading Brazilian businesses in global commerce are immense." Conyers Chairman John Collis commented, "The firm’s entry into Brazil and the other major BRIC (Brazil, Russia, India, and China) markets is part of our strategy to provide responsive advice to our clients in the world’s key financial centres and reinforces our strength as a leader in the market for offshore legal services."
Established in 1928, Conyers now has over 550 staff and 150 lawyers specialising in the financial laws of Anguilla, Bermuda, British Virgin Islands, Cayman and Mauritius Islands, Dubai, Hong Kong, London, Moscow, Singapore and now São Paulo.
As the only offshore firm to have an office in Brazil, the São Paulo practice will initially focus on investment funds, public company listings and holding company incorporations, providing clients with direct access to the key jurisdictions of the Cayman Islands, British Virgin Islands, Bermuda and Mauritius.
The São Paulo launch solidifies Conyers’ presence in the fast-growing BRIC markets. In March 2008, the firm became the first and only offshore firm to have an office in Russia with the launch of its Moscow office. In October 2008, Conyers established a presence in Mauritius, a preferred jurisdiction for structuring investments in India, and added the provision of Mauritius legal advice to its roster of jurisdictions to service the Indian, Middle Eastern and African markets.
"Even in this challenging economic climate, the prospects for leading Brazilian businesses in global commerce are immense." Conyers Chairman John Collis commented, "The firm’s entry into Brazil and the other major BRIC (Brazil, Russia, India, and China) markets is part of our strategy to provide responsive advice to our clients in the world’s key financial centres and reinforces our strength as a leader in the market for offshore legal services."
Established in 1928, Conyers now has over 550 staff and 150 lawyers specialising in the financial laws of Anguilla, Bermuda, British Virgin Islands, Cayman and Mauritius Islands, Dubai, Hong Kong, London, Moscow, Singapore and now São Paulo.
Meridian Fund Advisers Launch With Hedge Fund Specialist as Head
Hedge fund manager Meridian Global Fund Services Group has launched a hedge fund consulting affiliate team with Joyce E. Heinzerling as head.
The affiliate, Meridian Fund Advisers LLC, will provide hedge fund regulatory and corporate governance best practices advice to hedge funds both within and outside of the Meridian Global client base. In this capacity, Heinzerling will work side by side with her extensive network of leaders in the hedge fund legal and accounting fields.
“As President of Meridian Fund Advisers, Ms. Heinzerling will lead the development and delivery of our new hedge fund consulting affiliate, and help bring us to a position of distinction in the hedge fund administration industry in terms of a value add for our clients," said Randy Troy, President of Meridian Fund Services (USA) LLC.
"Meridian Fund Advisers essentially has been established to broaden and strengthen our dedication to clients in an effort to provide the highest level of client service in light of the increasingly complex issues that now arise in the hedge fund industry resulting from the heightened regulatory environment and exposure to litigation," Mr. Troy added.
Heinzerling joins Meridian Fund Advisers after serving nine years as General Counsel, CCO and Head of Operational Due Diligence at Archery Capital LLC, an investment adviser to emerging manager funds of funds. Prior to joining Archery Capital, Ms Heinzerling spent fourteen years in private practice advising hedge funds, venture capital funds, private equity funds, and mutual funds, as Asset Management Counsel at Shearman & Sterling and, before that, Kramer Levin Naftalis.
The affiliate, Meridian Fund Advisers LLC, will provide hedge fund regulatory and corporate governance best practices advice to hedge funds both within and outside of the Meridian Global client base. In this capacity, Heinzerling will work side by side with her extensive network of leaders in the hedge fund legal and accounting fields.
“As President of Meridian Fund Advisers, Ms. Heinzerling will lead the development and delivery of our new hedge fund consulting affiliate, and help bring us to a position of distinction in the hedge fund administration industry in terms of a value add for our clients," said Randy Troy, President of Meridian Fund Services (USA) LLC.
"Meridian Fund Advisers essentially has been established to broaden and strengthen our dedication to clients in an effort to provide the highest level of client service in light of the increasingly complex issues that now arise in the hedge fund industry resulting from the heightened regulatory environment and exposure to litigation," Mr. Troy added.
