10/08/2010 Author: Edward Dean

HFMWeek Daily Snapshot - 10 August

NEWSPAPERS AND WIRES
Investors withdrew $3.7bn from hedge funds in June, after investing approximately $4bn in May, reports Reuters. Emerging market hedge funds fared the worst, with clients withdrawing $2.1bn from these portfolios, according to data compiled by BarclayHedge and TrimTabs. Conversely, managers specialising in fixed income funds attracted $1.4bn in new money, as investors sought the safety of bonds. Growing concern about the US economic recovery and Europe’s sovereign debt crisis saw hedge funds lose 3.2% in May and June, marking the first two-month losing streak since January and February 2009, the research firms said. Investors tend to respond swiftly to poor returns but since many hedge fund investments are of an illiquid nature, more withdrawals could follow in coming months.

 US hedge fund Harris Associates has increased its stake in JJB Sports to 17.9%, making it the largest shareholder in the struggling British sportswear retailer, reports London South East. According to a stock exchange filing submitted on Tuesday, Harris Associates upped its stake to 116 million shares from 104 million. Last week it raised its stake from 93 million. The move makes the group the largest shareholder, ahead of activist shareholder Crystal Amber, which holds a 15.4% stake in the retailer. Shares in JJB Sports were up 3.8% at 0922 GMT.

Hedge fund investor William Ackman has bought a slice of debt on Stuyvesant Town Peter/Cooper Village and could become the next owner of the sprawling Manhattan apartment complexes, according to a report from Bloomberg. Ackman's Pershing Square Capital Management and Winthrop Realty Trust said on Monday they have formed a joint venture and bought the $300m first mezzanine loan. “We paid a low enough price that in a co-op conversion plan we can sell units at very attractive prices to tenants yet still leave sufficient funds to pay back the mortgage over time, and also generate a profit for Pershing and Winthrop,” Ackman said. Pershing Square, based in New York, owns 77.5% of the joint venture.

Pension schemes are increasingly demanding that funds of hedge funds be located onshore as they are unable to invest in traditional unregulated products, reports Global Pensions. Reacting to such institutional pressure, multi-managers have followed single fund providers including Marshall Wace, Gartmore, RWC Partners and Majedie Asset Management, which have all either abandoned offshore entirely or committed to onshore and Ucits-compliant variants of each offshore product. Fund of hedge funds provider Permal, one of Europe's largest with $20bn under management, is among the latest to take pension cash into onshore vehicles. Most of the $80m the firm has raised for its Luxembourg-domiciled, China-focused product since launching it in April has come from international public sector pension funds.

Schroders has expanded its GAIA Newcits range with the launch of two new Ucits-compliant funds, according to  Citywire. The GAIA Opus Multi Strategy fund, a fund of hedge funds, was soft-launched at the end of June but the group made no public announcement and the fund has yet to be widely promoted. Managed by NewFinanceCapital CIO Marc Hotimsky, the Luxembourg-domiciled fund has an absolute return objective utilising a top-down asset allocation approach investing in Ucits III-compliant funds, and will also offer weekly liquidity. “There are strategies that don’t fit the Ucits model but the beauty of a Ucits fund is that we can be very dynamic in our top-down allocation,” said Hotimsky. “What we lose in freedom we gain by shifting the weighting dynamically.”

LAUNCHES
French asset manager Carrousel Capital is marking its tenth anniversary with the launch of a quantitative hedge fund, reports FINalternatives. The firm, which specialises in closed-end fund arbitrage, has been building the new strategy for three years. The systematic fund will rotate its investment strategies, investing in liquid vehicles in a variety of asset classes, among them stocks, bonds, indices, commodities and currencies. “Back in 2007 when we began the development of this new strategy we knew that investors were looking for ever greater liquidity, transparency, and diversity and so designed Centrix IX to deliver on all those requirements” said CEO Bruno Sangle-Ferriere.

PEOPLE MOVES
Rupert Dyson, the lead European fund manager at Sloane Robinson, has tendered his resignation to the firm after deciding to take a break from the investment industry, reports Financial News. Dyson was a partner at the firm, which he joined in 2004. The firm, which prides itself on a relatively low staff turnover, announced the appointment of Michael Hufton as lead fund manager on the European team. Early last year, Mark Haworth, one of four directors at the firm, quit after 13 years of service because he and his family wanted to emigrate. He became the first director to leave in more than eight years.