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.
Forbes – Long-only hedge fund strategies posted the best returns of the asset class in July as global stock markets continued their upward trend, according to data in a report published by Lipper Global on Tuesday.
As the industry looks to repair itself following last year’s heavy losses and record redemptions, these new figures will give more ammunition to market watchers who claim that the industry is on the road to recovery.
Gulf Times – It can be hard to separate the wheat from the chaff when there is no immediately apparent difference between them. These days, the world of hedge funds more closely resembles a vast field of chaff, with just a few shoots of wheat here and there.
Given that there are some ten thousand hedge funds in existence around the world today, and only one in ten is really a hedge fund in the true sense, it takes a highly skilled and firm hand to sort through them all. In recent years, fund selectors – some quite renowned – have been offering clients some of these supposed ”hedge funds” that match neither the concept nor even the definition of this asset class.
Morningstar – A new breed of clone funds seeks to capture "alternative beta." It wasn’t long ago that hedge funds were on the very cutting edge of finance. Their pitch was simple: they could deliver pure alpha , rather than the heavy doses of beta being dished up by long-only mutual funds. The rub was that you’d have to pay dearly for that elusive component, and to get it, managers would often have to operate in inefficient markets where liquidity and capacity were scarce. Now that some of the mystique has left the asset class, a new concept has made its way to the investing frontier: hedge fund replication.
West Palm Beach (HedgeCo.net) – Arden Asset Management LLC, a leading independent fund of hedge funds manager, and J.P. Morgan today announced an agreement under which Arden will manage a $1.1 billion proprietary hedge fund of funds portfolio for J.P. Morgan’s investment banking division, effective July 1, 2009. J.P. Morgan’s investment bank has agreed to seed several new Arden funds and invest in one of Arden’s current flagship funds with these assets.
As part of the agreement, a team led by Shakil Riaz, Chief Investment Officer of J.P. Morgan’s proprietary hedge fund of funds program since inception in 1995, will join Arden. Mr. Riaz will become a member of the Arden Investment Committee and continue his investment leadership role for new funds seeded by the J.P. Morgan assets. The existing Arden funds and customized accounts will continue to be managed by Arden senior investment professionals and Investment Committee members: Averell H. Mortimer, Chairman; Henry P. Davis, Managing Director and Head of US Manager Research; Ian P. McDonald, Managing Director and Head of European and Asian Manager Research; and Matthew Bianco, Managing Director and Head of Risk Management.
“Arden’s high quality institutional infrastructure and well-established investment processes were important in our decision to select the firm to manage these assets,” said Robert Case, head of Principal Investment Management for J.P. Morgan’s investment bank. “Partnering with Arden, which has a proven track record of managing absolute return programs through many market cycles, enables us to continue participation in this attractive asset class, while better managing our overall capital commitments.”
Averell Mortimer, Arden President and Chief Executive Officer, said, “We are pleased to partner with J.P. Morgan on this unique venture, which we believe will create significant value for both Arden investors and J.P. Morgan in the years to come. Importantly, this initiative further strengthens our organization and brings additional specialization and expertise to Arden’s global investment program. We warmly welcome Shakil and his colleagues to Arden and believe investors will benefit from their market experience and long-term investment record as we develop new strategies to meet the expanding needs of our sophisticated institutional clientele.”
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West Palm Beach (HedgeCo.net) – BlackRock, Inc. announced the purchase agreement to acquire Barclays Global Investors, including its market-leading ETF platform, iShares, from Barclays PLC.
“We are incredibly excited about the potential to significantly expand the scale and scope of our work with investors throughout the world. The combination of active and passive investment products will be unsurpassed, and will enhance our ability to offer comprehensive solutions and tailored portfolios to institutional and retail clients,” said Laurence D. Fink, BlackRock Chairman and CEO. “People are at the heart of successful firms, and the depth of talent in BlackRock Global Investors will be tremendous. The thought leadership and intellectual capital of the combined firm ensure we will remain at the forefront of addressing key investment issues and trends that have emerged over the past decade and are now accelerating dramatically, including globalization of capital markets, a greater focus on asset allocation, multi-asset class solutions, fiduciary management, risk management and advisory services.”
The combination of BlackRock and BGI would bring together market leaders in active and index strategies to create the preeminent asset management firm operating under the name BlackRock Global Investors. The transaction would create an independent and fully integrated asset management firm with combined assets under management of over $2.7 trillion.
The firm’s products will include equities, fixed income, cash management and alternatives, and will offer clients diversified access to global markets through separate accounts, common trust funds, mutual funds, ETFs, hedge funds, and closed-end funds.
