23/01/2012 Author: Will Wainewright

HFMWeek Daily Snapshot - 23 January

NEWSPAPERS AND WIRES
Redemption requests by hedge fund clients have fallen to the lowest monthly level on record as improving market sentiment combined with a typical seasonal lull in asset re-allocation, data shows, writes Reuters. The GlobeOp Forward Redemption Indicator, a monthly snapshot of clients giving notice to withdraw their cash as a percentage of GlobeOp's assets under administration, measured 1.85% in the January report, down from 4.58% in the December report, which shows requests to redeem funds in January, which is typically a period of heavy re-allocation.

More than two-thirds of hedge funds are below their high-water marks, the point at which they are able to charge investors performance fees, according to Credit Suisse, reports the FT. The main source of income for hedge fund managers is their share of investment profits, typically 20%; but if a fund drops in value, the manager must recoup past profits before charging any more performance fees.

Edward Lampert and shareholders of Sears Holdings Corp. aren't the only ones hoping for a turnaround of the big retailer – Goldman Sachs Group and some of its clients are also sweating it out, writes the Wall Street Journal. Clients of Goldman invested about $3.5bn in Lampert's hedge fund through a special deal more than four years ago. Goldman invested about $75m of its own money as part of the arrangement. At the beginning of this year, that investment was down several hundred million dollars, in large part due to a 57% plunge in Sears stock in 2011.

BNP Paribas Securities Services is embarking on a “major investment programme” aimed at expanding its hedge fund and fund of hedge funds administration service, reports HFMWeek. The custody bank, whose admin division services single-manager hedge fund assets worth $40bn, placing it 19th in HFMWeek’s most recent survey, made the announcement in a statement today. 

Institutional investors' appetite for hedge funds has grown in recent years, but they have taken more time to allocate to the asset class as their expectations of asset managers increases, says Investment and Pensions Europe. According to a report by SEI, in collaboration with Greenwich Associates, institutional investors have become more willing to invest in hedge funds, with more than one-third of them – out of the 105 institutions surveyed – planning to increase target allocations over the next 12 months.

LAUNCHES
Fund of hedge funds firm Hermes BPK Partners has unveiled a managed futures strategy, writes Citywire. Hermes BPK, which was formed in 2008 between the BT pension scheme manager Hermes Fund Managers and a group of hedge fund professionals, will look to protect clients’ cash through concentrating investments in the medium term commodity trading advisors (CTA) market. The fund, called Alpha Vault Managed Futures, will start life with $275m worth of seed money.