Uzbekistan hedge fund manager, Ansher Fund Management, has reported that their flagship hedge fund, Ansher Regional Property Fund, (ARPF) has maintained its performance moderately stable at –0.37% during April-June 2009 despite the still lagging property markets around the globe.
"Property markets in the region, especially Kazakhstan residential segment, continued slowing in the quarter owing to still limited or expensive mortgage facilities for buyers," Khurshid Kholov, hedge fund manager and CIO said. "However, the decline rate in the region has been slower during the 2nd quarter as compared with previous quarters, showing signs of market recovery. Thanks to active portfolio management ARPF is still up by 0.80% since inception, thus comfortably outperforming all three benchmarks."
Despite the fact that the economy of Kazakhstan has been under pressure amid the global financial turmoil, a slight signs of economic recovery has been observed in the country, the fund manager said. It’s expected that the GDP of this oil rich country will not post negative growth for the year 2009, owing to currently recovering oil and commodity prices in the world markets.
This is the result of the antirecessionary measures the Government undertook in which $25 billion of funds were injected into the economy. About $4 billion out
of this amount was directed particularly into the real estate sector of the country.
ARPF has seen new investment opportunities in the hotel sector after the residential real estate market dropped out. "The hotel sector is immature and currently existing 4 five star hotels in Almaty operate with 90% occupancy rate," ARPF said.
A sharp deficit is expected to emerge with the Asian Winter Games which will take place in Almaty in 2011. Real estate sector of this energy house country still offers promising investment opportunities for property investors in the long term.
27 Jul 2009
Swiss Hedge Fund & FoHFs Provider Expands To US
Swiss based hedge fund and FoHFs provider, Infonic AG, has expanded to the US by establishing a New York office. Infonic named IT specialist Nolan Phillips as Chief Operating Officer, and financial expert, Bridget Piraino, Head of Global Marketing & Sales.
“I’m delighted to welcome Nolan Phillips and Bridget Piraino to the executive team. Adding to the depth of our management team demonstrates Infonic’s commitment to becoming the trusted operational backbone of the institutional hedge fund investor industry,” said Tom Furrer, Infonic’s CEO. “With the establishment of a New York office we will expand our presence delivering innovative products and dedicated client services to asset managers and administrators of funds of hedge funds.”
Nolan has held executive and consulting positions at Coopers and Lybrand, Union Bank of Switzerland, Société Générale, Bankers Trust, IQ Financial Systems and Bank of Bermuda, Alternative Investments Program.
Piraino's career has included Aregon International, the UK financial data delivery system provider, and Goldman Sachs and Co’s Fixed Income Research group. She held senior technical management and financial services marketing positions with Sybase, TIBCO Financial Systems and SeeBeyond.
Headquartered in Switzerland with offices in Zurich and New York, Infonic AG is the provider of HedgeSphere, a product suite for operations of funds of hedge funds.
“I’m delighted to welcome Nolan Phillips and Bridget Piraino to the executive team. Adding to the depth of our management team demonstrates Infonic’s commitment to becoming the trusted operational backbone of the institutional hedge fund investor industry,” said Tom Furrer, Infonic’s CEO. “With the establishment of a New York office we will expand our presence delivering innovative products and dedicated client services to asset managers and administrators of funds of hedge funds.”
Nolan has held executive and consulting positions at Coopers and Lybrand, Union Bank of Switzerland, Société Générale, Bankers Trust, IQ Financial Systems and Bank of Bermuda, Alternative Investments Program.
Piraino's career has included Aregon International, the UK financial data delivery system provider, and Goldman Sachs and Co’s Fixed Income Research group. She held senior technical management and financial services marketing positions with Sybase, TIBCO Financial Systems and SeeBeyond.
Headquartered in Switzerland with offices in Zurich and New York, Infonic AG is the provider of HedgeSphere, a product suite for operations of funds of hedge funds.
24 Jul 2009
Multi-strategy Malta Hedge Fund Launch
Malta-based Golden Hedge Umbrella Sicav has launched a multi-strategy hedge fund and is currently looking for prospective seed investors.
The Golden Hedge Multi-Strategy Fund is the first subfund of the umbrella structure, run by Andreas Koettner and Dr. Bernhard Goetsch, the new hedge find specializes in relative value commodity trading and stock index arbitrage strategies.
Targeting an annualized return of 15% with volatility at 8%.The quantitative strategies are designed to generate returns with low correlation to traditional CTA and hedge fund styles. Inception of trading was in May 2009.
Minimum investment starts at EUR100,000 ($142,000) with monthly liquidity. The auditor is Ernst & Young, prime broker MF Global and fund administrator Valletta Fund Services.
The Golden Hedge Multi-Strategy Fund is the first subfund of the umbrella structure, run by Andreas Koettner and Dr. Bernhard Goetsch, the new hedge find specializes in relative value commodity trading and stock index arbitrage strategies.
Targeting an annualized return of 15% with volatility at 8%.The quantitative strategies are designed to generate returns with low correlation to traditional CTA and hedge fund styles. Inception of trading was in May 2009.
Minimum investment starts at EUR100,000 ($142,000) with monthly liquidity. The auditor is Ernst & Young, prime broker MF Global and fund administrator Valletta Fund Services.
23 Jul 2009
Cayman Islands Hedge Funds and Capital Markets in India
A study by Dennis S. Ryan and Sonia Xavier of offshore law specialist, Conyers Dill & Pearman has come out 'Cayman Islands Funds - Entering the Gateway to Capital Markets in India.' The team describes the history and challenges of what Cayman Islands domiciled investment funds have faced when seeking to invest into Indian capital markets.
