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 – It was a crisp autumn day in November 2005 when hedge fund manager John Ho entered the half- century-old Electric Power Development Co.’s headquarters in Tokyo, betting that Japan’s corporate attitudes were ripe for change.
Ho, then director of Asia-Pacific investments at the Children’s Investment Fund Management UK LLP, also known as TCI, was ushered into a conference room with a worn carpet to meet with Masayoshi Kitamura, then executive vice president of the utility. The visitor, who was offered a bottle of water, told Kitamura he wanted to learn more about the company’s plans for growth.
HedgeCo.net (West Palm Beach) – The Alternative Investment Management Association (AIMA), the global hedge fund industry association, has warned that the European Commission’s draft directive on Alternative Investment Fund Managers would hit fund managers and investors around the world if enacted into European law.
The hedge fund assiciation argues that the directive creates potentially major difficulties for non-EU funds and/or non-EU managers in accessing the EU market. Marketing of funds by managers will only be allowed with a special marketing passport that the directive creates. However the directive also delays its introduction by three years and imposes significant obstacles (such as demonstrating regulatory and tax equivalence) to obtaining it.
AIMA suggests that the directive makes it so difficult and costly for non-EU funds and managers to access the EU market that it is clearly protectionist in effect, if not in intent. This will have major consequences for non-EU funds and managers (particularly in North America and Asia-Pacific) who will face a major loss of business in the EU. Investors will face loss of choice, increased costs and diminished returns.
Andrew Baker, CEO of AIMA, said, “Funds and managers outside the EU face being locked out of the EU market with extremely worrying consequences. Global industry centres such as the United States , Canada , Switzerland , Hong Kong , Singapore , Japan , Australia and South Africa , will all be affected by this. This is not just an internal EU matter.
This will also have a very significant impact on investors. EU investors, in particular, face a situation where they can use only EU asset managers of EU domiciled funds investing assets under an EU custodian. And international investors with EU funds or managers will find that their costs will go up and their returns will go down because of the restrictions and compliance costs the directive imposes.
We believe that the provisions of the draft directive with protectionist consequences will not only hit the industry worldwide but weaken the competitiveness of the EU in investment management and make the EU a less attractive destination for international investment. Naturally, we hope that it can be revised to avoid this.”
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Bloomberg – Gold climbed in Asian trading as equity gains and an improving economic outlook boosted demand for the metal as a hedge against accelerating prices.
The MSCI Asia Pacific Index of equities gained for a sixth day after an index of leading economic indicators in the U.S. topped projections, indicating the country may be emerging from recession. Federal Reserve Chairman Ben S. Bernanke wrote in the Wall Street Journal that the central bank “will need to tighten monetary policy” to prevent inflation.
Bloomberg – Kapstream Capital, Australia’s biggest fixed-income hedge fund, will almost double assets under management in the next month as pension funds seek returns in all market conditions.
The Sydney-based firm has secured investments that will take funds it oversees to A$1.2 billion ($965 million), from A$650 million, said founder Kumar Palghat, Pacific Investment Management Co.’s former head of portfolio management in Asia- Pacific. He aims to raise A$1.5 billion by end-2009 as investors switch to managers that made money even as global markets tumbled last year.
“People are recognizing that there are some opportunities in the credit space and they are more willing to start investing in them now,” said Robert Dasilva, managing director of Asia- Pacific fixed income in Sydney at Principal Global Investors, which manages $228 billion in assets globally.
Assan Din, a former Lehman Brothers Holdings Inc. credit trader, is setting up a hedge fund to trade corporate bonds and derivatives in Asia.
SaKa Capital’s fund, which will have a capacity of more than $500 million, will start in September with $25 million to $50 million sourced mainly from founding members and friends, Din, 38, said. The Singapore-based firm will subsequently raise capital from institutional investors, including U.S. pension funds and endowments, once it builds a track record, he added.
Times Online – Hedge funds are on course to deliver their best first-half performance in a decade, as investors renew their faith in the sector in the wake of last year’s calamitous losses.
Hedge funds worldwide returned 5.63 per cent to their investors in the year to last Thursday, according to Hedge Fund Research (HFR), the Chicago-based research firm that compiles daily statistics on performance.
Strategies that predict big directional market moves made profits of 12.52 per cent over the period as equity markets in Europe, the US and Asia-Pacific posted strong gains and liquidity gradually returned to the credit markets.
Reuters Hong Kong – Credit Suisse on Wednesday said a top UBS AG prime brokerage banker will join the bank as head of prime services for Asia-Pacific, based in Hong Kong.
Since 2007, Matt Pecot was the Americas head of prime brokerage services for UBS, having held a similar Asia-Pacific role with UBS from 2004 and 2007.
Credit Suisse, under less financial pressure than rival UBS, is in a position in Asia and elsewhere to poach top bankers from its peers.
West Palm Beach (HedgeCo.net) – UK-domiciled funds had a strong week to Friday May 8, led by global emerging markets products, according to data from Thomson Reuters research firm Lipper.
Asia Pacific funds also performed well, as did funds investing in European smaller companies. Global bonds, UK gilts and UK index-linked gilts were the only sectors to post negative returns in the week.
Lipper, a Thomson Reuters company, is a leading fund research and analysis organisation, providing independent insight on global collective investment including mutual funds, retirement funds, hedge funds, fund fees and fund expenses to the asset management and media communities.
Bloomberg – DragonBack Capital Ltd., a Hong Kong-based manager co-founded by a former Lehman Brothers Holdings Inc. executive, reopened its flagship hedge fund to investors after redemptions cut assets in the fund.
Assets in the Asia-Pacific Equity Multistrategy Fund fell 47 percent from the end of October peak, to $310 million, Chief Executive Officer Robert Lance said in an interview yesterday.
The fund’s 3.75 percent gain in 2008 put it among less than a third of hedge funds that made money in the worst year for the global industry. Investors have reduced holdings in some profitable funds after their weightings in portfolios exceeded limits set for specific hedge fund strategies.
Bloomberg – DragonBack Capital Ltd., a Hong Kong-based manager co-founded by a former Lehman Brothers Holdings Inc. executive, reopened its flagship hedge fund to investors after redemptions cut assets in the fund.
Assets in the Asia-Pacific Equity Multistrategy Fund fell 47 percent from the end of October peak, to $310 million, Chief Executive Officer Robert Lance said in an interview yesterday.
Bloomberg – Hari Kumar, a founding partner of New York-based asset manager TPG-Axon Capital Management LP, is starting his own hedge fund with $75 million of initial capital from him and a partner, said two people familiar with the plan.
LionRock Capital Pte, based in Singapore, will begin investing June 1 with the money from Kumar and Julian Snaith, the people said. The multistrategy fund will focus on trading Asia-Pacific stocks, said the people, who declined to be identified because the information isn’t public.
LionRock may raise capital from external investors at a later date, though the timing and terms haven’t been decided, they added. Kumar and Snaith declined to comment when reached through e-mail.
The China Post – Asia-Pacific banks, brokerages, insurers and private equity firms are more optimistic about mergers and acquisitions as they seek to expand following a decline in asset prices, according to PricewaterhouseCoopers LLP.
About 42 percent of financial institutions in the region expect to make an acquisition over the next year, compared with 38 percent a year earlier, according to a PwC survey of 215 senior executives conducted in Jan. and Feb. Still, 83 percent of the respondents expect the global credit crunch and economic slump to last for another one to two years.
