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.
26/02/2010
HFMWeek Daily Snapshot - 26 February
NEWSPAPERS & WIRES
Just one in 10 hedge fund managers expects to see the fees they charge investors fall in spite of recent underperformance that has seen income reduced, according to a Credit Suisse survey, says the FT. The industry suffered its heaviest outflows ever in 2008-09 but hedge funds still balk at the idea of cutting the standard "two and 20" fee structure, 2% of assets and 20% of returns, that they charge clients, the poll found. But the survey, which took in responses from nearly a third of the $1.7trn global hedge fund industry, found that managers are open to negotiation.
Just one in 10 hedge fund managers expects to see the fees they charge investors fall in spite of recent underperformance that has seen income reduced, according to a Credit Suisse survey, says the FT. The industry suffered its heaviest outflows ever in 2008-09 but hedge funds still balk at the idea of cutting the standard "two and 20" fee structure, 2% of assets and 20% of returns, that they charge clients, the poll found. But the survey, which took in responses from nearly a third of the $1.7trn global hedge fund industry, found that managers are open to negotiation.
The FSA’s Hedge Fund Survey and Hedge Fund as a Counterparty Survey demonstrates that hedge funds do not pose a potentially destabilising credit counterparty risk across the surveyed banks
and that there is a relatively low level of ‘leverage’ under the FSA’s various measures across the 50 hedge funds surveyed. This demonstrates that hedge funds are generally not
exposed to any more risk than a fund managed by the traditional sector. Kinetic Partners believes that it is totally inappropriate for members of the EU to single
out hedge funds as being responsible for the recent financial crisis.
Some heavyweight hedge funds have launched large bearish bets against the euro in moves that are reminiscent of the trading action at the height of the US financial crisis, reports the
WSJ. The big bets are emerging amid gatherings such as an exclusive 'idea dinner' earlier this month that included hedge fund titans SAC Capital Advisors and Soros
Fund Management. During the dinner, hosted by a boutique investment bank at a private townhouse in Manhattan, a small group of all-star hedge fund managers argued that the euro is likely
to fall to "parity" – or equal on an exchange basis – with the dollar, people close to the situation say.
The US central bank is looking into Goldman Sachs’s role in arranging contentious derivatives trades for Greece, which helped the country to massage
its public finances, Ben Bernanke, chairman of the Federal Reserve, revealed Friday, the FT reports. “We are looking into a number of questions relating to Goldman
Sachs and other companies and their derivatives arrangements with Greece,” Bernanke said, apparently referring to Greek currency transactions structured by Goldman. Testifying before
Congress, Bernanke also responded to concerns that instability in markets for Greek debt and other securities has been heightened by trading in other derivatives, known as CDS, which
compensate investors in case of default.
Fortress Investment Group, one of the world’s largest publicly traded alternative asset managers, said its assets under management shrank by almost 1% during the
fourth quarter as client redemptions totalled more than $1bn, reports the New York Times. Fortress managed $31.8bn in hedge funds and private equity investments at the end of 2009, down
from $32bn at the end of the third quarter. The total was up 8% from the end of 2008.
Federal authorities investigating a Long Island, NY, hedge fund firm are questioning individuals close to the firm about whether it paid kickbacks to outsiders as part of a scheme to inflate the
value of its holdings, say people familiar with the matter, says the WSJ. NIR Group reported eight years of positive returns in its biggest fund with no negative months
starting in 2001, according to figures in fund documents. NIR last year reported to investors it managed more than $780m in hedge fund assets.
Hedge fund managers are “keen for clarity” on what Singapore’s regulator will do to increase oversight of the industry, said Han Ming Ho, who heads the funds
practice group in the city state at Clifford Chance, Bloomberg reports. The Monetary Authority of Singapore
has yet to indicate what the new rules for hedge funds will be since consulting the industry in September last year. Clifford Chance was one of the first international law firms awarded a Singapore
license.
The long-time director of operations for convicted Ponzi scheme operator Bernard Madoff's defunct firm was arrested and criminally charged on Thursday with allegedly directing that
false accounting entries be made in the firm's books to conceal Madoff's fraud, The WSJ reports.
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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
This month’s HFMWeek Subscriber Club breakfast will take place on Wednesday 22 September. Join us and…
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
Following the success of the last year’s HFM US Hedge Fund Performance Awards we...
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