One of the major hurdles in this regard has been addressed by the 10 June 2009 admission of the Cayman Islands Monetary Authority (“CIMA”) as an ordinary (i.e., full) member of the International Organization of Securities Commissions (“IOSCO”), according to the report.
By way of background, the IOSCO Objectives and Principles of Securities Regulation were endorsed by its member regulators of various securities and futures markets in 1998, and generally are viewed by securities regulators as the key international benchmark on sound principles and practices for securities regulation. Currently, IOSCO members regulate the vast majority of the world's securities markets.
To access the Indian markets, an investment fund must register as a Foreign Institutional Investor (“FII”) with The Securities and Exchange Board of India (“SEBI”). In the past, since CIMA was not a member of IOSCO, SEBI often engaged in extensive due diligence and inquiries before allowing registration of a Cayman fund as a FII. As a result, few Cayman Islands funds have registered with SEBI. CIMA’s admission to IOSCO looks set to change this trend in favour of Cayman Islands funds.
The timing could not be better, the report says, with emerging markets competing to attract liquidity, the Cayman Islands, with over 9,000 CIMA registered investment funds, a proven track record with investors and an excellent and sophisticated service infrastructure, has a great deal to offer India and investors that wish to access its markets.
One remaining challenge is that the Cayman Islands do not currently have a tax treaty with India, the law fim asid. Mauritius, on the other hand, has long been the preferred jurisdiction for investment into India as a consequence of the favourable double taxation agreement between those countries (the “Mauritius-India DTAA”), contributing to around 44% of foreign direct investment (“FDI”) into India.
Investment funds from non-tax treaty jurisdictions have developed a structure involving a wholly owned Mauritius subsidiary for purposes of Indian investment. Typically, this structure requires a Cayman Islands (or other non-treaty jurisdiction) investment fund to register with SEBI as a FII. The Mauritius subsidiary fund will then be registered with SEBI as a sub-account of the FII, permitting it to invest directly in Indian securities via SEBI.
The Mauritius fund will be set up as a Global Business Company Category 1 (“GBC1”) that is resident in Mauritius for tax purposes. As a Mauritius tax resident, this fund is subject to tax on income at the flat rate of 15%. However it is entitled to claim a credit for foreign tax on income not derived from Mauritius against the Mauritius tax payable, resulting in an effective tax rate generally ranging between 3% and nil. As a tax resident GBC1, the fund is also entitled to take advantage of Mauritius’ network of tax treaties, including the Mauritius-India DTAA.
One of the major hurdles in this regard has been addressed by the 10 June 2009 admission of the Cayman Islands Monetary Authority (“CIMA”) as an ordinary (i.e., full) member of the International Organization of Securities Commissions (“IOSCO”), according to the report.
By way of background, the IOSCO Objectives and Principles of Securities Regulation were endorsed by its member regulators of various securities and futures markets in 1998, and generally are viewed by securities regulators as the key international benchmark on sound principles and practices for securities regulation. Currently, IOSCO members regulate the vast majority of the world's securities markets.
To access the Indian markets, an investment fund must register as a Foreign Institutional Investor (“FII”) with The Securities and Exchange Board of India (“SEBI”). In the past, since CIMA was not a member of IOSCO, SEBI often engaged in extensive due diligence and inquiries before allowing registration of a Cayman fund as a FII. As a result, few Cayman Islands funds have registered with SEBI. CIMA’s admission to IOSCO looks set to change this trend in favour of Cayman Islands funds.
The timing could not be better, the report says, with emerging markets competing to attract liquidity, the Cayman Islands, with over 9,000 CIMA registered investment funds, a proven track record with investors and an excellent and sophisticated service infrastructure, has a great deal to offer India and investors that wish to access its markets.
One remaining challenge is that the Cayman Islands do not currently have a tax treaty with India, the law fim asid. Mauritius, on the other hand, has long been the preferred jurisdiction for investment into India as a consequence of the favourable double taxation agreement between those countries (the “Mauritius-India DTAA”), contributing to around 44% of foreign direct investment (“FDI”) into India.
Investment funds from non-tax treaty jurisdictions have developed a structure involving a wholly owned Mauritius subsidiary for purposes of Indian investment. Typically, this structure requires a Cayman Islands (or other non-treaty jurisdiction) investment fund to register with SEBI as a FII. The Mauritius subsidiary fund will then be registered with SEBI as a sub-account of the FII, permitting it to invest directly in Indian securities via SEBI.
The Mauritius fund will be set up as a Global Business Company Category 1 (“GBC1”) that is resident in Mauritius for tax purposes. As a Mauritius tax resident, this fund is subject to tax on income at the flat rate of 15%. However it is entitled to claim a credit for foreign tax on income not derived from Mauritius against the Mauritius tax payable, resulting in an effective tax rate generally ranging between 3% and nil. As a tax resident GBC1, the fund is also entitled to take advantage of Mauritius’ network of tax treaties, including the Mauritius-India DTAA.
Hedge Fund Managers as Registered SEC Advisors
"One of the focal points of the Obama Administration’s Financial System Regulatory Reform Plan is to seek the passage of legislation that would require hedge fund managers (as well as other private fund managers) to become registered as investment advisors with the SEC and be in compliance with the applicable requirements under the Investment Advisers Act." HedgeOp Compliance said, announcing the launch of a new service to help managers deal with current registration issues.