Heinzerling joins Meridian Fund Advisers after serving nine years as General Counsel, CCO and Head of Operational Due Diligence at Archery Capital LLC, an investment adviser to emerging manager funds of funds. Prior to joining Archery Capital, Ms Heinzerling spent fourteen years in private practice advising hedge funds, venture capital funds, private equity funds, and mutual funds, as Asset Management Counsel at Shearman & Sterling and, before that, Kramer Levin Naftalis.
13 Apr 2009
Singapore's Senior Minister to Host IFSB Summit
The 6th Annual Summit of the Islamic Financial Services Board (IFSB), is being held this year in Singapore under the patronage of Singapore's Senior Minister, Goh Chok Tong, it is themed The Future of Islamic Financial Services.
The annual IFSB Summit is the flagship event for the IFSB, and has traditionally attracted a select group of high-profile Islamic financial services industry stakeholders from across the globe. IFSB Secretary-General, Rifaat Ahmed Abdel Karim said "This 6th Summit is the first IFSB Summit to actually be held in East Asia."
26 regulators and senior personalities from international organisations, including the US, UK, EU, as well as the MENA and Asian regions, have confirmed chairing and speaking in the Summit.
The main objective of the Summit is to underline the role of the various stakeholders towards developing a robust future for Islamic financial services industry. It will be held on 7th – 8th May 2009.
The annual IFSB Summit is the flagship event for the IFSB, and has traditionally attracted a select group of high-profile Islamic financial services industry stakeholders from across the globe. IFSB Secretary-General, Rifaat Ahmed Abdel Karim said "This 6th Summit is the first IFSB Summit to actually be held in East Asia."
26 regulators and senior personalities from international organisations, including the US, UK, EU, as well as the MENA and Asian regions, have confirmed chairing and speaking in the Summit.
The main objective of the Summit is to underline the role of the various stakeholders towards developing a robust future for Islamic financial services industry. It will be held on 7th – 8th May 2009.
Goldman Sachs Raise $5.5 Billion For Private Equity Fund
Goldman Sachs Asset Management announced today that it has raised its fifth dedicated private equity secondaries fund, GS Vintage Fund V, with approximately $5.5 billion in capital commitments.
GS Vintage Fund V will focus primarily on acquiring portfolios of private equity assets, including limited partnership interests in private equity funds, as well as providing unique liquidity and capital solutions to both limited partners and general partners around the world.
The GS Vintage Funds evaluate opportunities ranging from $1 million to over $1 billion in size, across all private equity strategies and geographies. As one of the largest investors in the secondary market for private equity, the GS Vintage Funds draw on Goldman Sachs' global sourcing network, due diligence capabilities, risk management expertise, and extensive private equity relationships.
GS Vintage Fund V is the latest fund raised by the Alternative Investments & Manager Selection (AIMS) Group of Goldman Sachs Asset Management. With more than 200 professionals worldwide, the AIMS Group provides investors diversified and customized portfolio solutions, across traditional long-only managers, hedge funds, and private equity funds around the world. To date, the private equity strategies of the AIMS Group represent more than $32 billion of capital commitments across private equity fund-of-funds, secondary market funds and co-investment vehicles.
Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which manages $779 billion as of November 28, 2008. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1989 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
GS Vintage Fund V will focus primarily on acquiring portfolios of private equity assets, including limited partnership interests in private equity funds, as well as providing unique liquidity and capital solutions to both limited partners and general partners around the world.
The GS Vintage Funds evaluate opportunities ranging from $1 million to over $1 billion in size, across all private equity strategies and geographies. As one of the largest investors in the secondary market for private equity, the GS Vintage Funds draw on Goldman Sachs' global sourcing network, due diligence capabilities, risk management expertise, and extensive private equity relationships.
GS Vintage Fund V is the latest fund raised by the Alternative Investments & Manager Selection (AIMS) Group of Goldman Sachs Asset Management. With more than 200 professionals worldwide, the AIMS Group provides investors diversified and customized portfolio solutions, across traditional long-only managers, hedge funds, and private equity funds around the world. To date, the private equity strategies of the AIMS Group represent more than $32 billion of capital commitments across private equity fund-of-funds, secondary market funds and co-investment vehicles.
Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which manages $779 billion as of November 28, 2008. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1989 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
9 Apr 2009
CPIC Responds to SEC’s Proposed Curbs on Short-Selling
James Chanos, Chairman of the Coalition of Private Investment Companies, said in response to the SEC's five proposed rules put forward to curb short-selling, "Rebuilding investor confidence should be the primary objective of any new regulatory effort and it is not clear that today's proposals will meet that simple goal."
