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.
Bloomberg – Pacific Investment Management Co. named Jennifer Bridwell head of alternatives product development as the firm expands hedge funds and distressed-debt strategies.
Bridwell was previously head of mortgage strategies development at Newport Beach, California-based Pimco, where she has worked since 2005, the firm said today in a statement. Pimco has attracted $16 billion in assets into such strategies over the past decade as it opened funds to invest in troubled mortgages and bonds backed by real-estate loans, the firm said.
NYT – Greece may never be able to pay off its huge debts, but its bonds, long scorned by investors, are suddenly being gobbled up by hedge funds.
After a number of investors struck gold by betting against French banks, many have turned their attention to the hot yet risky euro zone trade of the moment: buying Greek government bonds that traders say are changing hands for as little as 36 cents for each euro of face value.
MarketWatch – The hedge fund industry is braced for a new round of redemptions after two months of poor performance and growing investor desire to move money into cash.
The world’s largest listed hedge-fund manager, Man Group PLC , stoked fears of another industry meltdown Wednesday when it reported a net $2.6 billion was pulled from its funds between June 30 and Sept. 26. It lost a further $1.5 billion from fund losses and $1.9 billion from the effect of a stronger U.S. dollar when accounting for euro- and Australian dollar-denominated funds. Its GLG unit, acquired last year, posted particularly large outflows.
The Globe And Mail – On Wednesday, we looked at the stocks that most often pop up at the top of the biggest holdings of the 50 largest U.S. mutual funds. Today, we turn our attention to the most popular top holdings for U.S. hedge funds.
The idea, and the data analysis, come from Tobias Levkovich, head U.S. equity strategist at Citigroup in New York. Mr. Levkovich believes that the trends in top holdings for mutual and hedge fund managers may provide clues, and even opportunities, for astute investors.
CNBC – “In the spirit of one of the Navy SEAL Foundation mantra, ‘all in…all the time,’ prominent money manager Daniel Loeb, Founder and CEO of Third Point LLC, challenges three Navy SEAL Foundation Directors, all former SEALs, to run the “MightyMan” Half Iron Triathlon with him and his team on October 2, 2011 in Montauk, New York, to raise funds for the Foundation.
Daniel will make a sizeable contribution to the Navy SEAL Foundation for each director who completes the race as well as help raise money around this event. Thank you Daniel for your generosity and the challenge; as they say in the SEAL Teams, “the only easy day was yesterday.”
Business Spectator – Australia’s banking fraternity will be feeling a lot more relaxed today after Canberra backed away from changes that would make it much easier for troubled companies to keep trading.
At present, there’s very little incentive for directors of troubled companies to attempt the hazardous task of trying to turn the company’s fortunes around. Typically directors, panicked by their lawyers’ advice that they could be held personally responsible for debts the company racks up while insolvent, scramble to the telephone and call in administrators as soon as they realise that their company is in serious trouble. At that point, the company’s bankers usually respond by appointing receivers to protect their interests.
Telegraph – “Robust” was the word the 51-year-old marathon enthusiast came up with for the company’s capital and liquidity position – despite the news that investors had withdrawn $2.6bn (£1.6bn) of the group’s funds since June 30.
But the shares looked anything but, diving 59.6 to 180p. And Mr Clarke, who joined the company in 1993, couldn’t offer complete reassurance.
Dow Jones – Hedge fund leverage, as measured by margin debt on the New York Stock Exchange, declined in August by the most in a single month since November 2008, as managers cut their exposure to the markets amidst a backdrop of global market sell-offs and risk aversion, according to Bank of America Merrill Lynch’s weekly hedge fund trade monitor.
New York (HedgeCo.net) – Hedge fund data provider Eurekahedge is launching a suite of new asset weighted indices, under the name ‘Mizuho-Eurekahedge Index’.
“With the current volatility in the markets there is increasing demand for more manageable and predictable return streams. The Japanese pension fund industry is currently reported to have almost $100 billion invested in alternatives and in particular is undertaking a great deal of research into this area.” Alexander Mearns, CEO of Eurekahedge, said. “The absolute return fund industry is now back at $2 trillion and while it is much smaller than the $30 trillion mutual fund/retail fund industry it has far better annualized returns, less volatility and is growing at a faster rate. In tandem with this growth, we are seeing a strong demand from investors for liquid index linked products such as replication indices and ETFs. In addition we expect the Mizuho-Eurekahedge Index to be the leading hedge fund index benchmark for investors worldwide.”