There are presently three bills pending in Congress and a recent proposal from the Treasury that would achieve that goal if passed. “We are seeing a lot of activity as hedge fund managers look to get ahead of the curve on these requirements and starting the process sooner rather than later." Bill Mulligan, the CEO of HedgeOp said, "In addition to allowing for key thoughtful planning, addressing the registration issue early will provide a great deal of comfort to investors and prospective investors."
The newly launched ADVassist is designed to provide focused registration and compliance guidance, the hedge fund consulting firm said, to not only complete the registration process, but also to create a foundation for development of a compliance culture and infrastructure.
There are presently three bills pending in Congress and a recent proposal from the Treasury that would achieve that goal if passed. “We are seeing a lot of activity as hedge fund managers look to get ahead of the curve on these requirements and starting the process sooner rather than later." Bill Mulligan, the CEO of HedgeOp said, "In addition to allowing for key thoughtful planning, addressing the registration issue early will provide a great deal of comfort to investors and prospective investors."
The newly launched ADVassist is designed to provide focused registration and compliance guidance, the hedge fund consulting firm said, to not only complete the registration process, but also to create a foundation for development of a compliance culture and infrastructure.
22 Jul 2009
Hedge Fund Inflows Reach $19.2 Billion
Hedge funds attracted $19 billion of fresh capital (gross) in June, marking their second consecutive month of net inflows of $6 billion. Nearly 75% of all reporting hedge funds are in the black for H12009, with event driven funds up an impressive 19% (YTD), on average, according to Eurekahedge.
Gross inflows into hedge funds totalled a healthy $19.2 billion (or 1.5% of end-May assets), about two-thirds of which were negated by redemptions of $13 billion. A good portion of these redemptions (nearly $5 billion) represented the assets withdrawn by funds of hedge funds, which continued to witness redemption pressures as investors are increasingly opting to invest directly into hedge funds for better returns and capital protection, as well as relatively lower fees.
The Eurekahedge Hedge Fund Index gained 9.5% while the S&P 500 rose 1.8% over 1H2009. Since Jan-2007, hedge funds are up 10.4%, while the S&P 500 is down over 35%.
Gross inflows into hedge funds totalled a healthy $19.2 billion (or 1.5% of end-May assets), about two-thirds of which were negated by redemptions of $13 billion. A good portion of these redemptions (nearly $5 billion) represented the assets withdrawn by funds of hedge funds, which continued to witness redemption pressures as investors are increasingly opting to invest directly into hedge funds for better returns and capital protection, as well as relatively lower fees.
The Eurekahedge Hedge Fund Index gained 9.5% while the S&P 500 rose 1.8% over 1H2009. Since Jan-2007, hedge funds are up 10.4%, while the S&P 500 is down over 35%.
1H 2009 Hedge Fund Update: Halfway There - Report
Six months after their worst drawdown on record, hedge funds appear to be demonstrating stronger performance than in some previous recovery periods, such as during the Asian Currency Crisis and the Tech Bubble Burst events.
On average, it has taken hedge funds 13 months to recover from these market disruptions accordind to research peice by Credit Suisse Tremont Index LLC, the research reviews of how hedge funds have repositioned themselves in the first half of 2009 to generate positive returns for five out of the first six months of the year.
The report discusses how hedge funds, as measured by the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”), have generated year-to-date returns of 7.2% through June 30, outperforming, with lower volatility, both key equity and bond indices. Some key takeaways from the report include:
The Convertible Arbitrage, Emerging Markets, and Global Macro sectors have received increased attention as investors began to regain their appetite for risk and global markets rallied.
Performance has improved across most sectors, with the bulk of returns for many strategies moving into positive territory for the year, with 80% of all funds reporting positive returns for the second quarter.
Overall industry assets under management have dropped approximately $18 billion since the end of the first quarter of 2009; we estimate industry assets totaled $1.3 trillion as of June 30 - down from $1.5 trillion at the end of 2008.
As of June 30, 2009, an estimated 9.6% of funds were classified as impaired, meaning they have either suspended redemptions, imposed gate provisions or sidepocketed assets.
On average, it has taken hedge funds 13 months to recover from these market disruptions accordind to research peice by Credit Suisse Tremont Index LLC, the research reviews of how hedge funds have repositioned themselves in the first half of 2009 to generate positive returns for five out of the first six months of the year.
The report discusses how hedge funds, as measured by the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”), have generated year-to-date returns of 7.2% through June 30, outperforming, with lower volatility, both key equity and bond indices. Some key takeaways from the report include:
The Convertible Arbitrage, Emerging Markets, and Global Macro sectors have received increased attention as investors began to regain their appetite for risk and global markets rallied.
Performance has improved across most sectors, with the bulk of returns for many strategies moving into positive territory for the year, with 80% of all funds reporting positive returns for the second quarter.
Overall industry assets under management have dropped approximately $18 billion since the end of the first quarter of 2009; we estimate industry assets totaled $1.3 trillion as of June 30 - down from $1.5 trillion at the end of 2008.
As of June 30, 2009, an estimated 9.6% of funds were classified as impaired, meaning they have either suspended redemptions, imposed gate provisions or sidepocketed assets.
21 Jul 2009
Insight Into June Hedge Fund Performance - Credit Suisse/Tremont
Long/Short Equity managers who maintained a cautious stance through the recent market run-up appeared to be positioned to profit as markets shifted from cyclicals to defensives in June. Overall, the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) finished up 0.43% for June, bringing year to date to 7.18%.
