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 – Massachusetts will cut investments in hedge funds after its public pension plan lost a record 24 percent on all assets in the fiscal year ended June 30.
The state pension plan’s board of trustees voted today to lower the amount of money invested in hedge funds to 8 percent, or about $3 billion of the $37.7 billion it oversaw at the end of June, from 12 percent, which is about $4.5 billion. The vote reversed a five-year effort by the pension system to boost returns by expanding such alternative investments.
”We all have to understand we’re making a bet on what assets will do well,” said state Treasurer Timothy Cahill, chairman of Massachusetts’s pension reserve investment management board. “Ultimately, we don’t make decisions based on the short-term, but we get measured on the short-term.”
HedgeCo.net (West Palm Beach) – Swiss based hedge fund and FoHFs provider, Infonic AG, has expanded to the US by establishing a New York office. Infonic named IT specialist Nolan Phillips as Chief Operating Officer, and financial expert, Bridget Piraino, Head of Global Marketing & Sales.
“I’m delighted to welcome Nolan Phillips and Bridget Piraino to the executive team. Adding to the depth of our management team demonstrates Infonic’s commitment to becoming the trusted operational backbone of the institutional hedge fund investor industry,” said Tom Furrer, Infonic’s CEO. “With the establishment of a New York office we will expand our presence delivering innovative products and dedicated client services to asset managers and administrators of funds of hedge funds.”
Nolan has held executive and consulting positions at Coopers and Lybrand, Union Bank of Switzerland, Société Générale, Bankers Trust, IQ Financial Systems and Bank of Bermuda, Alternative Investments Program.
Piraino’s career has included Aregon International, the UK financial data delivery system provider, and Goldman Sachs and Co’s Fixed Income Research group. She held senior technical management and financial services marketing positions with Sybase, TIBCO Financial Systems and SeeBeyond.
Headquartered in Switzerland with offices in Zurich and New York, Infonic AG is the provider of HedgeSphere, a product suite for operations of funds of hedge funds.
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Reuters UK – A draft European Union law that will require hedge fund managers to be authorised needs refining to cover other types of alternative investments better, a senior MEP said on Tuesday.
The Alternative Investment Fund Managers law is before the European Parliament and EU states for adoption, but is already subject to heated debate.
It covers many types of investments that do not come under the EU’s long-standing mutual funds framework known as UCITS.
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.
HedgeCo.net (West Palm Beach) – ALTIN, the London and Swiss-listed fund of hedge funds, has released a full disclosure of its underlying investments and weightings. ALTIN has adopted a position of total transparency, and holds one of the world’s longest track records as an exchange-listed fund of hedge funds.
ALTIN has reduced its cash allocation from 14% on 1 March 2009 to 6.3% on 1 July 2009, as part of an active investment programme into hedge funds to benefit from the current investment opportunities. The portfolio, featuring more than 30 underlying funds representing 10 different strategies, is particularly well diversified and boasts a positive performance of +5.18%[1] to date in 2009.
Only approximately 20% of funds held by ALTIN have restricted redemptions of one form or another. This relatively low proportion does not affect ALTIN as, being a fixed-capital investment company, it is not faced with redemption requests.
The portfolio’s great liquidity allows the investment manager to perform a dynamic management and benefit from the current investment opportunities. The manager has thus launched a significant investment programme in the past months.
ALTIN AG was launched in December 1996 and has been listed on the Swiss Stock Exchange since its inception as well as on the London Stock Exchange since 2001. ALTIN is a multi-strategy fund of hedge funds investing in more than 30 hedge funds representing various investment styles. The Company holds one of the world’s longest track records as an exchange-listed fund of hedge funds. Its objective is to generate an absolute annual return in US dollars terms with lower volatility than equity markets.
ALTIN is managed by 3A SA (Alternative Asset Advisors), a management firm specialised in alternative investments and member of the SYZ & CO Group.
3A currently manages more than USD 2.1 billion in hedge fund assets. 3A also provides alternative research and due-diligence services on an additional USD 4 billion in alternative investments.
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HedgeCo.net (West Palm Beach) – State Street Corporation released two papers on alternative investments as part of its Vision series of thought-leadership reports. The papers examine two key components of alternative investments, hedge funds and private equity, and their future prospects amid the global economic downturn.
While both industries have been hard-hit by the financial crisis, they will likely adapt to the changed investment environment and continue to provide significant long-term opportunities for institutional investors, State Street says.
“With so much debate within these sectors as complexity has heightened over the past year, we want to help identify the actual market conditions and trends that will determine the future of hedge funds and private equity,” said Jack Klinck, executive vice president and global head of State Street’s Alternative Investment Solutions team. “The research and insights presented in these reports will help institutional investors as they make their investing decisions.”
“New Views of the Hedge Fund Industry” cites two major trends affecting the industry: a migration to third-party administration and custody services and increased regulatory oversight. While hedge fund redemptions are expected to continue through 2009, according to the report, “anecdotal evidence suggests that investors are starting to regain confidence.”
“The hedge fund industry will emerge from the financial crisis – smaller, in terms of the number of funds, but eventually larger in terms of assets under management,” the report states.
State Street’s second Vision paper, “Private Equity at the Cross Roads,” notes that although the industry is currently under pressure from the financial crisis and recession, “many believe that private equity is about to enter a new phase of more sustainable growth. Over the long-term, investors and governments will look to private equity for its significant capital resources, management expertise, and high risk tolerance to help restore economic strength as impaired assets are wound down and fresh investments are required for new and expanding businesses.”
