Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York (HedgeCo.net) – Based on the close of trading on March 29 the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, dropped 1.22% month-to-date, closing at 2313.44.
“Continuing rising oil prices, which currently trade at a 29-month high at $104 per barrel (light crude), could harm production, trade activity and consumption as in mid-2008,” said Dr. Farouk Soussa, Citigroup’s Dubai-based Chief Economist for the Middle East.
“The civil war in Libya, which triggered a military air campaign from NATO-forces against the nation’s leader, Colonel Moammar Gaddafi, has lifted energy prices and global uncertainty.” Gérard Al-Fil, a Middle East correspondent reported. “ Moreover, the earthquake and nuclear disaster in Japan weighed on investors’ sentiment, resulting in the DJIM Japan Index posting the DJIM’s largest decline in March (7.11%); in comparison, the global bellwether index, the Dow Jones Industrial Average, increased by 0.43% during the same period.”
Some preliminary hedge fund highlights include:
- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased 1.32%, closing at 2127.99. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of 6.13%, closing at 139.75.
- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 2237.48, a loss of 2.28%, while the conventional Dow Jones Europe Index loss 1.54%, closing at 284.40.
- Measuring the performance of 50 of the largest Shari’ah compliant U.S. stocks, the Dow Jones Islamic Market U.S. Titans 50 Index decreased, closing at 2364.05. It represents a loss of 0.77%. The U.S. blue- chip Dow Jones Industrial Average increased 0.43%, closing at 12279.01.
On a positive note, the Egyptian Exchange also reopened after a seven week shutdown, allowing hedge funds invested in the area to start trading again.
In the sector indexes, the DJIM Utilities Index rose 2.16% (the month’s top gainer), and the Dow Jones Citigroup Sukuk Index, the DJIM composite for Islamic bonds, gained 0.72%.
New York – Credit Suisse has launched two new Emerging Market (EM) fixed income indices that can help global investors gain enhanced exposure to EM sovereign credit and broad access to local currency debt markets.
The two new indices take distinct, yet complimentary, approaches to investing in Emerging Market sovereign debt. The Credit Suisse Emerging Markets Credit Opportunity (EMCROP) index aims to generate superior risk-adjusted performance by systematically identifying mispricing in EM sovereign credit spreads and tactically adjusting overall market exposure, while the Credit Suisse Emerging Market Local Currency Sovereign Bond Index (CSEMLC) provides broad benchmark exposure to EM sovereign debt.
The Credit Suisse Emerging Markets Credit Opportunity Index (EMCROP) is an investment strategy designed to benefit from mispricing in EM sovereign credit spreads relative to their macroeconomic and credit fundamentals. The strategy sells credit default swap (CDS) protection on up to six EM sovereign credits and rebalances its exposure quarterly. Selection of sovereign credits is based on country-level fundamentals and credit exposure is adjusted according to the Credit Suisse Extreme Flow Indicator, a proprietary medium-term timing indicator. For “risk-on” periods, the strategy invests in the selected CDS contracts, in “risk-off’ periods, the strategy stays neutral.
Mike Hodgson, Head of Fixed Income for the Emerging Markets Group at Credit Suisse, said, “These new indices reinforce our position as a leading franchise in Emerging Markets and exemplify our cutting-edge research in developing transparent, liquid strategies. With EMCROP, we now offer investors convenient alpha exposure to EM sovereign credit, while CSEMLC provides a benchmark for EM local currency bond markets.”
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Fox – Federal investigators have questioned executives at Bank of America’s Merrill Lynch brokerage unit about the firm’s relationship with Galleon founder Raj Rajaratnam, who is accused of committing securities fraud by earning millions of dollars of illegal profits by trading on insider information, the FOX Business Network has learned.
Rajaratnam had a relationship with at least one senior broker at the firm, Sanjay Patel. At one point, Rajaratnam, Patel and their families together went on vacation to Jamaica.
Bloomberg – Tokyo Electric Power Co.’s shareholders may be wiped out by clean-up costs and liabilities stemming from the worst nuclear accident since Chernobyl.
The company faces claims of as much as 11 trillion yen ($133 billion), if the crisis lasts two years, that could lead to nationalization, according to Bank of America Merrill Lynch. Investors, including Mitsushige Akino and Edwin Merner, also said shareholders should brace for further losses.
New York (HedgeCo.net) – The Hedge Fund Association (HFA), announced its expansion into Latin America along with the appointment of five Directors for the new Latin American Chapters.
“The hedge fund industry has become increasingly global in scope. As such, it makes sense for the HFA to expand so that we can advocate on behalf of the international alternatives industry,” said David Friedland, President of the Hedge Fund Association and President of Magnum U.S. Investments.