Convertible Arbitrage funds continued to post the best performance of all the strategies in the Broad Index, with 4.05% for June and 23.95% cumulative performance YTD, Credit Suisse/Tremont Index's monthly commentary reported. As equity markets’ recovered in the second quarter, managers began to profit again from the volatility arbitrage aspect of the strategy.
Overall, Emerging Markets finished the month relatively flat despite a rebound in economic activity in Asia, as countries across the region saw rising industrial and manufacturing output, the Index reported.
Credit-oriented hedge funds performed well as credit markets showed healthy activity, with $102 billion of investment grade bonds brought to the market in June. Many believe continued governments’ activism in the markets could provide additional opportunities for these managers.
Global Macro hedge funds posted their first negative monthly performance since October 2008 as the sell-off of short rates in US Treasuries negatively impacted the positions of a number of Global Macro hedge funds early in the month, Credit Suisse/Tremont said.
Convertible Arbitrage funds continued to post the best performance of all the strategies in the Broad Index, with 4.05% for June and 23.95% cumulative performance YTD, Credit Suisse/Tremont Index's monthly commentary reported. As equity markets’ recovered in the second quarter, managers began to profit again from the volatility arbitrage aspect of the strategy.
Overall, Emerging Markets finished the month relatively flat despite a rebound in economic activity in Asia, as countries across the region saw rising industrial and manufacturing output, the Index reported.
Credit-oriented hedge funds performed well as credit markets showed healthy activity, with $102 billion of investment grade bonds brought to the market in June. Many believe continued governments’ activism in the markets could provide additional opportunities for these managers.
Global Macro hedge funds posted their first negative monthly performance since October 2008 as the sell-off of short rates in US Treasuries negatively impacted the positions of a number of Global Macro hedge funds early in the month, Credit Suisse/Tremont said.
20 Jul 2009
Fund Of Hedge Fund Operational Due Dillegence - Study
Jason Scharfman, Managing Partner at Corgentum Consulting, LLC, sent me a recently completed a study focused on operational risk frameworks in fund of hedge funds, 'Analyzing Operational Due Diligence Frameworks In Fund of Hedge Funds.'
In short, they analyzed and surveyed over 275 hedge fund allocation organizations (primarily fund of funds) around the world with a variety of AUM (39% managed less than 1 billion and 61% managed more than 1 billion) to study their operational due diligence frameworks:
Some of the key findings include:
Only 27% of Fund of Funds have a full time person on staff or team dedicated to fraud detection
Less resources are dedicated to operational due diligence in the US as compared to the rest of the world (Asia and Europe):
In Asia and Europe there is a trend towards dedicated operational due diligence functions
In North America shared operational due diligence frameworks (where the same people who perform investment due diligence look at operational risk) are the most common
There is lack of consistency in fund of hedge funds operational due diligence approaches
Smaller fund of hedge funds (under USD $1 billion) use a wide variety of operational due diligence frameworks with less dedicated resources
Full report available here.
Jason Scharfman is also the author of the book: “Hedge Fund Operational Due Diligence: Understanding the Risks.”
In short, they analyzed and surveyed over 275 hedge fund allocation organizations (primarily fund of funds) around the world with a variety of AUM (39% managed less than 1 billion and 61% managed more than 1 billion) to study their operational due diligence frameworks:
Some of the key findings include:
Only 27% of Fund of Funds have a full time person on staff or team dedicated to fraud detection
Less resources are dedicated to operational due diligence in the US as compared to the rest of the world (Asia and Europe):
In Asia and Europe there is a trend towards dedicated operational due diligence functions
In North America shared operational due diligence frameworks (where the same people who perform investment due diligence look at operational risk) are the most common
There is lack of consistency in fund of hedge funds operational due diligence approaches
Smaller fund of hedge funds (under USD $1 billion) use a wide variety of operational due diligence frameworks with less dedicated resources
Full report available here.
Jason Scharfman is also the author of the book: “Hedge Fund Operational Due Diligence: Understanding the Risks.”
Hedge Fund Replication Mutual Fund Marks One-Year Anniversary
One of the first no-load, open-end mutual funds designed to replicate broad-based hedge fund performance characteristics, the 'IQ ALPHA Hedge Strategy Fund' (IQHIX) has marked its one-year anniversary on June 30th, 2009.
For the trailing 12-month period, the fund was down -2.58 percent, compared to a loss of -26.21 percent for the S&P 500.
“The performance over the past year can be attributed to a number of factors, including the ability of the fund to hold both long and short positions, and the liquidity of the ETFs used to represent asset class exposures,” said Adam Patti, IndexIQ’s Chief Executive Officer. “As a result, we were able to continuously execute our strategy during the period, something not all hedge funds could do.”
The fund works by optimizing the relative index weights among six hedge fund strategies, Equity Long/Short; Global Macro; Emerging Markets; Fixed Income Arbitrage; Equity Market Neutral; and Event Driven.
The funds do not invest in hedge funds, but use ETFs and a variety of other highly liquid financial instruments to provide exposure to the components of the index in approximately the same weighting. It employs leverage totaling 25 percent of the portfolio to magnify returns.
For the trailing 12-month period, the fund was down -2.58 percent, compared to a loss of -26.21 percent for the S&P 500.
“The performance over the past year can be attributed to a number of factors, including the ability of the fund to hold both long and short positions, and the liquidity of the ETFs used to represent asset class exposures,” said Adam Patti, IndexIQ’s Chief Executive Officer. “As a result, we were able to continuously execute our strategy during the period, something not all hedge funds could do.”
