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.
San Francisco Chronicle – Virgin America could not have picked a worse time to launch an airline, on the eve of gravity-defying fuel prices and a cruel recession. The financial numbers are still red after a year and a half of operations, but the chief executive sees a break in the clouds and profitability on the horizon for the only California-based airline.
Seeking Alpha – If someone was asked to name a fund in the global macro game, undoubtedly Tudor Investment Corp or Moore Capital Management would be among the most frequent responses. The global macro strategy has fared well in the world of hedge funds. Paul Tudor Jones’ Tudor Investment Corp has earned an annualized return of greater than 20% over the span of two decades.
Louis Bacon’s of Moore Capital Management shares the same accolade. And, while they are both down this year, they have fared much better relative to many of their peers and the market indexes in general. Tudor’s flagship fund finds itself -5% for the year, while Moore was -2.9% year-to-date through November as we noted in our November hedge fund performance update.
But, in a never-ending quest for outperformance, Tudor and Bacon want more. And, in order to accomplish that, they see it fit to return to their roots.
Bloomberg – The financial crisis is imposing heavy burdens on the hedge-fund industry, and the strain has become more visible. By the end of last week, about 100 hedge funds imposed restrictions on withdrawals. Many funds have become financial roach motels: Investors can put their money in, but they can’t get it out.
Deregulation has taken a lot of blame for this financial crisis, but an interesting footnote is that the lightly regulated hedge-fund industry has stayed healthy enough to avoid the bailout game.
But are rising redemptions a sign that hedge funds may need a handout, too?
It’s small wonder that some funds have decided to put the brakes on. Morgan Stanley estimates that redemption requests are running at 15 percent to 30 percent of total hedge-fund assets.
Norwalk Advocate – Crisis can create opportunity, and for the smart hedge fund operator, the downturn gripping the global investment community is a chance to build a respected reputation in the industry.
While the financial crisis has been unprecedented, so will be the opportunities for firms that have superior compliance and risk management capabilities, said Walter Zebrowski, chairman of the Regulatory Compliance Association, which co-hosted the Hedge Fund Leadership Thought Summit this week at the Stamford Marriott.
"What it’s going to take is your leadership to act as the brake pedal when people want to take risks," he said, adding that the government plans on putting regulations on the hedge fund industry. "What does this mean for us? Everyone’s going to have to step up their game in terms of risk management."
Zebrowski is also chief investment officer for Hedgemony Partners, a Manhattan-based global private equity firm.
New York Post- If the Securities and Exchange Commission expands its clampdown on short-selling, it is widely expected to slam hedge funds like Stephen Cohen’s SAC Capital and James Simon’s Renaissance Technologies, which profit from fast-and-furious trading, experts predicted.
That’s because under the long-accepted rules of the short-selling game, these hedge funds, which often trade through sophisticated computer programs, have been able to skip the process of borrowing the shares needed to cap off their short positions.
But that luxury is now being challenged by the SEC’s mandate requiring investors who short 19 financial stocks, including Fannie Mae and Freddie Mac, to borrow the shares they short before they bet against the stock whose price they predict will fall.
New York Times Blogs- Big Brown may have failed to complete his Triple Crown sweep on Saturday — indeed, he came in dead last. But hasn’t slowed down what appears to be a burgeoning new sector: the race-horse hedge funds.
Big Brown’s owner, International Equine Acquisitions Holdings, isn’t the only player trying to raise a new horse-focused hedge fund, in which the owners adopt the much-ballyhooed two-and-twenty fee structure. The Wall Street Journal reported that Nick Zito, the trainer whose horse bested Big Brown, is also seeking to get into the game with his own fund.