BlackRock has received commitments from a group of institutional investors to purchase 19.9 million shares at the closing of the transaction for a total of $2.8 billion.
Alex Akesson
Edtior 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!
Stuff – Mauled by the carnage on Wall Street, mutual funds are copying hedge fund strategies in an effort to regain some of the shine they have lost this decade.
Many investors have been burned investing in a single asset class and withdrew $234 billion (148 billion pounds) from U.S. stock funds last year as the deep bear market sparked the first annual outflow of long-term investment in mutual funds since 1988.
But as stocks sank, hedge funds soared. The Standard & Poor’s 500 Index, a benchmark for the broad U.S. stock market, returned a negative 40 percent this decade through the end of 2008. Hedge funds, meanwhile, gained 55 percent over the same period, Hedge Fund Research’s fund-weighted composite index shows.
West Palm Beach (HedgeCo.net) – British Virgin Islands based hedge fund manager Tranen Capital took the lead in the Fixed Income – Asset-Backed Lending category for March 2009 with a return of 2.49%.
In addition to the March performance, the fund, ‘Tranen Capital Alternative Investment Fund Ltd.’ posted a YTD (through April) change in NAV of 11.5%.
“Investors are keenly aware of the dismal and unstable returns from the major financial markets. They are demanding alternatives and absolute returns. The Barclay ranking certainly highlights the strategy’s excellent returns but more importantly, it demonstrates that the funds’ performance is non-correlated to financial markets. The Fund’s NAV has increased 27% since July 2008, which has been independently determined by our actuaries, Data Life, and confirmed by our Administrator Commonwealth Fund Services. Additionally, we have also recently delivered our first independent audit to investors," says Kenneth Landgaard, Portfolio Manager.
Tranen Capital’s strategy is to trade life insurance policies in the Life Markets Space, more commonly referred to as the Life Settlements Market. The Life Markets Space enables seniors to sell their life insurance contracts for more than the cash surrender value than they would otherwise receive from the Insurance Company. The credit crisis has helped create more supply as Seniors (65 or older) are looking for other ways to generate cash. In fact, the life settlements market is expected to grow to over $160 billion over the next several years, according to a Sanford Bernstein report.
Arthur Bowen, Director and in-house counsel explained, “The growth in the life settlement market confirms the validity of this asset class and we continue to see great interest from institutional investors. These sophisticated investors understand the strategy and they appreciate that Tranen has gone to great lengths to provide an institutional quality product with a great level of transparency.”
Tranen Capital offers qualified offshore investors access to the Tranen Capital Alternative Investment Fund Ltd. with a 1% acquisition fee and a 20% incentive fee. The minimum investment is $100k.
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Reuters UK – Mauled by the carnage on Wall Street, mutual funds are copying hedge fund strategies in an effort to regain some of the shine they have lost this decade.
Many investors have been burned investing in a single asset class and withdrew $234 billion (148 billion pounds) from U.S. stock funds last year as the deep bear market sparked the first annual outflow of long-term investment in mutual funds since 1988.
But as stocks sank, hedge funds soared. The Standard & Poor’s 500 Index .SPX, a benchmark for the broad U.S. stock market, returned a negative 40 percent this decade through the end of 2008. Hedge funds, meanwhile, gained 55 percent over the same period, Hedge Fund Research’s fund-weighted composite index shows.
West Palm Beach (HedgeCo.net) – Intellectual Property Asset Manager, Quest Patent Research Corporation, (QPRC) has entered into an exclusive capital management agreement with a newly formed Delaware limited liability company, PSI Capital Management, LLC. (PSI) to launch a new patent asset hedge fund, Patent Strategies I Fund, LP.
Domiciled in New York, with $250,000 as minimum investment, the fund has a 2% management fee, a 2 year lockup period and JP Morgan Chase as custodian. The launch comes with a new website.
Jon Scahill, QPRC President, and Joby A. Hughes, minority PSI owner, will serve as the Principals of PSI. Under the terms of the agreement, QPRC, through PSI, will be solely responsible for researching, selecting and monitoring investments and deciding on when and how much to invest or withdraw from a particular investment. The new fund has an investment strategy of acquiring interests in patent assets and generating revenues from licensing activities relating to patent assets.
"QPRC’s management provides a unique resource for taking on intellectual property assets at any stage in their development." Hughes said, "As a market leader in the development of early stage intellectual property, QPRC is already in a position to manage and commercialize those types of assets. PSI provides QPRC additional financial resources to develop a wider array of assets to their fullest potential. It is exciting and an honor to be included in this next phase for QPRC.”