The fund works by optimizing the relative index weights among six hedge fund strategies, Equity Long/Short; Global Macro; Emerging Markets; Fixed Income Arbitrage; Equity Market Neutral; and Event Driven.
The funds do not invest in hedge funds, but use ETFs and a variety of other highly liquid financial instruments to provide exposure to the components of the index in approximately the same weighting. It employs leverage totaling 25 percent of the portfolio to magnify returns.
17 Jul 2009
Rosemawr Municipal Partners Fund Launch
Rosemawr Management LLC, two months ago launched the Rosemawr Municipal Partner Fund LP,. The fund has seen returns of 0.82% in May and 0.86% in June, since inception on May 1st 2009.
With former Managing Director at Lehman Brothers, Greg Shlionsky, as portfolio manager, the new fund's investment approach is fundamentals-driven. The investment team believes it possesses a unique understanding of municipal investments’ fundamentals. The investment strategy is based on thorough analysis of securities’ structure and credit, rather than on short-term momentum or technicals.
The fund limits its capital allocation (before leverage) to any one investment to 15% of the Fund (with exceptions made for short-term very liquid securities). Leverage is only applied to securities that the Investment Team considers liquid.
Rosemawr Management LLC, the Fund Manager, is an SEC-registered Investment Adviser focused exclusively on the U.S. Municipal market. The Fund’s Investment Team is comprised of professionals who draw on decades of senior-level experience overseeing municipal portfolios and major trading desks to manage credit, interest rate and event risk. Average Principal’s tenure in the municipal market is 20 years.
In addition to the fund, Rosemawr oversees value-added municipal strategies for family offices (including those of Forbes 100 and Forbes 400 families), ultra high net-worth individuals, and select institutional clients.
With former Managing Director at Lehman Brothers, Greg Shlionsky, as portfolio manager, the new fund's investment approach is fundamentals-driven. The investment team believes it possesses a unique understanding of municipal investments’ fundamentals. The investment strategy is based on thorough analysis of securities’ structure and credit, rather than on short-term momentum or technicals.
The fund limits its capital allocation (before leverage) to any one investment to 15% of the Fund (with exceptions made for short-term very liquid securities). Leverage is only applied to securities that the Investment Team considers liquid.
Rosemawr Management LLC, the Fund Manager, is an SEC-registered Investment Adviser focused exclusively on the U.S. Municipal market. The Fund’s Investment Team is comprised of professionals who draw on decades of senior-level experience overseeing municipal portfolios and major trading desks to manage credit, interest rate and event risk. Average Principal’s tenure in the municipal market is 20 years.
In addition to the fund, Rosemawr oversees value-added municipal strategies for family offices (including those of Forbes 100 and Forbes 400 families), ultra high net-worth individuals, and select institutional clients.
16 Jul 2009
The Private Fund Investment Advisers Registration Act of 2009
Richard H. Baker, President and CEO of the Managed Funds Association (MFA) wrote a letter to MFA members this afternoon, highlighting today’s announcement by the Obama Administration requiring all advisers to hedge funds and other private pools of capital, including private equity and venture capital funds, to register with the Securities and Exchange Commission (SEC).
Baker highlights how the Administration’s proposed legislation would:
* eliminate the private adviser exception in the Investment Advisers Act and require hedge fund managers and other investment advisers to private investment pools with at least $30 million in assets under management to register with the SEC;
* eliminate the exemption from registration in the Advisers Act for certain commodity trading advisors registered with the CFTC if the commodity trading advisor acts as an investment adviser to a private fund (defined as a company that would be an investment company under the Investment Company Act of 1940 but for the exceptions contained in Section 3(c)(1) or Section 3(c)(7));
Read the rest
Hedge Fund Regulation Guide
Baker highlights how the Administration’s proposed legislation would:
* eliminate the private adviser exception in the Investment Advisers Act and require hedge fund managers and other investment advisers to private investment pools with at least $30 million in assets under management to register with the SEC;
* eliminate the exemption from registration in the Advisers Act for certain commodity trading advisors registered with the CFTC if the commodity trading advisor acts as an investment adviser to a private fund (defined as a company that would be an investment company under the Investment Company Act of 1940 but for the exceptions contained in Section 3(c)(1) or Section 3(c)(7));
Read the rest
Hedge Fund Regulation Guide
SYZ & CO Expands To Hedge Funds & FoHF's In Spain
International hedge fund manager and Swiss banking group, SYZ & CO, has acquired 50% of the asset management company owned by Spanish alternative investment group N+1.
The joint venture, named “N+1 SYZ Gestión”, will provide asset management services to high level clients in Spain, providing discretionary or advisory mandates for large family groups or institutional clients, as well as for investment funds and funds of hedge funds.
“As has been the case in Italy, we have preferred entering into a partnership with a solid and well-established local partner. This enables us to provide offerings that are adapted to the specific nature of the local market”, said Alfredo Piacentini, Managing Partner at Banque SYZ & CO. “We are particularly satisfied with our partnership with N+1, a group we have known for many years, and with which we share the same vision and values.”
“The Spanish asset management market is in the midst of dramatic change and today there is real demand for high level international asset management expertise; our alliance with SYZ & CO will enable us to successfully meet this demand”, said Santiago Eguidazu, N+1’s President. “SYZ & CO enjoys a strong reputation in the Spanish market and there are strong synergies between our two asset management groups.”
N+1 Group company currently has approximately CHF 400million ($353 million) in assets under management. The transaction is subject to approval by the CNMV, the Spanish financial markets regulatory authority. SYZ & CO's total assets under management now exceed CHF 3.2bn ($2.9 billion).