Victor Hugo Rodriguez, CEO of LatAm Alternatives was appointed by the HFA’s board to serve as the Director of the Latin American Regional Chapter.
“I am honored to take an active role in the HFA’s international growth and its advocacy efforts on behalf of the industry.” Rodriguez said, “I hope that the Latin American HFA can serve as a catalyst for the expansion of our industry in this key economic region.”
Marcia Rothschild, Head of BNP Paribas Securities Services Brazil and Otavio Vieira, Managing Director / Chief Investment Officer of Safdié Gestão de Patrimônio (a wholly subsidiary of Banque Safdié), will serve as Co-directors of the Brazilian Chapter.
Additionally, Juan Luis Rivera, Partner at Moneda Asset Management will be appointed as Director of the Chilean Chapter and Daniel Osorio, CEO of Andean Capital Management will take the reins as Director of the Colombian Chapter.
Over the last several years, the HFA has been aggressively expanding its footprint to include 4 regional U.S. Chapters, Cayman Islands and EU Chapters and an Asian affiliate organization. The HFA has also lobbied on behalf of small and medium sized hedge funds to increase the Dodd-Frank AUM registration threshold from the originally proposed $30 million to the current $150 million.
Already holding more U.S. events than any other hedge fund industry association, The HFA will launch the Latin American Chapter this summer at an event on Brickell Avenue in Miami.
Business Insider – Hedge funds have been piling into the Nikkei since the sharp selloff in the wake of Japan’s disaster, according to data from Societe Generale.
While these funds were not following what was an established trend at the start of 2011, they turned it on right after the earthquake, pumping cash into the market, and buying the Nikkei big.
CNN – An Apple leak, hedge fund FUD or a false rumor out of the wild west of the blogosphere? Several Wall Street analysts finally caught on to the significance of Jim Dalrymple’s report in The Loop Monday that there would be no new hardware unveiled at Apple’s (AAPL) Worldwide Developers Conference in June.
What this may mean — as BMO Capital’s Keith Bachman and Jefferies & Co.’s Peter Misek explained to clients Wednesday — is that for the first time since 2007, summer will come and go without a new iPhone.
BusinessWeek – The fallout from the biggest white-collar federal prosecution in Connecticut is being felt a continent away in Venezuela, where the government had invested hundreds of millions of dollars from a state oil workers’ pension fund with a now disgraced financier.
U.S. prosecutors say Venezuelan-American Francisco Illarramendi (EE’-yah-rah-mehn-dee) used unregistered hedge funds in Stamford, Conn., as cover for a massive Ponzi scheme with exclusively overseas clients.
Bloomberg – Citadel LLC, the $11 billion hedge fund run by Ken Griffin, is shutting one of its residential mortgage funds after Bill King, the portfolio manager, left the Chicago-based firm, according to three people familiar with the situation.
King, who joined Citadel in 2008 from JPMorgan Chase & Co., left on March 7 following the appointment of Glenn Perillo as co-manager of the firm’s mortgage funds, according to the people, who asked not to be identified because the firm is private.
Opalesque Exclusive – A timely reminder that the SEC deadline for hedge fund registration is creeping upon us comes from Jon Wilson, director of project consulting, at compliance consultancy and professional financial services firm, The IMS Group. Based in London and New York, IMS has 600 client relationships, in a compliance business that has been built around the asset management, and particularly the alternatives, industry.
“The background is that for some time now the SEC has had a sceptical view of the hedge fund and private equity industries” says Wilson in an interview with Opalesque. The reforms brought in under Dodd Frank mean that while before a private fund with less than 15 investors did not need to register, now all funds with more than 14 investors and more than $25m under management and a business in the US will have to register with the SEC. The final deadline is 21st July which when backed up to accommodate possible delays and the current 45 day turnaround at the SEC means applications need to be in by the end of May.
MarketWatch – Activist hedge fund firm Barington Capital Group won a seat on the board of industrial company Ameron International Corp. on Wednesday, ending a heated proxy battle that began more than a year ago.
James Mitarotonda, head of Barington, was elected as an Ameron director, according to preliminary results of the shareholder vote announced by the company at its annual meeting in Pasadena, Calif.
Guardian – David Sokol, long considered the most likely candidate to succeed the billionaire investor as the head of Buffett’s Berkshire Hathaway, resigned after purchasing shares in an oil company that he suggested Buffett should buy.
But Buffett moved to scotch rumours that the purchase had anything to do with the resignation. In a statement Buffett said Sokol had told him he owned shares in the chemical company, Lubrizol Corp, when they first discussed the deal in January. Buffett said that neither Sokol nor he felt that “his Lubrizol purchases were in any way unlawful” and that they were not a factor in his decision to resign.
