08/02/2010 Author: Tony Griffiths

HFMWeek Daily Snapshot - 8 February

NEWSPAPERS & WIRES
Global hedge funds started 2010 with small losses after markets fell on fears that the global economic recovery was stuttering, data released on Friday show. According to the data from industry tracking group HFR, the average fund dipped 0.71% in January with deeper losses at so-called global macro hedge funds pulling the overall index down, Reuters reports. Other research firms are expected to release their numbers this week.
 
Brevan Howard, Europe’s largest hedge fund, plans to open an office in Geneva amid growing uncertainty over taxation and market regulation in the UK. In a letter to clients obtained by the FT, Gunther Thumann, CEO of the UK-based hedge fund’s offshore holding company, said the fund would shortly open its Geneva office. The fund manager, which oversees just over $27bn, first told clients it was considering the move late last year.
 
Citigroup has held talks with private equity groups and hedge funds over the sale of $3bn in car loans in a move to clear troubled assets from its balance sheet, according to the FT. Citigroup is believed to have offered to provide the buyers of the loans with financing for a few years after the sale. Some private equity groups and hedge funds said the assets were less attractive due to the lack of a thriving market for securitised bonds, which are backed by cash flow from loans, says Reuters, citing the newspaper.
 
Despite the G20’s call for high-quality global accounting standards, there is little evidence that International Financial Reporting Standards (IFRS) are being embraced by the European investment fund industry and its supervisors, finds a new Ernst & Young survey. The poll of leading fund managers, administrators and supervisors in 44 European countries found that just a fifth of the funds and administrators who currently have the option to apply IFRS do so. A further 22% of managers and administrators choose to use a combination of IFRS and other accounting standards.
 
One of the US’s largest and best-known investors wants more control over the hedge funds it uses, the WSJ reports. The California Public Employees & Retirement System, better known as Calpers, the $200bn retirement plan for the state’s public sector employees, is squeezing the 27 money managers that oversee its most exotic strategies. Its demand: Calpers no longer wants to pool money with other investors in the conventional fund scheme.

Commodities tumbled on Friday, with a key index down 8.8% in 2010 after its fourth straight weekly decline, as markets reeled amid a rising dollar, economic jitters and talk of hedge fund troubles. Raw sugar fell more than 12% on the week, copper 6%, crude oil 4% and gold 3%. Prices fell, says Reuters, on the dollar's strength and persistent rumours about an unidentified hedge fund that was in trouble and dumping energy positions. Oil-focused hedge fund BlueGold denied that it was behind oil price volatility in recent days and said that market rumours about its operations were false.
 
Shawn Carter, the rap music artist and Rocawear clothing business founder better known as Jay-Z, sued the investment firm Highland Capital Management in a dispute over loan guarantees, Bloomberg reports. Carter, in his complaint filed Thursday in federal court in New York, claims Highland and co-defendant NexBank SSB are attempting to “bleed” from him funds in excess of those he and two other men pledged to pay when they guaranteed the non- principal obligations of a company planning to build a hotel in Manhattan’s west side neighborhood of Chelsea.