The joint venture, named “N+1 SYZ Gestión”, will provide asset management services to high level clients in Spain, providing discretionary or advisory mandates for large family groups or institutional clients, as well as for investment funds and funds of hedge funds.
“As has been the case in Italy, we have preferred entering into a partnership with a solid and well-established local partner. This enables us to provide offerings that are adapted to the specific nature of the local market”, said Alfredo Piacentini, Managing Partner at Banque SYZ & CO. “We are particularly satisfied with our partnership with N+1, a group we have known for many years, and with which we share the same vision and values.”
“The Spanish asset management market is in the midst of dramatic change and today there is real demand for high level international asset management expertise; our alliance with SYZ & CO will enable us to successfully meet this demand”, said Santiago Eguidazu, N+1’s President. “SYZ & CO enjoys a strong reputation in the Spanish market and there are strong synergies between our two asset management groups.”
N+1 Group company currently has approximately CHF 400million ($353 million) in assets under management. The transaction is subject to approval by the CNMV, the Spanish financial markets regulatory authority. SYZ & CO's total assets under management now exceed CHF 3.2bn ($2.9 billion).
Appeals Court Dismisses Fraud Charges Against Hedge Fund Advisor Hennessee Group
The U.S. Court of Appeals affirmed a district court’s decision that also dismissed a securities fraud case against New York-based hedge fund investment adviser Hennessee Group LLC.
Judge Colleen McMahon of the U.S. District Court for the Southern District of New York that dismissed claims of breach of contract and securities fraud in South Cherry Street, LLC. v. Hennessee Group. All of South Cherry’s arguments on the appeal were found to be without merit.
The claims were in connection with Hennessee's investment advice regarding Bayou Management’s hedge funds that were uncovered as part of a large Ponzi scheme, for which Bayou’s principals were found guilty of securities fraud in 2005.
“We are delighted with the Second Circuit’s decision that finds all claims of breach of contract and securities fraud against Hennessee are without merit. Bayou’s Ponzi scheme caused many unfortunate events, but the Court’s decision establishes that Hennessee was not a participant on any level,” said Bennett Falk, Hennessee’s trial counsel and a partner in the securities litigation and regulatory practice group in the Florida office of Bressler, Amery and Ross, P.C.
Judge Colleen McMahon of the U.S. District Court for the Southern District of New York that dismissed claims of breach of contract and securities fraud in South Cherry Street, LLC. v. Hennessee Group. All of South Cherry’s arguments on the appeal were found to be without merit.
The claims were in connection with Hennessee's investment advice regarding Bayou Management’s hedge funds that were uncovered as part of a large Ponzi scheme, for which Bayou’s principals were found guilty of securities fraud in 2005.
“We are delighted with the Second Circuit’s decision that finds all claims of breach of contract and securities fraud against Hennessee are without merit. Bayou’s Ponzi scheme caused many unfortunate events, but the Court’s decision establishes that Hennessee was not a participant on any level,” said Bennett Falk, Hennessee’s trial counsel and a partner in the securities litigation and regulatory practice group in the Florida office of Bressler, Amery and Ross, P.C.
15 Jul 2009
Swiss Hedge Fund Buy-Back Program Equalises Share Price With NAV
In order to achieve capital reduction, Swiss alternative investment company ALTIN AG has launched a share buyback program as part of a broader range of measures to reduce share price discount.
The hedge fund company has already succeeded in bringing the difference between the NAV and the share price from 33% at the end of 2008 to 21.7%. This, among other things, should enable ALTIN’s stock market price to come closer to the NAV.
The Annual General Meeting of shareholders approved a share buyback programme of up to 10% of the share capital. A second trading line for the registered shares of ALTIN will be opened on the SIX Swiss Exchange on 22 July 2009. ALTIN intends to buy back up to 5% of its shares until the end of March 2010.
The offer may be accepted only by Non-US persons, outside the United States.
The hedge fund company has already succeeded in bringing the difference between the NAV and the share price from 33% at the end of 2008 to 21.7%. This, among other things, should enable ALTIN’s stock market price to come closer to the NAV.
The Annual General Meeting of shareholders approved a share buyback programme of up to 10% of the share capital. A second trading line for the registered shares of ALTIN will be opened on the SIX Swiss Exchange on 22 July 2009. ALTIN intends to buy back up to 5% of its shares until the end of March 2010.
The offer may be accepted only by Non-US persons, outside the United States.
People Moves: Hedge Fund Hires 2 Asia Veterans
Hedge fund manager OakRun Capital announced the appointment of Mark Potter and Brian Long, both experienced Asia investment executives. The expansion is to build strategic relationships with local institutional investors and provide access to its hedge funds and investment products, including the new OakRun Short Term Income Fund.
Potter, an experienced investment executive based in Singapore, joins the firm as Director of Asia Institutional Marketing and Distribution. Long, a senior level investment professional based in Singapore, has been named Director of Asia Institutional Relations.
The OakRun Short Term Income Fund charges a 1% management fee and a 10% incentive fee with a $1MM minimum investment requirement, it returned 0.73% (9.26% Annual Yield) for June 2009 and paid out its third quarterly dividend.
“Asia is a natural market for OakRun Capital," Potter explained, "Together, the team has extensive experience in the region, speaks several local languages and has built very strong personal and institutional relationships."