The SEC voted unanimously to seek public comments on all of the proposed rules intended to limit short-sales.
"Skeptics, independent research and critical analysis must continue to play a vibrant role for our markets to grow sustainably and with integrity." Chanos continued, "Short selling is integral to improving the efficiency of markets and enhancing market quality through narrower spreads, deeper liquidity, less volatility, and greater price discovery.
"In recent years, short-sellers have publicly warned the marketplace about the dangers at AIG, Lehman Brothers, and Enron, as well as sounding the alarm over the credit ratings agencies, non-bank subprime lenders, and credit insurers. Proposals to inhibit short-selling have the effect of limiting this vital market-based antidote to corporate fraud and speculative bubbles, and must be carefully weighed against the clear harm that comes from ill-conceived government intervention in basic market functions,” Chanos concluded.
CPIC is a coalition of private investment companies whose members and associates are diverse in both size and investment strategies.
The SEC voted unanimously to seek public comments on all of the proposed rules intended to limit short-sales.
"Skeptics, independent research and critical analysis must continue to play a vibrant role for our markets to grow sustainably and with integrity." Chanos continued, "Short selling is integral to improving the efficiency of markets and enhancing market quality through narrower spreads, deeper liquidity, less volatility, and greater price discovery.
"In recent years, short-sellers have publicly warned the marketplace about the dangers at AIG, Lehman Brothers, and Enron, as well as sounding the alarm over the credit ratings agencies, non-bank subprime lenders, and credit insurers. Proposals to inhibit short-selling have the effect of limiting this vital market-based antidote to corporate fraud and speculative bubbles, and must be carefully weighed against the clear harm that comes from ill-conceived government intervention in basic market functions,” Chanos concluded.
CPIC is a coalition of private investment companies whose members and associates are diverse in both size and investment strategies.
8 Apr 2009
Bank of NY Unit Expands Hedge Fund Consulting Services
Pershing LLC has expanded their business consulting services by including a hedge fund start-up simulator tool and a new guidebook to assist hedge fund managers with the launch of new funds. Pershing is a subsidiary of The Bank of New York Mellon Corporation BK.
Pershing Prime Services' Hedge Fund Start-Up Simulator was developed in collaboration with Moss Adams LLP. It provides hedge fund managers with detailed information about the infrastructure and financial workings of a hedge fund, especially during its first 18 months of operation, including the launch.
Pershing Prime Services' new guidebook entitled, A Guide to Establishing a Hedge Fund, was created in conjunction with The Bank of New York Mellon and offers an introduction to a number of critical criteria, as well as a framework for making informed business decisions.
Pershing and The Bank of New York Mellon leveraged a wide network of industry specialists to develop the guidebook, including Moss Adams, Eze Castle Integration, Inc., Stark & Stark Attorneys At Law and Sasserath & Zoraian LLP, as well as its in-house experts.
Pershing Prime Services' Hedge Fund Start-Up Simulator was developed in collaboration with Moss Adams LLP. It provides hedge fund managers with detailed information about the infrastructure and financial workings of a hedge fund, especially during its first 18 months of operation, including the launch.
Pershing Prime Services' new guidebook entitled, A Guide to Establishing a Hedge Fund, was created in conjunction with The Bank of New York Mellon and offers an introduction to a number of critical criteria, as well as a framework for making informed business decisions.
Pershing and The Bank of New York Mellon leveraged a wide network of industry specialists to develop the guidebook, including Moss Adams, Eze Castle Integration, Inc., Stark & Stark Attorneys At Law and Sasserath & Zoraian LLP, as well as its in-house experts.
Hedge Funds Increase 1.37% In March
March was a challenging month for hedge funds, which entered the month with tight net exposures, according to research by hedge fund consultant Hennessee LLC.
Technology and healthcare/biotech were bright spots for managers, as these sectors were relative outperformers. While the strong equity rally did cause short squeezes, most hedge fund managers expect short portfolios to generate profits in the near term.
The Hennessee Hedge Fund Index advanced +1.37% in March (+1.09% YTD), while the S&P 500 advanced +8.54% (-11.67% YTD).
“Most funds were caught with tight net exposures and were unable to participate in the rally," Charles Gradante, Co-Founder of Hennessee Group said, "Managers were also hurt as the sectors they have been heavily short, such as financials, consumer discretionary and materials, were the sectors that rallied the strongest.”
