10/03/2010 Author: Tony Griffiths

HFMWeek Daily Snapshot - 10 March

NEWSPAPERS & WIRES
Gartmore Group, the hedge fund and mutual fund manager that listed its shares on the London Stock Exchange in December, reported a drop in operating earnings for 2009 but said its business is firmly on the mend and has taken in £273m ($409m) in net new money so far this year, says the WSJ. Gartmore said it managed £22.2bn at 31 December, up 19% from £18.7bn a year earlier. Nearly all of the 2009 gains came from market and investment performance at its funds, with just £252m added from net fund subscriptions.

Preqin’s latest report, the 2010 Preqin Sovereign Wealth Fund Review, reveals that the aggregate total assets of all sovereign wealth funds (SWFs) has continued to increase over the past year. The recovery in global equities markets helped certain SWFs regain ground lost as a result of the economic downturn. However, some funds have been used by national governments to cover budget deficits and support financial institutions. The aggregate total assets under management of all sovereign wealth funds currently stands at an estimated $3.51trn, representing a 9% increase from one year ago, when the figure stood at $3.22trn. One of the largest increases in total assets came at Norway’s Government Pension Fund – Global, which reported returns in 2009 of over 25% and now has well over $400bn in assets under management.

Hedge funds that trade currencies are taking hits from politicians casting them as speculators out to sink the euro and push Greece into insolvency, Bloomberg reports. They are also losing money. Macro funds, so named because they try to profit from macroeconomic trends, fell 1% in the first two months of the year, according to data compiled by Chicago-based Hedge Fund Research. Brevan Howard Asset Management, Europe’s largest hedge fund firm, Moore Capital Management and Tudor Investment Corp were among those reporting fund losses.

Managed Funds Association (MFA) president and CEO Richard Baker, yesterday announced that MFA has formed an alliance with the Texas Hedge Fund Association (THFA), an education and advocacy organisation that represents the hedge fund and managed futures industry in Texas and the surrounding states. “MFA is continuing to forge links with regional, grassroots industry organisations and is pleased to welcome the Texas Hedge Fund Association as an affiliate,” said Baker.  “Strong, active groups like THFA will play an important role in our increasingly unified efforts to educate policy makers, regulators, and pension recipients about the value of our industry.”
 
The average hedge fund lagged behind the nearly 3% return of the Standard & Poor’s 500 Stock Index return in February, reports the WSJ. The hedge funds that beat the market tended to be multi-strategy, according to both hedge fund databases and fund managers’ letters to investors. Daniel Loeb's Third Point Offshore fund was up 3.2% for February and 6.9% for the year through February, according to HSBC Private Bank.

Two former executives of collapsed hedge fund Norshield Asset Management (Canada) knowingly misled investors, failed to keep proper books and made misleading statements to investigators, an Ontario Securities Commission (OSC) panel has concluded, The Globe and Mail reports. In a ruling released yesterday, the OSC said former CEO John Xanthoudakis and president Dale Smith breached Ontario Securities Act rules while running the $1bn hedge fund.