"The flagship Short-Term Income Fund has received incredible initial feedback from institutions. There are very few products or funds, if any, like the OakRun Short Term Income fund that can provide investors with high credit quality, superior performance, and stable income distributions. The fund is invested in highly liquid instruments with substantially higher yields than comparable investments with duration of less than 45 days," Portfolio Manager, Arturo Neto, CFA, said.
Potter, an experienced investment executive based in Singapore, joins the firm as Director of Asia Institutional Marketing and Distribution. Long, a senior level investment professional based in Singapore, has been named Director of Asia Institutional Relations.
The OakRun Short Term Income Fund charges a 1% management fee and a 10% incentive fee with a $1MM minimum investment requirement, it returned 0.73% (9.26% Annual Yield) for June 2009 and paid out its third quarterly dividend.
“Asia is a natural market for OakRun Capital," Potter explained, "Together, the team has extensive experience in the region, speaks several local languages and has built very strong personal and institutional relationships."
"The flagship Short-Term Income Fund has received incredible initial feedback from institutions. There are very few products or funds, if any, like the OakRun Short Term Income fund that can provide investors with high credit quality, superior performance, and stable income distributions. The fund is invested in highly liquid instruments with substantially higher yields than comparable investments with duration of less than 45 days," Portfolio Manager, Arturo Neto, CFA, said.
14 Jul 2009
MFA Commends CCP Working Group Report
Hedge fund, funds of funds and managed futures funds group, the Managed Funds Association (MFA) has commended the working group paper, “Report to the Supervisors of the Major OTC Derivatives Dealers on the Proposals of Centralized CDS Clearing Solutions for the Segregation and Portability of Customer CDS Positions and Related Margin,” which was submitted to industry regulators on June 30, 2009.
"The efforts of the special working group and the Report are both comprehensive and timely." Richard H. Baker, MFA President and CEO, said, "MFA has been a strong proponent in advocating collateral segregation, portability of trades and direct and indirect buy-side access to centralized clearing. We remain committed to working with industry regulators, industry working groups such as the Operations Management Group, and other trade associations on the next steps toward providing such access."
The report was written by a special working group of eight dealers, four MFA members and four other buy-side market participants, addresses key concerns raised by supervisors and legislators globally, to analyze the various U.S. and European CDS clearing solutions with respect to the issues of customer margin segregation and portability of cleared customer CDS positions.
MFA fully endorses the collaborative efforts with industry regulators to support commercially viable centralized clearing platforms and to promote sound business practices.
MFA members include the vast majority of the largest hedge fund groups in the world who manage a substantial portion of the approximately $1.5 trillion invested in absolute return strategies. MFA is headquartered in Washington, with an office in New York. For more information, please visit: www.managedfunds.org
"The efforts of the special working group and the Report are both comprehensive and timely." Richard H. Baker, MFA President and CEO, said, "MFA has been a strong proponent in advocating collateral segregation, portability of trades and direct and indirect buy-side access to centralized clearing. We remain committed to working with industry regulators, industry working groups such as the Operations Management Group, and other trade associations on the next steps toward providing such access."
The report was written by a special working group of eight dealers, four MFA members and four other buy-side market participants, addresses key concerns raised by supervisors and legislators globally, to analyze the various U.S. and European CDS clearing solutions with respect to the issues of customer margin segregation and portability of cleared customer CDS positions.
MFA fully endorses the collaborative efforts with industry regulators to support commercially viable centralized clearing platforms and to promote sound business practices.
MFA members include the vast majority of the largest hedge fund groups in the world who manage a substantial portion of the approximately $1.5 trillion invested in absolute return strategies. MFA is headquartered in Washington, with an office in New York. For more information, please visit: www.managedfunds.org
Former Morgan Stanley Traders Launch Commodity Trading Advisor
Cinneas Foreign Exchange LLC, an alternative investment management firm specializing in momentum based trading in the foreign exchange market, have announced the launch of a Commodity Trading Advisor (CTA).
The Cinneas investment process combines technical, fundamental and intraday market flow analysis with the careful application of leverage for the purpose of delivering non-correlated returns, preserving capital and mitigating risk. Cinneas offers a low barrier to entry with a minimum investment of $5,000 with no lock-up period.
Cinneas was founded by Morgan Stanley veterans Michael Myrtetus and Douglas Borthwick. Myrtetus and Borthwick met in 1996 when Douglas joined Morgan Stanley's foreign exchange trading team. At that time Morgan Stanley's FX business had revenues approximating $200 million. Over the 9 years they worked together, the business grew to approximately $1 billion.
"We believe that an actively managed, globally diverse portfolio can adapt and grow with the changing markets," said Douglas Borthwick, Managing Partner. "Our approach draws upon global economic, fundamental, and technical analysis to identify momentum trading opportunities, with the ultimate goal of producing non-correlated risk-adjusted returns."
The Cinneas investment process combines technical, fundamental and intraday market flow analysis with the careful application of leverage for the purpose of delivering non-correlated returns, preserving capital and mitigating risk. Cinneas offers a low barrier to entry with a minimum investment of $5,000 with no lock-up period.
Cinneas was founded by Morgan Stanley veterans Michael Myrtetus and Douglas Borthwick. Myrtetus and Borthwick met in 1996 when Douglas joined Morgan Stanley's foreign exchange trading team. At that time Morgan Stanley's FX business had revenues approximating $200 million. Over the 9 years they worked together, the business grew to approximately $1 billion.
"We believe that an actively managed, globally diverse portfolio can adapt and grow with the changing markets," said Douglas Borthwick, Managing Partner. "Our approach draws upon global economic, fundamental, and technical analysis to identify momentum trading opportunities, with the ultimate goal of producing non-correlated risk-adjusted returns."
