20/01/2012 Author: Will Wainewright

HFMWeek Daily Snapshot - 20 January

NEWSPAPERS AND WIRES
Hedge fund investors, rattled by lacklustre performance, yanked more money from the industry than they added during the final months of 2011, data released on Thursday showed, writes the Wall Street Journal. The $2trn hedge fund industry saw net investor withdrawals of about $127m in the fourth quarter, according to data by Hedge Fund Research. It was the first time investors had collectively pulled out more money than they put in since the second quarter of 2009, when the markets were still digging out of the worst of the financial crisis.

The government has moved yet again in its effort to crack down on insider trading, filing charges against seven defendants with ties to hedge funds who federal prosecutors say operated as a “circle of friends” by trading information, reports the Dealbook blog. A criminal complaint filed in Federal District Court in Manhattan names four defendants, including Anthony R. Chiasson, co-founder of the Level Global Investors hedge fund, who is accused of orchestrating large trades in Dell that netted approximately $57m in profits.

Funds under management have dropped – again – job cuts are on the cards and further market turmoil promises thin profits, but shares in Man Group, the London-based hedge fund manager, have risen more than 10% this week, writes the FT. It is testament to the battering Man’s stock has taken over the past 18 months that an absence of worse than expected news in the company’s Wednesday trading statement, rather than anything positive, should have led to such a bounce. Man’s share price is still 80% lower than its July 2007 peak.

Hedge funds with large amounts of Greek debt are reportedly planning to take the government to the European Court of Human Rights in an attempt to prevent Athens from forcing huge losses upon them, according to the Independent. The funds have baulked at the idea of negotiating a settlement with the indebted country. Now, in a move likely to anger millions of Greeks facing austerity measures, fund managers are considering a fight against what they believe would be a violation of human rights law, arguing that their rights to property would be infringed by a write-down of Greek debt.

While many top hedge funds have eased the lockup and redemption terms that made many infamous during the financial crisis three years ago, at least one is sticking tightly to the onerous rules it put into place when it launched more than seven years ago, reports FINAlternatives. Eton Park Capital Management continues to give investors a chance to redeem only once every 27 months – if an investor misses a window, he or she must wait another 27 months. In order to do so, they must give 65 days notice, and can only pull one-third of their money any year.