“Despite the underperformance in March relative to the equity benchmarks, hedge funds are still outperforming for the year,” said Lee Hennessee , Managing Principal of Hennessee Group. “We expect that we will continue to see volatility throughout the year.”
Technology and healthcare/biotech were bright spots for managers, as these sectors were relative outperformers. While the strong equity rally did cause short squeezes, most hedge fund managers expect short portfolios to generate profits in the near term.
The Hennessee Hedge Fund Index advanced +1.37% in March (+1.09% YTD), while the S&P 500 advanced +8.54% (-11.67% YTD).
“Most funds were caught with tight net exposures and were unable to participate in the rally," Charles Gradante, Co-Founder of Hennessee Group said, "Managers were also hurt as the sectors they have been heavily short, such as financials, consumer discretionary and materials, were the sectors that rallied the strongest.”
“Despite the underperformance in March relative to the equity benchmarks, hedge funds are still outperforming for the year,” said Lee Hennessee , Managing Principal of Hennessee Group. “We expect that we will continue to see volatility throughout the year.”
7 Apr 2009
SEC Halts Canada/China Hedge Fund Fraud
The Securities and Exchange Commission filed a restraining order yesterday to halt an on-going multi-million dollar Ponzi scheme. The SEC says that Defendant, Toronto hedge fund manager Weizhen Tang, orchestrated the fraud through an overseas hedge fund and a Texas-based investment adviser.
U.S. District Judge Jane Boyle granted a temporary restraining order, asset freeze, and other emergency relief against the Defendants, including the appointment of a receiver to take control of assets belonging to the Investment Adviser and two Relief Defendants — WinWin Capital Partners, LP, and Bluejay Investment, LLC, d/b/a Vintage International Investment, LLC.
The fraud began as early as 2004, and through the hedge fund Tang raised between $50 million and $75 million from more than 200 investors. According to the SEC complaint, Weizhen Tang (the self-described “Chinese Warren Buffet”) recently admitted to investors that the hedge fund operated as a Ponzi scheme since at least 2006.
Tang specifically targeted members of the Chinese-American community and solicited U.S. investors to directly and indirectly invest in the hedge fund, according to the SEC.
In addition to the emergency relief granted by the Court, the SEC wants permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil money penalties against the Defendants.
U.S. District Judge Jane Boyle granted a temporary restraining order, asset freeze, and other emergency relief against the Defendants, including the appointment of a receiver to take control of assets belonging to the Investment Adviser and two Relief Defendants — WinWin Capital Partners, LP, and Bluejay Investment, LLC, d/b/a Vintage International Investment, LLC.
The fraud began as early as 2004, and through the hedge fund Tang raised between $50 million and $75 million from more than 200 investors. According to the SEC complaint, Weizhen Tang (the self-described “Chinese Warren Buffet”) recently admitted to investors that the hedge fund operated as a Ponzi scheme since at least 2006.
Tang specifically targeted members of the Chinese-American community and solicited U.S. investors to directly and indirectly invest in the hedge fund, according to the SEC.
In addition to the emergency relief granted by the Court, the SEC wants permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil money penalties against the Defendants.
Hedge Funds Available In Sweden For The First Time
The Swedish state pension platform, PPM, is including Salus Alpha funds in their premium pension portfolio with immediate effect. The Salus Alpha funds that were chosen are UCITS III compliant, and meet the strict requirements regarding transparency, daily liquidity and adequate administration procedures set up for the Premium Pension Authority.
By launching the first UCITS III fund that tracks a hedge fund index in September 2007, Salus Alpha paved the way for hedge funds as an optimal portfolio component for retirement investment, by adding multi-manager alternative investment products, the returns can be increased while decreasing the risk.
The Swedish pension system is divided in three parts; income pension, guaranteed pension and premium pension. For the premium pension the pension saver has a number of funds to choose from. Every pension saver can decide in which fund and what amount of money he wants to invest. At the moment the Premium Pension Authority’s fund holdings of 5.8 million pension savers are valued at a total of 27.5 Billion Euro ($36.7 billion).
By including these funds in the portfolio the Swedish Premium Pension Authority confirmed the market leadership of Salus Alpha in the regulated alternative investment sector.
By launching the first UCITS III fund that tracks a hedge fund index in September 2007, Salus Alpha paved the way for hedge funds as an optimal portfolio component for retirement investment, by adding multi-manager alternative investment products, the returns can be increased while decreasing the risk.