100 Women in Hedge Funds Award Goes To Kathryn Hall
CEO and CIO of Hall Capital Partners, Kathryn Hall, will be awarded the 100 Women in Hedge Funds 2009 Industry Leadership Award at its New York Gala, on November 18, 2009.
Each year, the organization identifies a woman whose professional talent, business ethic, and passion for investing help define and advance the hedge fund industry's standards of excellence. This year’s theme is Education and net proceeds from the NY Gala will be given to Computers for Youth.
Hall Capital Partners LLC was founded by Hill as Laurel Management Company in 1994, it currently manages more than $17 billion in assets. Hall formerly served as a General Partner of HFS Management Partners (predecessor to Farallon Capital Partners) and an early advisor to hedge fund investors.
"Katie stands out for her long history of working closely with investors to navigate the difficult landscape of hedge fund investing. She has bona fides as both an investor and hedge fund manger, and that experience gives her an especially insightful perspective in the current turbulent market," noted Lauren Malafronte, Director, Barclays Capital and Board member of 100 Women in Hedge Funds Foundation. "Katie has a well-established reputation for communication with investors; her leadership in this area makes her a role model for so many women in the industry.
Past awardees include Sonia Gardner, Avenue Capital; Jane Mendillo, Harvard Management Company; and Anne Dinning, D. E. Shaw group.
Each year, the organization identifies a woman whose professional talent, business ethic, and passion for investing help define and advance the hedge fund industry's standards of excellence. This year’s theme is Education and net proceeds from the NY Gala will be given to Computers for Youth.
Hall Capital Partners LLC was founded by Hill as Laurel Management Company in 1994, it currently manages more than $17 billion in assets. Hall formerly served as a General Partner of HFS Management Partners (predecessor to Farallon Capital Partners) and an early advisor to hedge fund investors.
"Katie stands out for her long history of working closely with investors to navigate the difficult landscape of hedge fund investing. She has bona fides as both an investor and hedge fund manger, and that experience gives her an especially insightful perspective in the current turbulent market," noted Lauren Malafronte, Director, Barclays Capital and Board member of 100 Women in Hedge Funds Foundation. "Katie has a well-established reputation for communication with investors; her leadership in this area makes her a role model for so many women in the industry.
Past awardees include Sonia Gardner, Avenue Capital; Jane Mendillo, Harvard Management Company; and Anne Dinning, D. E. Shaw group.
13 Jul 2009
Bandon Capital Management Hires Industry Veteran to Lead Intermediary Market Development
Alternative investment management company, Bandon Capital Management, LLC, has hired J. Michael Miller as Managing Director responsible for the development and management of the financial intermediary market.
Miller has over 25 years of experience in building, leading and managing intermediary distribution organizations and has held senior level positions with multiple national firms including Federated Investors Inc., Weiss, Peck & Greer, LLC, mPower/Morningstar and most recently was Managing Director for Concord Wealth Management.
Bandon is focused on delivering the attractive investment characteristics of alternative investing – absolute returns with low correlations – to a wider audience while minimizing or eliminating many of the structural negatives including high minimums, high fees, long lock ups and lack of liquidity and transparency.
Bill Woodruff, Founder and Managing Principal, said “We are delighted to have someone with Mike’s experience and track record joining the firm. We look forward to further expanding our relationships with the financial intermediary community and providing access to non-correlated, absolute return oriented strategies to a market starving for quality solutions”.
Bandon’s flagship strategy DIRS – Directional Interest Rate Strategy – is quickly approaching its 5 year anniversary with historical average net ROR of +7.23% per year, annualized standard deviation of 6.56%, and very low correlation with the major equity indices, as evidenced by a correlation of -.08 to the S&P
500 and -.05 to the Barclays Aggregate from August of 2004 through June 30th of 2009.
Bandon’s strategies are offered in multiple structures with DIRS, the flagship strategy, currently offered as a separately managed account that can be held at most major custodians. A separately managed account is an increasingly attractive structure in light of the recent hedge fund abuses associated with private pooled vehicles.
Miller has over 25 years of experience in building, leading and managing intermediary distribution organizations and has held senior level positions with multiple national firms including Federated Investors Inc., Weiss, Peck & Greer, LLC, mPower/Morningstar and most recently was Managing Director for Concord Wealth Management.
Bandon is focused on delivering the attractive investment characteristics of alternative investing – absolute returns with low correlations – to a wider audience while minimizing or eliminating many of the structural negatives including high minimums, high fees, long lock ups and lack of liquidity and transparency.
Bill Woodruff, Founder and Managing Principal, said “We are delighted to have someone with Mike’s experience and track record joining the firm. We look forward to further expanding our relationships with the financial intermediary community and providing access to non-correlated, absolute return oriented strategies to a market starving for quality solutions”.
Bandon’s flagship strategy DIRS – Directional Interest Rate Strategy – is quickly approaching its 5 year anniversary with historical average net ROR of +7.23% per year, annualized standard deviation of 6.56%, and very low correlation with the major equity indices, as evidenced by a correlation of -.08 to the S&P
500 and -.05 to the Barclays Aggregate from August of 2004 through June 30th of 2009.
Bandon’s strategies are offered in multiple structures with DIRS, the flagship strategy, currently offered as a separately managed account that can be held at most major custodians. A separately managed account is an increasingly attractive structure in light of the recent hedge fund abuses associated with private pooled vehicles.
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