The new suite of indices follow a rigid methodology that will enable investors to easily utilize them for benchmarking their portfolios and building products such as replication indices, passively managed index funds and ETFs. Alongside Eurekahedge’s existing indices this will be one of the largest collections of hedge fund indices in the world. This global index will draw on both the Mizuho and Eurekahedge brands in an effort to further establish the presence of both entities in the market and raise their recognition in new investment sectors.
In March 2011, Mizuho Corporate Bank, Ltd. (“Mizuho”) acquired a 95% stake in Eurekahedge. Along with Eurekahedge in Singapore, Mizuho also covers alternatives through Mizuho Global Alternatives Investments, Ltd. (MGAI) in Tokyo and Mizuho Alternative Investments, LLC (MAI) in New York.
The indices will be available in October 2011 with September performance numbers and data going back to January 2005.
The second annual FINCAD Corporate Finance Survey found that 73% of respondents conducted hedge effectiveness testing, but of these, 36% reported it as their biggest challenge; greater than accurate risk assessment or independent valuations. To assist with this challenge, FINCAD has today announced the launch of Hedge Accounting Insight, a time and cost-effective solution developed with the goal of simplifying hedge accounting.
The financial and reputational costs of restating financials are immense. The Hedge Accounting Insight system was designed to automate the hedge effectiveness testing process, replacing spreadsheets and thereby reducing the operational risks associated with their use.
“There is an obvious lack of hedge effectiveness testing solutions that target medium to large corporations,” said Daniel Scott, VP of Product Management & Marketing, FINCAD. “In our talks with finance professionals, it became clear that most hedge effectiveness solutions available in the market are too expensive and quite complex to use, leaving treasurers, controllers and auditors with the option of either using highly manual internal spreadsheets, or outsourcing their hedge effectiveness testing to specialist consultants. Our new solution changes that.”
Designed by hedge accounting experts, Hedge Accounting Insight provides automated hedge accounting reports that can be accessed from anywhere through a secure website. Embedded documentation with all the necessary support information for hedging provides users with an audit trail that satisfies regulatory requirements, including SOX, FAS 133 and IAS 39 / IFRS 9.
“We couldn’t be happier with Hedge Accounting Insight,” said Brian Graham, Treasury Manager at First Calgary Financial Credit Union. “With its automated reports and built-in documentation, Hedge Accounting Insight has enabled us to gain a deeper insight into our derivatives and act accordingly, positively impacting our bottom line. Hedge Accounting Insight gives us the room to grow.”
About FINCAD
Founded in 1990, FINCAD provides advanced modelling solutions built on award-winning, patent pending technology. With more than 4,000 clients in over 80 countries around the world, FINCAD is the leading provider of financial analytics technology, enabling global market participants to make informed hedging and investment decisions. FINCAD provides software and services supporting the valuation, reporting and risk management of derivatives and fixed income portfolios to banks, corporate treasuries, hedge funds, asset management firms, audit firms, and governments. FINCAD Analytics can be accessed through Excel, MATLAB, as a Software-as-a-Service or embedded into an existing system through software development kits.
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New York (HedgeCo.net) – Hedge fund giant Man Group said its assets fell by $6 billion as shares dropped nearly 22% yesterday after investors pulled $2.6 billion from its funds. Man said it expects headline pre-tax profits to have fallen from $227 million to $185 million in the six months which end this Friday.
“The extreme volatility of markets in recent months has created challenging performance conditions across asset classes.” Peter Clarke, Chief Executive of Man, said. “Hedge fund styles saw mixed performance across the period as concerns around global growth prospects and sovereign debt levels, especially in the Euro zone, precipitated violent swings in equity, currency and bond markets.”
“In terms of financial performance, although assets under management reduced in the second quarter, primarily as a result of market movements in long only and the impact of foreign exchange translation from the weakening Euro, management fees for the half have been broadly stable on a like-for-like basis.” Clarke said.
Man lost $1.5 billion through negative hedge fund performance and $1.9 billion when the euro dropped against the dollar.
CPI Financial – Emirates NBD Asset Management joins forces with Man to give a four year old Islamic hedge fund another go. $20 million fund of funds hoping to reach $100 million in size within a year.
Emirates NBD Asset Management has teamed up with alternative investment management company Man to relaunch the Emirates Islamic Alternative Strategies Fund, which originally came into being in 2007.
