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 – Hedge fund assets increased by $10.6 billion in July, rising for a third straight month, as managers trading shares benefited from global stock market gains, according to Eurekahedge Pte.
Net inflows into the industry totaled $2.1 billion, while gains through performance were $8.5 billion, bringing total assets under management to $1.35 trillion, the Singapore-based research firm said in a report posted on its Web site.
Hedge fund managers are making a comeback after suffering their worst year on record in 2008, as stock markets recover amid optimism that stimulus measures will help put an end to the worst of the global economic recession. The MSCI World Index jumped 8.4 percent in July, bringing its year-to-date advance to 14 percent.
CNBC – Another of the once giant hedge funds is all but closing its doors. Atticus Capital founder Timothy Barakett, 44 years of age, is shuttering his flagship fund and returning $3 billion in capital to his investors. The roughly $1 billion left, Barakett’s personal fortune, will be managed by him in a so-called “family office”. Atticus will keep its European fund (not managed by Barakett), with roughly $1.5 billion under management, open.
Barakett says the decision was a personal one, driven by his desire to spend more time with his family. I don’t doubt it. But, I can’t help wondering whether Barakett’s exit is also due to the fact that most of the $3 billion he’s returning to investors is below its high water mark.
Reuters – PetroAlgae is one of those many clean-tech companies that seem to burn through cash faster than a Hummer goes through a gallon of gas. Yet something curious is going on with shares of this Melbourne, Florida-based company, which is hoping to make money from turning algae into oil.
Over the past month, the stock price of PetroAlgae has rocketed from $8 to as high as $32.75 on ultra-thin trading of the shares (as of late Monday it had fallen back to around $10).
PetroAlgae boasts a rather healthy $1 billion market value — after being as high as $3.4 billion earlier Monday — even though it has no revenues, a $34 million accumulated deficit and its auditor isn’t sure the company can continue as a going concern.
Reuters – The U.S. government’s $1 billion "cash for clunkers" auto sales incentive program reached its funding limit unexpectedly after an avalanche of business exhausted its funds, an Obama administration official said late Thursday.
Auto dealers began offering government-backed rebates in early July of up to $4,500 to consumers who traded-in their gas-guzzlers for more fuel-efficient vehicles.
But the Transportation Department will need additional cash after rebates for nearly 250,000 vehicles jammed the pipeline nationwide.
Bloomberg – Marcos Duarte, co-founder of the $1 billion hedge fund Polo Capital Gestao de Fundos Ltda., is buying more Brazilian homebuilder shares even after the stocks more than doubled this year.
Duarte said the Rio de Janeiro-based firm is buying real estate developers Klabin Segall SA and EZ Tec Empreendimentos e Participacoes SA, adding to bets on the industry that helped his 659 million-real ($348 million) Polo Norte Multimercado LP fund outperform 96 percent of its peers in 2009.
Reuters – Gottex Fund Management Holdings Ltd said on Wednesday assets under management slipped 4.6 percent to $8.1 billion in the second quarter, denting its shares, but it saw some positive signs for the second half.
The fund of hedge funds provider said the fall in assets under management was mainly due to client redemptions and partly offset by positive performance.
Korea Herald – The CEO of Korea Investment Corp. said yesterday the company would invest $1 billion in inflation-hedging assets such as price-linked bonds, commodities and real estate assets as part of its exit strategy, amid rising concerns over possible "hyper inflation." The nation’s sovereign wealth fund received $3 billion from the Finance Ministry in July, of which it will spend $2 billion in investing in traditional overseas bonds and stocks, and the remaining $1 billion in new alternative investments like inflation-hedging assets.
With the $3 billion included, the KIC now manages a $27.8 billion fund, of which $17 billion came from the Bank of Korea and 10.8 billion from the Finance Ministry.
Reuters UK – Man Group, the world’s biggest listed hedge fund firm, reported a rise in sales to private investors and said it expects to return to overall net client inflows in its second half, boosting its shares.
In a statement on Thursday, the firm said it attracted net private investor inflows in its first quarter of $1.9 billion (1.1 billion pounds) into its funds, which aim to deliver positive investment returns whether markets rise or fall. This partly offset net outflows of $3.3 billion from institutions such as pension funds.
Reuters UK – The government has created a fund to invest in technology-based firms with high growth potential, which it hopes will raise up to 1 billion pounds over the next decade.
The UK Innovation Investment Fund will focus on investing in small businesses and start-ups in digital and life sciences, clean technology and advanced manufacturing, the Department for Business, Innovation and Skills (BIS) said on Monday.
Reuters – Hedge fund firm Polar Capital reported a fall in assets but has seen net inflows in recent months and said on Wednesday it was looking "more aggressively" at buying firms in distress.
Polar said assets under management fell to $1.54 billion at end-May from $3.1 billion at end-March 2008, although there has been a small rise since the end of March this year.
Chief executive Mark Kary told Reuters the firm had seen "small net inflows" since end-March, particularly into its global macro strategy and European long/short equity funds.
Reuters – Hedge fund firm Polar Capital said on Wednesday that its assets under management had fallen to $1.54 billion at end-May compared with $3.1 billion at end-March 2008.
The firm said pretax profit for the year to March 31 fell 17 percent to 12.1 million pounds.
Seeking Alpha – William von Mueffling’s Cantillon Capital Management will be closing down the hedge fund portion of its business. The fund will wind down its positions except for $1 billion worth of long positions as it reverts to a long-only shop. We’ve not covered Cantillon in our portfolio tracking series before, but von Mueffling is quite a prominent name in the industry.
His firm had $10 billion assets at its peak and more recently had around $3.5 billion assets under management. He founded the firm in 2003 after leaving Lazard, where he helped build up the investment house’s hedge fund business. Like many of the long/short equity hedge funds we track, Cantillon is a stock picking firm.