The Swedish pension system is divided in three parts; income pension, guaranteed pension and premium pension. For the premium pension the pension saver has a number of funds to choose from. Every pension saver can decide in which fund and what amount of money he wants to invest. At the moment the Premium Pension Authority’s fund holdings of 5.8 million pension savers are valued at a total of 27.5 Billion Euro ($36.7 billion).
By including these funds in the portfolio the Swedish Premium Pension Authority confirmed the market leadership of Salus Alpha in the regulated alternative investment sector.
6 Apr 2009
Strong Performance In First Six Months For ACP Fund
London hedge fund manager ACP Partners, which is soon to merge with TriAlpha Investment Advisors, said that their long/short eguity strategy fund, ACP Financial Opportunities, has beaten its benchmark by over 65% in its first six months.
Since the fund launch on 1 September 2008 through 28 February 2009, the new fund, which invests across a group of portfolio managers focused on the financial sector, returned 4.9%. Its benchmark, the S&P 1200 Global Financials, returned -60.7% over the same period, and the HFRI Equity Hedge Index -22.2%.
"Financials account for around 20% of global equity market capitalisation and, despite benefiting from significant diversification, the financial sector as a whole exhibits a high degree of complexity and is under-covered by specialist investors." Stephen Greene, partner and CIO of the ACP’s Multi Manager business, said, "Having undergone an unprecedented shock, resulting in severe price dislocations, such conditions are ideal for sector specialist hedge fund managers to add value."
"The key to achieving positive returns has been portfolio construction. The portfolio was specifically structured to benefit from the expected market volatility as we placed significant emphasis on sourcing managers with trading orientated approaches, ‘macro-aware’ processes and short term catalysts for value realisation. Unusually, our fund was one of only a very few fund of funds to be market neutral over this period of turmoil." Greene concluded.
As examples, the portfolio currently shorts banks that lack balance sheet integrity and takes a long position on banks that have been through the exercise of write-downs and capital raises. The underlying managers also hold long positions in property and casualty insurers and reinsurers, who have strong balances sheets and will benefit from a firming of insurance premiums and decreased competition. Conversely, they have taken short positions in life insurance companies whose shorter term liabilities now far outweigh their available liquid assets. Several of the managers have been shorting consumer sensitive sectors, such as credit cards and consumer finance.
The fund has a minimim investment of $1,000,000 (or equivalent) with quarterly redemptions, and a managment fee of 1% and performance fee of 10%.
Since the fund launch on 1 September 2008 through 28 February 2009, the new fund, which invests across a group of portfolio managers focused on the financial sector, returned 4.9%. Its benchmark, the S&P 1200 Global Financials, returned -60.7% over the same period, and the HFRI Equity Hedge Index -22.2%.
"Financials account for around 20% of global equity market capitalisation and, despite benefiting from significant diversification, the financial sector as a whole exhibits a high degree of complexity and is under-covered by specialist investors." Stephen Greene, partner and CIO of the ACP’s Multi Manager business, said, "Having undergone an unprecedented shock, resulting in severe price dislocations, such conditions are ideal for sector specialist hedge fund managers to add value."
"The key to achieving positive returns has been portfolio construction. The portfolio was specifically structured to benefit from the expected market volatility as we placed significant emphasis on sourcing managers with trading orientated approaches, ‘macro-aware’ processes and short term catalysts for value realisation. Unusually, our fund was one of only a very few fund of funds to be market neutral over this period of turmoil." Greene concluded.
As examples, the portfolio currently shorts banks that lack balance sheet integrity and takes a long position on banks that have been through the exercise of write-downs and capital raises. The underlying managers also hold long positions in property and casualty insurers and reinsurers, who have strong balances sheets and will benefit from a firming of insurance premiums and decreased competition. Conversely, they have taken short positions in life insurance companies whose shorter term liabilities now far outweigh their available liquid assets. Several of the managers have been shorting consumer sensitive sectors, such as credit cards and consumer finance.
The fund has a minimim investment of $1,000,000 (or equivalent) with quarterly redemptions, and a managment fee of 1% and performance fee of 10%.
Hedge Fund Manager Silk Invest Launches Two Equity Funds
FSA regulated asset manager, Silk Invest Ltd, successfully launched the African Lions Fund and the Arab Falcons Fund, which helped the hedge fund manager achieve its goals in becoming a specialist in Arab and African equities.
