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.
West Palm Beach (HedgeCo.net) – Renaissance Institutional Futures, a $3 billion futures fund run by hedge fund management company, Renaissance Technologies, has waived all it’s management fees for 2009, even if the fund delivers good results in 2009, according to the Wall Street Journal.
Renaissance told investors in a end-of-year letter that the futures fund was waiving it’s 1% fixed management fee following poor performance in 2008. The discount is estimated by the Journal to save investors $30 million.
Renaissance Technologies was started in 1982 by James Simons, Renaissance currently has approximately $20 billion in assets under management. The company operates in East Setauket, Long Island, New York, near Stony Brook University. Administrative functions are handled out of offices in Manhattan.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
West Palm Beach (HedgeCo.net) – According to data released by Hedge Fund Research (HFR), the global financial and economic crises accelerated in October, contributing to continued losses in the hedge fund industry, with the HFRI Fund Weighted Composite Index falling nearly 6% for the month.
“Performance of the hedge fund industry has declined over 17% since October 2007, making the current performance drawdown the largest in history,” said Kenneth J. Heinz, President of Hedge Fund Research. “The industry has now registered five consecutive months of losses, another inauspicious first. Consolidation is likely to continue into 2009 as investors across all asset classes indiscriminately liquidate assets to move portfolios into cash holdings.”
Investors withdrew over $40 billion from hedge funds in the month of October which, in addition to $115 billion in performance-based asset losses, reduced the industry capital base by $155 billion. Assets under management in the global hedge fund industry declined to $1.56 trillion at the end of October, a level last seen at the end of Q4 2006.
As of the end of Q3 2008, HFR estimates the entire hedge fund industry to contain more than 10,000 funds, which includes more than 7,400 single-manager funds. October losses follow a challenging third quarter during which global hedge fund capital fell by $210 billion.
The largest capital reductions during the month came from Funds of Hedge Funds, from which investors withdrew over $22 billion. Funds of Hedge Funds have underperformed the overall industry so far this year, with the HFRI Fund of Funds Index posting an 18.50% decline, compared to a loss of 16% for the HFRI Fund Weighted Composite Index.
Performance losses were most significant in funds focused on Emerging Markets, Relative Value Arbitrage and Energy/Basic Materials equities.
Short Selling has posted a strong gain of over 22% for the year. Macro Systematic strategies, which employ quantitative trend-following programs, gained over 6.5% in October and nearly 15% year to date.
Fifty-two percent of October capital outflows were from firms with greater than $5 billion under management; these largest funds represent only 5.5% of the number of funds in the industry but control over 58% of all hedge fund capital.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Zawya – The Lionhart Group, an alternative investment management group that specialises in global multistrategy arbitrage, aims to attract $2 billion (Dh7.4bn) of investment from the Gulf in the next few years through its new branch at the Dubai International Financial Centre.
The regional office has two main roles. The first is to pull in cash from the Middle East and North Africa (Mena) for its investment and hedge funds, and the second is to expand the group’s investments in regional markets.
"We have had relations with GCC investors for a long time," Jim Quinn, Chief Operating Officer of Lionhart Middle East, told Emirates Business. "Around 10 per cent of our assets under management are from the region and these relations started 10 years ago.
"We are planning to build on these relations to attract around $2bn of GCC investments into our funds during the next two to three years. "We are opportunistic and the Mena region is witnessing major economic developments. We have two flagship investment funds with total assets under management of $500m.
West Palm Beach (HedgeCo.net)- In a summary of hedge fund performance for the second quarter of 2008, Morningstar, Inc. marked June as a bad end to a good quarter. The Morningstar 1000 Hedge Fund Index fell 0.73% during the month, pushing down second-quarter returns to 2.07%. Year to date, the index is up only 0.31%, as hedge funds struggled through poor market conditions.
Overall, hedge funds, including funds of hedge funds, buffered the traditional stock and bond markets over the second quarter. Equity and bond markets saw losses all over the world, while the Morningstar Fund of Hedge Funds Index gained 1.43%. Over the last year, the Morningstar 1000 Hedge Fund Index and the Morningstar Fund of Hedge Funds Index outperformed the major global stock indexes, which experienced double-digit declines (with the exception of emerging markets). Both hedge funds and funds of hedge funds underperformed bond markets, however, over this same period.
“Equity markets suffered steep declines in June,” said Morningstar hedge fund analyst Nadia Van Dalen. “Volatility returned to levels not seen since March, amid fears of recession and rising inflation. Most hedge funds are not immune to these economic shocks, despite what their name might imply.”
There were significant exceptions. Over the last 12 months, the Morningstar Global Trend Hedge Fund Index, which tracks funds that profit from price trends in futures, options and currencies, benefited from the sharp rise in commodity prices, returning over 18% (3.28% in June). Funds in the Morningstar Global Non-trend Hedge Fund Index, those that take macro-economic bets on interest rates and currencies, benefited from the falling dollar and the rising Euro, earning 0.33% in June and more than 12% over the last 12 months. The last 12 months also saw high volatility. Those equity arbitrage funds that specialize in trading volatility helped drive the Morningstar Equity Arbitrage Hedge Fund Index to a gain of more than 8.57% in the last year and 1.12% in June.
Not surprisingly, these top-performing categories have also experienced the most inflows. For the period ending May 31 (asset flow reporting lags performance reporting), hedge fund investors poured more than $6 billion into global trend funds and $2.4 billion into global non-trend funds tracked by Morningstar. On the opposite end of the spectrum, investors fled the U.S. equity and Europe equity hedge funds in the Morningstar database, taking more than $7.7 billion and $6.9 billion out of these categories, respectively.
Morningstar’s hedge fund flow data also show that, through May, assets moved to the Morningstar-rated 4-, and 5-star hedge funds, and redeemed the 1-, 2-, and 3-star hedge funds. Four- and 5-star hedge funds received more than $10 billion in new assets through May, while 1- and 2-star hedge funds bled almost $10 billion in assets over the same period.
Returns of Morningstar’s Broad Category Indexes, indexes that group funds in related categories, highlight that the event-driven funds were the hardest hit. This index includes funds in the Morningstar Corporate Actions and Distressed Securities Categories, which sometimes take bets on depressed or out-of-favor companies, and look for a reversal over the longer-term. These bets may look worse before they look better, given the economic conditions.
Morningstar has approximately 8,500 hedge funds and funds of hedge funds in its database and is is a leading provider of independent investment research in North America, Europe, Australia, and Asia.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
