09/07/2010 Author: Shannon Hawthorne

HFMWeek Daily Snapshot - 9 July

NEWSPAPERS AND WIRES
Man Group chief executive officer Peter Clarke has said the hedge-fund giant could be selling products to mainland China investors within a few years if lobbying efforts with authorities pay off, reports the Wall Street Journal. Speaking at the company's annual general meeting, Clarke said Man Group is currently looking to sign on state-run institutions as clients--a process he is directly involved in--but hopes to eventually get authorisation to sell hedge-fund products to private investors, building on its success in other parts of Asia such as Japan, South Korea and Taiwan. He added that he anticipates Man Group would be regulated by China's central bank if it were to receive authorisation, something he said he considers possible in as few as three years.

FourWinds Capital Management, which manages more than $1bn in natural-resource funds, took over the management of Cole Partners Asset Management’s fund of commodity funds for an undisclosed sum, according to Bloomberg. The Tellus Liquid Commodities Fund, a Delaware limited liability company, will be available for US investors and have its name changed to Zephyr Liquid Commodity Fund, Boston-based FourWinds said today in an e-mailed statement. The company already has a fund of commodity hedge funds called the Zephyr Commodity Fund. “FourWinds US does not anticipate making any material changes to the fund structure or strategy in the short term,” the firm said. Tellus invests in funds through managed accounts and third-party platforms.

A US regulator is seeking to extend its reach to cover mutual funds sold to retail investors which operate an arcane hedge fund trading strategy called managed futures, says the FT. The National Futures Association, an industry-funded watchdog for futures investors, wants to re-assert oversight of mutual funds that primarily trade futures contracts, leveraged derivatives whose value is linked to the future value of markets from commodities to interest rates. The association had these powers until 2003. The proposal comes as small investors see a proliferation of mutual funds specialising in futures as a means of diversifying from equities or bonds or betting on a long-term rise in commodity prices. AQR, the quantitative fund manager, and JP Morgan are among the companies whose mutual funds are targeted in the NFA proposal.

Emerging markets equity specialist Charlemagne Capital said on Friday it had posted a sharp fall in assets under management in the first half of the year due to negative markets and outflows, reports Reuters. The boutique said in a statement that assets under management stood at $2.8bn at the end of June, a 16% increase compared with the same period last year but a 9.5% decline since the beginning of the year. The result is in line with a forecast issued by Singer Capital Markets. In March Charlemagne said it had seen a recovery in client money flows at the beginning of the year, but since March emerging markets indices fell by around 8%. The group said it had experienced "modest net outflows" in the first half but added that their OCCO hedge fund range was "attracting strong and continuing inflows", while the group had recommenced fund raising for property specialist investments.

First-half performance figures are showing the same pattern for hedge funds as for more mainstream investors -- the most successful were in fixed income, while the least successful were in stocks, say Reuters.The HFRI Fund Weighted Composite Index, a broad measure of hedge fund performance, shows a six-month loss of 0.18% at the end of June, following a 0.81% fall in June itself. Within various strategies, however, there was a wide range of performances. Hedge funds focused on corporate debt, for example, gained 4.76% for the half year, while the biggest loser was in energy and basic materials, down 4.81%.

PEOPLE MOVES
Former prime broker Melvyn Ford has moved to HSBC in Hong Kong to take up the newly created role of managing director in the financial institutions group in global banking, reports Asian Investor. He will run hedge-fund coverage in the Asia-Pacific region, reporting to Andrew Roberts, global head of hedge-fund coverage in London. Ford will build on senior relationships with hedge funds, frequently ones HSBC already has by virtue of, for example, its custody and private-banking operations. He will try to steer hedge-fund business towards the bank, and his primary relationships will be at chief investment officer or partner level, rather than at, say, trader level. As well as looking for potential trade ideas, Ford will be instrumental in organising meetings between HSBC top brass and regional hedge funds, when the former are in town.

The board of directors of Newedge has announced a number of new appointments. Duncan Goldie-Morrison has been named as a full time, independent chairman of the board, while Jacques Ripoll, head of Global Investment Management and Services (GIMS) at Société Générale Group and Jérôme Grivet, deputy chief executive officer of Crédit Agricole CIB have been appointed as as vice chairmen of the board. Nicolas Breteau has also been hired as chief executive officer of Newedge, effective July 7, succeeding Patrice Blanc, who has decided to leave the firm for personal reasons. The new governance structure will further support the needs of both the company and the shareholders, and help to strengthen a business model and strategy that proved correct,” said Goldie-Morrison.