The Luxembourg domiciled African Lions fund and Arab Falcons fund went live on 27th March with an NAV of Euro 100 ($135.2). The portfolio managers, based in London, Cairo, Casablanca and Johannesburg, plan to build up the portfolio up cautiously, taking advantage of liquidity opportunities.
"Raising assets in these markets proved extremely challenging," Zin Bekkali, CEO of Silk Invest said, "Ultimately, the strength of our investment proposition, and the valuation of the markets we specialise, convinced investors to support the launch."
African and Arab markets account for 4% of worldwide market capitalization and this is projected to increase as the region is set to further grow its share of the world’s GDP.
Baldwin Berges, director of business development, observed that “the funds should grow in size fairly rapidly. Investors understand well our proposition and we have built a pitch book in excess of Euro 500 million ($676.2 million). Many of these investors have committed to invest in our funds, once the fund is up and running.”
Daniel Broby, the Chief Investment Officer of Silk Invest says that the launch “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets of the dramatic declines caused by the credit crisis.”
The Luxembourg domiciled African Lions fund and Arab Falcons fund went live on 27th March with an NAV of Euro 100 ($135.2). The portfolio managers, based in London, Cairo, Casablanca and Johannesburg, plan to build up the portfolio up cautiously, taking advantage of liquidity opportunities.
"Raising assets in these markets proved extremely challenging," Zin Bekkali, CEO of Silk Invest said, "Ultimately, the strength of our investment proposition, and the valuation of the markets we specialise, convinced investors to support the launch."
African and Arab markets account for 4% of worldwide market capitalization and this is projected to increase as the region is set to further grow its share of the world’s GDP.
Baldwin Berges, director of business development, observed that “the funds should grow in size fairly rapidly. Investors understand well our proposition and we have built a pitch book in excess of Euro 500 million ($676.2 million). Many of these investors have committed to invest in our funds, once the fund is up and running.”
Daniel Broby, the Chief Investment Officer of Silk Invest says that the launch “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets of the dramatic declines caused by the credit crisis.”
Stark Opens NY Hedge Fund Hotel
"The bright side of an economic downturn is that business people are branching out on their own," said Adam Stark, president of Stark Business Solutions. "We have made it seamless for enterprising individuals to establish new businesses without significant expense and with very little risk. We are looking forward to helping grow the business community in Scarsdale."
Customized trading floors have been installed to accommodate hedge funds and trading operations along with mahogany furnishings. SBS operates three other executive suites in Westchester: White Plains, Mount Kisco and Harrison. More than 100 people attended the opening event.
Customized trading floors have been installed to accommodate hedge funds and trading operations along with mahogany furnishings. SBS operates three other executive suites in Westchester: White Plains, Mount Kisco and Harrison. More than 100 people attended the opening event.
3 Apr 2009
Hedge Fund Manager Capitalises On Mispriced Asian Performing Debt
Singapore hedge fund manager, 3 Degrees Asset Management, is launching ADF Prime Ltd, a credit opportunities fund that will invest primarily in the performing debt obligations of Asian companies that have been mispriced as a result of the Global Financial Crisis.
3 Degrees also manages the award winning Asian Debt Fund, an Asian distressed debt fund that has been active since 2004.
In Asia, debt prices have corrected far more sharply than in the US and Europe. This is driven by technical factors, the fund manager says, as Asian investment banks unwind their portfolios, global hedge funds close their Asian operations, and capital is generally pulled from the region.
The new fund will capitalize on the systemic inefficiencies endemic to Asian credit markets. Due to the limited number of players, and the highly relationship‐driven nature of Asian markets, inefficiencies are being exaggerated by the global financial crisis.
Targeting quality companies that either have, or can generate, enough cash flow to repay maturing debt without dependence on capital markets, the fund seeks annual, unlevered net returns in excess of 25%.
3 Degrees has received numerous awards, including “Best Asian Distressed Debt Fund”
and “Best Singapore Hedge Fund”. In 2007, Moe Ibrahim, the founder, was selected as
One of 20 Rising Stars of Hedge Funds by Institutional Investor. ADF Prime will be co‐managed by Moe Ibrahim and Jeff Tolk.
ADF Prime is also available to institutional investors and ultra high net worth individuals via the Firm’s Managed Accounts platform.
