14/06/2010
HSBC Private Bank has maintained an overweight position in hedge funds in 2010, following its decision to reduce its exposure to risk in global equities in April.
The bank, which is in the top three global hedge fund providers, believes that hedge funds are well-positioned to benefit from the current market volatility and is optimistic about the outlook for the industry over the coming 12 months.
“In contrast to the majority of 2009 in which investors were rewarded for taking on risk, we believe 2010 will be a rather different environment – a year of
14/06/2010
NEWSPAPERS AND WIRES
Hedge funds cut their bets on higher oil-futures prices to a 10-month low as US economic reports signalled fuel demand is diminishing, reports Bloomberg. Speculative net-long positions, or wagers that prices will increase, in crude futures declined 30% to 17,457 contracts on the New York Mercantile Exchange in the week ended June 8, the lowest level since July, according to the Commodity Futures Trading Commission’s Commitments of Traders Report released on June 11. Bets on gains have dropped 87% since reaching a record 135,669 in January. “Unwinding long positions makes a lot of sense given the uncertainty
08/06/2010
The dismal May performance of the hedge fund sector has been further compounded by the release of the Lyxor Hedge Fund Index, which recorded net industry losses of 2.22% in May.
According to the index, Long/Short Equity Short Bias was the by far month’s best performing strategy, gaining 5.95%. CTAs Short Term and Long/Short Equity Statistical Arbitrage also performed well in May, gaining 1.81% and 0.2% respectively.
Last month also saw the HFRI Fund Weighted Composite Index fall by 2.26%, its worst monthly performance since November 2008.
However, despite these losses, the Index showed
11/06/2010
NEWSPAPERS AND WIRES
Many hedge funds are adopting a new way to avoid a repeat of the massive redemptions that crushed managers during the 2008 financial crisis, according to MarketWatch. So-called investor-level gates are becoming increasingly common through the industry, replacing more traditional fund-level gates, say investors. King Street Capital Management, one of the largest credit hedge fund firms with more than $19bn in assets, introduced an investor-level gate recently, while Philip Falcone's Blue Line distressed debt hedge fund, launched last year, also has an investor-level gate. The new approach limits investors to withdrawing a portion of their money
10/06/2010
Closed-ended investment company NB Distress Debt Investment Fund will begin trading on the Specialist Fund Market (SFM) of the London Stock Exchange today, becoming only the third admission to the SFM this year.
The fund, which has raised $197.2m, intends to invest the IPO proceeds into around 40 to 50 holdings across a diversified range of investments, namely distressed, stressed and special situations. It will focus particularly on senior debt backed by hard assets to attempt to limit downside risk.
At least a third of the proceeds are expected to be invested within the first
10/06/2010
NEWSPAPERS AND WIRES
A panel headed by Governor Charlie Crist approved a revised investment policy Tuesday for Florida's state retirement fund to reduce its reliance on stocks and other equities while adding hedge funds, says Bloomberg. The State Board of Administration adopted the changes recommended by a consulting firm, the board's advisory council and its executive director, Ash Williams, a former Wall Street hedge fund manager. The changes are expected to reduce the $109.5bn pension fund's risk while increasing its return by $2.1bn over a span of 15 or more years. While the board currently has no hedge fund
09/06/2010
Boyer Allan, the Asian equities specialist, is branching out with an array of new funds, including a Europe, Middle East and Africa (EMEA) vehicle and a Ucits version of its $330m flagship product, HFMWeek can exclusively reveal.
The $750m firm, which has maintained a strong focus on China and Asia since launching in 1998, recently acquired the EMEA team from London boutique Zebedee Capital Partners, which, at the tail-end of 2009, decided to concentrate resources on its main European offering.
The $32m Zebedee Emerging Market (EMEA) Fund officially changed hands at the beginning of May
09/06/2010
International law firm Dechert has announced plans to open a new office in Dublin as it seeks to take advantage of Ireland’s growing prominence as a centre for investment funds.
The new office will focus on advising investment funds, their investment managers and other fund service providers and makes Dechert one of only a small number of international law firms with an Irish presence.
“With our new Dublin office alongside our existing presence in London and Luxembourg, we are now uniquely established in the three leading jurisdictions for international investment funds in the European Union,”
09/06/2010
The fund of hedge funds (FoHF) sector has suffered a 2% decline in total assets under administration (AuA) over the past six months, as investors increasingly opt to invest directly into the hedge fund sector, the second part of the HFMWeek AuA Survey has revealed.
Total FoHF AuA fell from $1.065trn to $1.038trn between 1 Nov 2009 and 31 Apr 2010, in contrast with single manager assets, which rose markedly during the same period, from $2.4trn to $2.7trn, an increase of 9%.
The survey illustrates that, despite a renewed focus on risk management, FoHFs are
09/06/2010
Hedge funds seeking cover against the potential fallout from Fin 48, the recently-introduced US Gaap tax provision, are receiving a lukewarm response from the insurance market, with underwriters reluctant to back multiple policies.
Fin 48 requires affected funds to register all taxes as yet unclaimed by the countries in which they trade. The likelihood of each tax having to be paid is then reflected in a fund’s Net Asset Value (Nav), potentially reducing its value, and sending funds scrambling for coverage. A number of jurisdictions have problematic tax structures, with funds trading in Spain and Australia facing