“Collaboration on this initiative with an individual of such caliber and performance as Hughes is a tremendous value." Scahill said, "This new partnership will further our ability to provide shareholders participation in a dynamic asset class, uncorrelated to the broader market.”
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!
West Palm Beach (HedgeCo.net) – Swiss alternative investment company ALTIN AG has said it intends to maintain its share price by buying back between 5% and 10% of its own shares, its Board of Directors has also approved a capital reduction program. ALTIN’s hedge fund’s management performance was predictably negative (-29.20%) in 2008, yet considerably higher than key stock market indices.
2008 proved a particularly harsh year for the financial markets, compounded by additional difficulties specific to the hedge fund industry. The severe credit crisis often forced hedge funds to fire-sell positions.
In addition, the increased correlation between hedge funds and equity markets did not protect them against falling stock markets. In performance terms, the year 2008 has thus been negative for hedge funds and ALTIN proved no exception with a -29.20% fall in its net asset value. However, in light of the losses incurred by world stock markets over the same period, this result is acceptable and hedge funds remain the best performing asset class over the medium term.
Invested in approximately 40 hedge funds, the company has chosen to avoid illiquid strategies that have caused the closing of a number of hedge funds, ALTIN’s manager has been favouring liquidity since 2007.
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!
West Palm Beach (HedgeCo.net) – Credit Suisse announced the launch of a new Global Macro Replication Index which aims to capture the risk/return characteristics of the Credit Suisse/Tremont Global Macro Hedge Fund Index.
The new index enables investors to gain liquid, transparent insight into the global macro hedge fund sector.
"Due to a frequent lack of transparency, hedge fund investors found themselves exposed to numerous unforeseen risks in 2008, and problems were only exacerbated when liquidity dried up just as investors needed it most. Yet despite the drawbacks, hedge fund returns remain positive relative to equities and hedge funds continue to serve as an effective portfolio diversifier. Many investors have been left seeking liquid, transparent and cost effective solutions for gaining access to the asset class," Credit Suisse delcared.
Dr. Jordan Drachman, Head of Research for Credit Suisse Alternative Beta Strategies, said, “In the wake of current investor sentiment, replication strategies are gaining in popularity for their ability to provide similar risk/return characteristics to a well diversified portfolio of hedge funds, while avoiding certain drawbacks of hedge fund investing such as illiquidity, lack of transparency and headline risk.” Drachman added, “We are currently seeing increased interest in the Global Macro sector, as the strategy has a history of producing positive performance during market downturns and has been the top performing hedge fund sector since the inception of the Credit Suisse/Tremont Hedge Fund Index in 1994.”
The Global Macro Replication Index joins the existing Long/Short Equity Replication Index to become the second in a suite of Alternative Index Replication (AIR) products. Together, the indices offer insight to two of the largest and most popular hedge fund sectors in the current market environment.
Professor Bill Fung, a key research advisor to Credit Suisse’s alternative beta efforts, stated “In developing a replication index, it is imperative that researchers understand the in-depth intricacies of hedge fund sectors and individual manager performance.” Fung went on to say, “The team has access to superior data through the Credit Suisse/Tremont Hedge Fund Index. Together with regular contact with hedge fund managers, this combination provides practical insight into the behavior of hedge fund strategies and adds a level of fundamental analysis to the quantitative construction of the Index. This is particularly important in the Global Macro space which is dominated by managers that engage in dynamic strategies in an ever changing market environment; and these managers have done so successfully during very challenging times historically as well as more recently.”
Index values are finalized daily and quoted on Bloomberg under the symbol AIRI. Performance, descriptions, statistics and downloadable price history can be found on the newly launched Credit Suisse Alternative Beta website,www.credit-suisse.com/alternativebeta.
Credit Suisse has helped pioneer the measurement of alternative beta for more than a decade. By bringing together indexing expertise, an academic partnership with key research advisors and extensive global resources, Credit Suisse continues to lead the industry in developing alternative index replication products.
Zawya.com – Although nearly half of all sovereign wealth funds (SWFs) are based in the Middle East and North Africa region, only 32 per cent of them invest in Mena-focussed hedge funds, new data has revealed.
Almost all of the SWFs known to be investing in hedge funds pursue a global investment strategy.
North America, as a mature and large hedge-fund market, is also a popular destination for investments in this asset class, with most of the larger SWFs, including the large Mena funds, targeting hedge funds there, a report by Preqin said.