3 Degrees also manages the award winning Asian Debt Fund, an Asian distressed debt fund that has been active since 2004.
In Asia, debt prices have corrected far more sharply than in the US and Europe. This is driven by technical factors, the fund manager says, as Asian investment banks unwind their portfolios, global hedge funds close their Asian operations, and capital is generally pulled from the region.
The new fund will capitalize on the systemic inefficiencies endemic to Asian credit markets. Due to the limited number of players, and the highly relationship‐driven nature of Asian markets, inefficiencies are being exaggerated by the global financial crisis.
Targeting quality companies that either have, or can generate, enough cash flow to repay maturing debt without dependence on capital markets, the fund seeks annual, unlevered net returns in excess of 25%.
3 Degrees has received numerous awards, including “Best Asian Distressed Debt Fund”
and “Best Singapore Hedge Fund”. In 2007, Moe Ibrahim, the founder, was selected as
One of 20 Rising Stars of Hedge Funds by Institutional Investor. ADF Prime will be co‐managed by Moe Ibrahim and Jeff Tolk.
ADF Prime is also available to institutional investors and ultra high net worth individuals via the Firm’s Managed Accounts platform.
1 Apr 2009
Hedge Fund Shareholders Seek Legal action
A former hedge fund shareholder of Canadian securities company, Capital Units of Oil Sands Split Trust, is taking legal action regarding the Trust's Special Annual Retraction that occurred in December, 2008.
The hedge fund said it would take the complaint to the Ontario Superior Court of Justice for, among other things, the timing of the payout and reimbursment of the money owed.
Sentry Select said in a statement that the legal action is without merit and, if the application is brought, it will be vigorously defended.
The hedge fund said it would take the complaint to the Ontario Superior Court of Justice for, among other things, the timing of the payout and reimbursment of the money owed.
Sentry Select said in a statement that the legal action is without merit and, if the application is brought, it will be vigorously defended.
The Economist to Launch London Theme Park
As part of a strategy designed to broaden the revenue base, leverage content over new platforms and promote The Economist brand to a young and dynamic audience, The Economist Group is delighted to announce the development of a public-entertainment facility that combines the magic of a theme park with the excitement of macroeconomics.
After six months of negotiations with the British government, The Economist Group can confirm that Econoland will be built on a former industrial estate in East London, close to the beating heart of the City and thus to a large potential market of financial-sector employees.
Thanks to issues relating to its previous use, the site has been acquired at an advantageous price. Most of the toxic wastes have been cleared and levels of carcinogens appear to have returned to normal. High unemployment in the area will only increase the facility's attractions, as former City workers seek to recapture some of the excitement they enjoyed in their professional life. Heavy investment in security and a landscaped moat and electric fence will neutralise any potential threat from the growing anarchist presence.
Among the thrilling experiences Econoland will offer are:
The currency high-roller: Float like a butterfly with the euro and drop like a stone with the pound!
Chamber of horrors: Tremble at the wailing of distressed debt!
Fiscal fantasyland: Watch the economy shrivel before your very eyes as you struggle to stop growth falling!
Bankrupt Britain: Pit your wits against the government as you try to sink sterling and bring the country to its knees!
The severe contest: Try your strength against a bear market!
Econoland will appeal to the kid in everyone, although children themselves will not be admitted. The park will open on April 1st.
Explore a clickable map of The Economist's new theme park
31 Mar 2009
Hedge Funds Size/Performance, Crisis Analysis
West Palm Beach (HedgeCo.net) - A recent paper by AlternativeSoft regarding the influence of hedge fund size and strategy during the recent crisis, showed that that from July to December 2008, large and medium hedge funds outperformed their smaller peers in terms of returns; also large hedge funds outperformed smaller hedge funds in term of Sharpe ratio.
The study was done using the AlternativeSoft software platform, enabling the group to quickly run statistics on individual funds, as well as on a group of hedge funds.
Looking at CTA strategies, Equity Long-Short, Macro and Multi-Strategies, AlternativeSoft found that from July to December 2008, medium sized hedge funds using CTA, Equity Long-Short and Multi-Strategy performed the best; however the large sized funds had the best Sharpe Ratio. This indicates that the medium sized hedge funds were exposing themselves to slightly more risk (assuming risk is defined with volatility only). In Macro, the large funds had higher returns and larger Sharpe ratio than smaller funds.
