02/08/2010 Author: Ben Haidari

HFMWeek Daily Snapshot - 2 August

NEWSPAPERS & WIRES
One of Europe's largest institutional investors has pulled out of funds of hedge funds (FoHFs), removing more than $500m (€383m) from the troubled sector, saying it doubts their utility and dislikes their lack of transparency, reports Financial News. The $15.4bn Rabobank Pensioenfonds, one of the 100 largest pension schemes in Europe, decided to pull out of FoHFs and put the money into equities, according to its annual report, published last week. The scheme's reports show its disaffection with FoHFs began in 2008.
 
The FSA's new bonus rules are "fraught" with legal problems which could lead to endless challenges through the courts, PricewaterhouseCoopers (PwC) warns, report IFA Online. A provision set to be brought in next January will allow the FSA to void contract if it discovers an employer has breached its remuneration code. Currently, the code applies to the largest banks, building societies and broker dealers. However, the regulator plans to extend this to asset managers, hedge fund managers, Ucits investment firms as well as some firms engaging in corporate finance, venture capital, the provision of financial advice and stockbrokers.
 
Hedge funds increased their bets that natural gas prices would rise for the first time in six weeks after hotter-than-normal weather stoked air-conditioning demand, according to Bloomberg. Natural gas climbed every day last week, the longest winning streak since November, and advanced 36 cents, or 7.9%, to $4.9 for every million British thermal units on the New York Mercantile Exchange. Hedge funds and other large speculators increased bullish bets by 14% the week ended 27 July, the Commodity Futures Trading Commission reported.
 
An emerging markets hedge fund affiliated to Citigroup has sued Goldman Sachs for its alleged failure to uphold its part of a trade involving Venezuelan oil warrants The Wall Street Journal reports. Emerging Markets Special Opportunities, a hedge fund managed by Citigroup affiliate EMSO Partners, claims that over a three-year period Goldman failed to deliver oil warrants it had paid for. 
 
Some of the world's leading investors are growing more worried about deflation, according to the Wall Street Journal. Bond-fund heavyweight Bill Gross, investment manager Jeremy Grantham and hedge fund managers David Tepper and Alan Fournier are among the best-known investors who are bracing for deflation, a development that could cripple global economies and world stock markets. The investors cite weak economic figures and a mounting consensus that global policymakers are reluctant, or unable, to take further steps to boost growth as reasons for their market positions.
 
PEOPLE MOVES
Credit Suisse Group have appointed Myo Schollum as head of prime services coverage in Japan as part of an effort to expand the business catering to hedge funds, report Bloomberg. Schollum is replacing Yoji Koga, who retired from the financial industry at the end of April. Schollum will report to Kevin Meehan, the head of prime coverage Asia-Pacific in Hong Kong, and Kyoya Okazawa, head of equities in Japan. Prior to taking the position in Tokyo, Schollum was the head of prime services coverage for Credit Suisse in Singapore.