Editor's view: 29 July 2010
Like Paris in the spring, the lure of the Ucits space is proving a heady experience for many managers. First Europe fell for the charms of these onshore products, now the Americans are joining in a communal swoon.
11/02/2010
HFMWeek Daily Snapshot - 11 February
NEWSPAPERS & WIRES
Och-Ziff Capital Management’s fourth-quarter losses narrowed as hedge fund companies' core business improved sharply, reports the WSJ. One of only a small number of publicly traded hedge fund firms, Och-Ziff benefited from a big jump in incentive income, which surged to $345.6m from $6.7m a year earlier, thanks to funds' positive performance. Lower non-compensations expenses also helped.
Och-Ziff Capital Management’s fourth-quarter losses narrowed as hedge fund companies' core business improved sharply, reports the WSJ. One of only a small number of publicly traded hedge fund firms, Och-Ziff benefited from a big jump in incentive income, which surged to $345.6m from $6.7m a year earlier, thanks to funds' positive performance. Lower non-compensations expenses also helped.
In January, the average hedge fund was down. Some veteran managers bucked the trend, turning in gains, says the WSJ. Funds run by some managers such as Daniel Loeb's
Third Point and Dan Gold's QVT Financial were up substantially during the month. Third Point's flagship fund was up 3.6%, while QVT was up 3.5%,
according to HSBC Private Bank. An investment in the Standard & Poor's 500-Stock Index, on the other hand, would have declined 3.7%.
China’s massive sovereign wealth fund plans to began managing more of its own money this year, just months after announcing a plan to pour billions into hedge funds, reports FIN
Alternatives. China Investment Corp. (CIC) chairman Lou Jiwei said the $300bn fund would increase the amount of overseas investments it manages in house. CIC
is planning a steady increase in overseas investments this year.
The European Life Settlement Association today hits out at a surprise call from the American Council of Life Insurers for policymakers to ban the securitisation of
life settlements – simultaneously announcing a trade mission to help educate the market about the benefits of the asset class. Life settlement-backed investments – which
turn US life insurance policies into tradable assets – have expanded rapidly as a result of the financial crisis, as investors, including hedge funds, have sought predictable returns that are
not linked to the broader market cycle.
Affiliated Managers Group (AMG) said on Wednesday it plans to buy British private equity group Pantheon Ventures, in the US money manager holding
company's fifth acquisition in seven months, reports Reuters. AMG, which has been pushing hard into alternative assets like hedge funds and into foreign markets in the last years, also
said it has millions on hand to keep making acquisitions. AMG would pay $775m to Russell Investments, a unit of Northwestern Mutual Life Insurance Co, to acquire
Pantheon.
A US bankruptcy judge said yesterday the Terminator movie franchise could be sold to California-based, hedge fund Pacificor, ending months of speculation about the
future of the iconic film series after its current owner collapsed into bankruptcy in August. US Bankruptcy Judge Ernest Robles approved the sale during a hearing in his Los
Angeles courtroom, overruling an objection from movie studios Columbia Pictures and Lions Gate Entertainment Corp who had claimed the auction process was unfair
after their joint bid for the franchise was not selected.
New York hedge fund manager Edward T Stein was sentenced to nine years in prison for running a $46m Ponzi scheme that preyed upon friends and acquaintances, Reuters
reports. Stein pleaded guilty in June to four counts of securities fraud and one charge of wire fraud. He faced as long as 19 years and seven months in prison, according to a pre-sentencing report
filed with the court.
LAUNCHES
Hedge fund manager Orchard Capital Partners, which spun-off Stark Investments in 2009, said it has launched a new long/short fund on Thursday which it aims to
grow to $500m in two-to-three years. The fund, Orchard Gemini, which began trading in January, is expected to open up to outside investors in April 2010. Orchard, which has around $400m in AuM,
was formed in October 2009 after Teall Edds and Stuart Wilson, who were running Stark's Asia investments, quit the Milwaukee-based hedge fund, taking the firm's
Hong Kong and Singapore operations with them.
Davide Erro, ex-chief investment officer of Gandhara Capital and a former Goldman Sachs Group trader, plans to start a new hedge fund in early
April, says Bloomberg, citing four people with knowledge of the matter. Hong Kong-based Turiya Advisors Asia will start investments with at least $100m from employees,
friends and family, said the people, who declined to be identified because the information is private. The fund will trade stocks with investments about equally split between Japan, the rest of
Asia and Europe, and will target annual returns of 15% to 20% after fees, they added.
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Comment: Amy B Hirsch
"It is imperative that investors of all types ensure they understand the relationship between the introducing party and the manager"
Investors sit tight on impaired assets
Playing the ‘what if’ game can be fun but, depending on the number of variables in question, it can get a little out of control. Apply this conceit to the hedge fund sector's performance during the financial crisis and the possible permutations become legion.
Hedge fund inflows in Q2
Hedge inflows have slowed as volatile markets made sitting on the sidelines the safest option in Q2. According to figures from HFR, the quarter’s $9.5bn - a 30% drop from Q1’s $14bn – reflected the 'wait and see' policy of many investors as the HFRI Fund Weighted Composite dropped -2.5%. With nerves setting in, recent predictions of a boom of interest in the alpha potential of smaller managers also fell flat, with the lion’s share of money going to large $5bn-plus managers.
Read MoreFunds of hedge funds fall out of favour
A growing number of institutional investors are now opting to invest directly into hedge funds instead of allocating to the space via funds of hedge funds.
Read More
22/09/2010
UK: Ucits IV
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30/09/2010
US: topic to be confirmed
The next HFMWeek Subscriber Club breakfast will take place on Thursday 30 September. Topic and…
19/07/10
HFM Week US Performance Awards
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