In conclusion, the analysis found that the larger funds performed better than their smaller peers, occurring because larger funds were able to better manage risk than smaller funds. In addition, the larger funds had more experience as shown below with a longer track record history. So experience matters when crash comes.
The average track record for a hedge fund is:
Small, 66 months
Medium, 78 months
Large, 91 months
Super Large, 139 months
A basic strategy investing in the 10 Super Large hedge funds mixed with large hedge funds ($500m), would have easily outperformed the hedge fund indices and other smaller hedge funds, in term of returns and Sharpe ratio during 2008.
Hedge funds with assets over $10 million and funds of hedge funds were not included in the study. December 2008 data were not available for all funds. In the ‘Super-large’ group, two hedge funds had large returns, which may skew the results. AlternativeSoft intentionally does not use statistical measures like R-squared, t-statistics or Granger causality in order to keep the paper readable.
The study was done using the AlternativeSoft software platform, enabling the group to quickly run statistics on individual funds, as well as on a group of hedge funds.
Looking at CTA strategies, Equity Long-Short, Macro and Multi-Strategies, AlternativeSoft found that from July to December 2008, medium sized hedge funds using CTA, Equity Long-Short and Multi-Strategy performed the best; however the large sized funds had the best Sharpe Ratio. This indicates that the medium sized hedge funds were exposing themselves to slightly more risk (assuming risk is defined with volatility only). In Macro, the large funds had higher returns and larger Sharpe ratio than smaller funds.
In conclusion, the analysis found that the larger funds performed better than their smaller peers, occurring because larger funds were able to better manage risk than smaller funds. In addition, the larger funds had more experience as shown below with a longer track record history. So experience matters when crash comes.
The average track record for a hedge fund is:
Small, 66 months
Medium, 78 months
Large, 91 months
Super Large, 139 months
A basic strategy investing in the 10 Super Large hedge funds mixed with large hedge funds ($500m), would have easily outperformed the hedge fund indices and other smaller hedge funds, in term of returns and Sharpe ratio during 2008.
Hedge funds with assets over $10 million and funds of hedge funds were not included in the study. December 2008 data were not available for all funds. In the ‘Super-large’ group, two hedge funds had large returns, which may skew the results. AlternativeSoft intentionally does not use statistical measures like R-squared, t-statistics or Granger causality in order to keep the paper readable.
30 Mar 2009
Tax Information Assistance In Cayman Islands Extended to 20 Countries
The Cayman Islands Government today announced that it will provide access to comprehensive tax information assistance to 20 countries, including the majority of Cayman’s major trading partners.
Ireland, Japan, the Netherlands and South Africa now join eight other countries afforded tax information assistance to OECD standards, with a "unilateral mechanism, which does not require a bilateral treaty."
“The Cayman Islands took the proactive step of introducing the unilateral mechanism for the provision of information in tax matters, as a complement to our bilateral negotiation programme,” Cayman Islands Leader of Government Business, the Honourable Kurt Tibbetts said. “We recognised the need to increase the pace at which we could enter into tax information arrangements, while offering a phased approach to our negotiating partners under our bilateral programme in appropriate circumstances. We look forward to continuing this progressive approach.”
In combination, the arrangements noted above cover four of the seven G-7 states and 17 of the 30 OECD member states.
Based on its current negotiating programme – which reflects OECD countries (including significant trading partners) that have indicated interest in tax cooperation arrangements – the Cayman Islands aims in the following months to enter into arrangements with a number of additional countries, including the remaining G-7 and five other OECD member states.
Ireland, Japan, the Netherlands and South Africa now join eight other countries afforded tax information assistance to OECD standards, with a "unilateral mechanism, which does not require a bilateral treaty."
“The Cayman Islands took the proactive step of introducing the unilateral mechanism for the provision of information in tax matters, as a complement to our bilateral negotiation programme,” Cayman Islands Leader of Government Business, the Honourable Kurt Tibbetts said. “We recognised the need to increase the pace at which we could enter into tax information arrangements, while offering a phased approach to our negotiating partners under our bilateral programme in appropriate circumstances. We look forward to continuing this progressive approach.”
In combination, the arrangements noted above cover four of the seven G-7 states and 17 of the 30 OECD member states.
Based on its current negotiating programme – which reflects OECD countries (including significant trading partners) that have indicated interest in tax cooperation arrangements – the Cayman Islands aims in the following months to enter into arrangements with a number of additional countries, including the remaining G-7 and five other OECD member states.
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