With approximately $252 billion in hedge fund assets as of March 31, 2009, State Street provides a complete set of servicing and management solutions for hedge funds, including recordkeeping, fund accounting, valuation, risk management and regulatory reporting.
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HedgeCo.net (West Palm Beach) – Viathon Capital, LP has officially launched the Whitewater Master Fund, LP, a credit opportunity fund focused on non-correlated absolute returns.
Employing a fundamental, credit-intensive research process in order to identify long and short investment opportunities in the United States and Europe, the hedge fund’s objective is to seek long term capital appreciation by investing in high yield and investment grade corporate bonds and bank debt.
As part of this launch, Viathon Capital has affiliates of Citigroup Alternative Investments, LLC (CAI) as its seed investor in this new fund. The fund launched in May of 2009 with $50 million in capital and had a net return of +0.92 % for the month of May and estimates +2.10% for June bringing it’s inception to date return to approximately +3.02%.
Viathon Capital’s team includes four investment professionals and two trade support/back office personnel with backgrounds from Marathon Asset Management, Goldman Sachs, Merrill Lynch, Neuberger Berman, SAC/Sigma, Providence Investment Management and Lehman Brothers.
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West Palm Beach (HedgeCo.net) – Roy H. Callahan has been selected as portfolio manager and member of the investment committee at alternative investment firm, Coast Asset Management, LLC firm’s , effective June 15.
"We are thrilled that Roy Callahan has agreed to rejoin our team," said David Smith, president of Coast. "Roy brings a wealth of knowledge and alternative investments expertise that will be invaluable as we continue to steer Coast through the challenges brought on by the global recession."
Callahan joins Coast from Stratos Advisers, a southern California-based hedge fund of funds manager. Previously, Callahan worked at Financial Risk Management (FRM) where his responsibilities included serving on the investment and portfolio management committees as well as training and mentoring FRM investment analyst groups. He spent six years from 1994-2000 at Santa Monica, CA-based Coast as director of research where he helped Coast founder David Smith develop and launch the firm’s initial multi-manager investment strategies.
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istockAnalyst.com – I’ve always been a fan of what are now called "alternative investments" and never really cared as much for "generic index style equities", although I have owned them of course. Property, commodities, gold and higher yield instruments were always more interesting to me once I began to understand how imbedded inflation really was in the modern world.
Now that I am retired and living on my money, my "business" is to generate income as a goal more important than capital gains. Increasingly I am working on the great divide between tax-deferred and taxable accounts in the US, now and for the future. Perhaps we should call them "totally taxable" and "partly taxable" accounts since every penny one takes out of the IRA or 401K is taxable while only gains and dividends and interest are taxable from the taxable accounts.
West Palm Beach (HedgeCo.net) – Viathon Capital, LP has announced the launch of a new credit focused opportunity fund, the Whitewater Master Fund, LP, as of May 1, 2009. The launch has affiliated with Citigroup Alternative Investments LLC (CAI) as seed investor in this new fund.
The fund employs a fundamental, credit-intensive research process in order to identify long and short investment opportunities in both US and European markets.
"We have a multi-million dollar, best-in-class trading and risk management system that allows us to manage portfolio risk on a real time basis and seamlessly integrate with our prime brokers and independent administrator." Bob Becker and Rob Comizio, managing partners said, "In addition, we have the relationships, infrastructure and investment process in place to effectively execute our investment strategy."
"As managers of the Whitewater Master Fund, we are keenly aware of the current changes and challenges in our industry. As a result, we have instituted a number of key policies and initiatives specifically designed to service the needs of sophisticated investors in this new environment." they said.
The performance estimate for Whitewater Master Fund for the month of May 2009 was approximately +1%. Viathon Capital, LP has 60 years of combined market experience including four investment professionals and two trade support/back office personnel to manage the new fund.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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!
FierceFinance – Not too long ago we were lamenting the trend by top investment banks to move into hedge funds and alternative investments in general. Buying hedge fund firms and launching them internally didn’t work out so well for Citigroup. It also wasn’t a home run for other firms, notably Bear Stearns.
Has JPMorgan Chase found a way to buck the trend? It has announced it will buy the portion of Highbridge that it doesn’t already own, and has shut down its proprietary hedge fund and private equity businesses. As of now, it looks like the Highbridge gambit has paid off-and then some. It remains among the biggest of the hedge fund firms, and has tripled its assets under management since JPMorgan invested in December of 2004, reports TheStreet.com. My sense is that Highbridge is one of the mega fund firms that is really well positioned to steal market share.
Dallas Morning News – There are 200 hedge funds in this area, putting the Dallas area third behind only New York and San Francisco in the number of hedgies. Most have offices in the Crescent, Preston Center and in Plano.
Hedge funds – a kind of mutant mutual fund for the wealthy – have been blamed for much of what ails Western Civilization, but make no mistake, they remain one of Dallas’ most thriving industries that no one ever heard of.
Ed Easterling, senior fellow of the alternative investments center at SMU’s Cox School of Business and a hedge fund manager himself, said the average hedge fund dropped just over 20 percent last year. The total assets in the Dallas funds dropped from a high of about $30 billion to about $20 billion today.
