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.
New York (HedgeCo.net) – Hedge fund and prime broker provider, FTEN has expanded to Europe establishing FTEN Europe Ltd. and the hire of Valerie Bannert-Thurner Ph.D., who assumes responsibilities as European Executive Director.
Ms. Bannert-Thurner comes to FTEN after establishing European operations for Skyler Inc. where she held a variety of executive positions including head of product strategy, strategic alliances, marketing and business development.
“Our expansion into Europe addresses a growing demand from the European trading community,” said Ted Myerson, CEO of FTEN. “Brokers, exchanges and infrastructure providers across Europe are seeking to expand their business to accommodate the rapid growth in high-frequency trading,” continued Myerson. “Valerie will adapt our business model and partnering arrangements to the European landscape, while introducing best practices for high-frequency trading and high-frequency risk controls,” Myerson added.
“My goal is to establish FTEN as a trusted partner for market participants who want to expand their Sponsored Access business into this high-frequency sector,” claimed Ms. Bannert-Thurner.
The FTEN Execution and Risk Control platform offers hedge funds, proprietary trading firms and their sponsoring broker a platform for high speed executions across multiple venues and asset classes along with real-time pre-trade and post-trade risk controls to continuously monitor ’black box’ trading positions and limits.
Ms. Bannert-Thurner has a B.S.M.E., M.S. and Ph.D. in Strategic Management from the Swiss Federal Institute of Technology, ETH Zurich. She has authored articles in finance, strategy and technology, and has spoken at several Industry conferences.
HedgeCo.net (West Palm Beach) – Hedge fund investor consultant and adviser, Hennessee Group LLC, today announced some highlights from the first half of 2009 and the month of June, excerpts follow:
“Most hedge fund managers are not buying into the ‘Green Shoots’,” commented Charles Gradante, Co-Founder of Hennessee Group. “While markets rallied sharply in April and May, most managers remained conservative. I think we have reached an inflection point as momentum seems to have faded. We should see a return to stock picking based on fundamentals, which are rather negative. In addition, the technicals are also bad, leading us to believe in a summer correction.”
“Hedge funds have outperformed equity benchmarks by a 10% margin in the first half of 2009,” said Lee Hennessee, Managing Principal of Hennessee Group. “The outperformance is largely due to the ability of hedge funds to profit from their short portfolios, as we saw in January and February. While hedge funds are routinely publicized as high risk vehicles, the reality of the situation is that the average hedge fund has demonstrated significantly less volatility than traditional asset classes for the 22 years we have been advising investors.”
Despite a flat June, the second quarter gain was the strongest quarterly gain since 1998. In June, energy and materials sectors declined as worries mounted that the global economy could experience a drawn out recovery after the World Bank cut the global growth forecast.
Managers remain concerned that the recent rally in the financial markets and resurgence in confidence is built on hope supported by government stimulus rather than a real improvement in fundamentals (i.e., employment and housing).
Long/short equity funds will continue to rely on individual security selection while maintaining low levels of directional exposure as the official second quarter earnings season gets under way with the Alcoa earnings announcement on July 8th. Many managers are overweight technology in long portfolios, the top performing sector for the month and the year, while maintaining short positions in consumer and financial sectors.
Managers have found opportunities in strategic acquisition activity as well as distressed merger and acquisition activity.
After three months of strong gains, emerging markets cooled, declining slightly in June, but are substantially positive year to date. China was one of the few bright spots in June as the equity markets continued to advance. The Hennessee Macro Index declined -1.08% in June (+7.10% YTD).
While May was a record breaking month for commodities, June brought a sharp pull back. Positions in gold, silver, and agricultural commodities all detracted from performance as prices fell. Managers also suffered losses as the U.S. dollar rallied versus most currencies on speculation that the current market rally has ended and reports that the Fed will not expand its purchases of Treasuries. Oil was a positive, up +5.4% in June; although, many believe that prices are being driven by speculation and expect profit taking as oil is up +56.4% thus far this year.
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!
Citywire.co.uk – To analyse all of Europe’s absolute return funds on a variety ofg risk-return measures and see a comprehensive league table of performance visit our new zone here
The CF KB Endeavour Absolute Return fund slipped into negative territory last September as the fallout from the collapse of Lehman Brothers rippled across several major asset classes.
The fund suffered its highest drawdown to date, shedding -16.75%, which effectively wiped out all of the gains it had made since launch in July 2006, and then some.
Professional Pensions – European schemes are increasing their allocation to non-traditional asset classes in a bid to manage their risks more effectively, Mercer says.
The consultant’s European Asset Allocation Survey – which polled around 1000 schemes from 11 countries – found 35% of UK schemes and 60% of European schemes (excluding the UK) expected to introduce new investment classes into their portfolio to help manage future investment risk.
Mercer investment consulting European head Tom Geraghty said: "Despite being innately diverse in history, culture and regulatory requirements, European pension funds have all felt the effect of the last year’s market turmoil.
Reuters – The UK’s largest pension scheme, the BT Pension Scheme (BTPS) could invest up to 20 percent of its assets in alternative asset classes including hedge funds, a senior executive in charge of its investments said.
Frank Naylor, head of investments at Hermes Pensions Management, told Reuters the pension fund had also reallocated $1.2 billion to two new fund of hedge funds (FOHFs) launched by its hedge fund boutique Hermes BPK.
West Palm Beach (HedgeCo.net) – Investment management company Legg Mason Inc. has launched a global multi-asset tactical allocation mutual fund named Legg Mason Permal Tactical Allocation Fund. The fund, which targets institutional and retail taxable and tax-exempt investors, will be managed by Legg Mason’s fund-of-hedge-funds affiliate, Permal Asset Management.
Legg Mason said that the fund is an opportunistic and diversified product, which seeks to benefit from any market condition and to outperform a traditional 60/30/10 (equity/fixed income/cash) portfolio over a medium-term time frame.
"Permal has an expertise in asset allocation and a deep global perspective and we believe they can find opportunities in these markets to deliver value to our clients." Matt Schiffman, Head of Americas Retail at Legg Mason said, "This is an innovative way to bring their fund of hedge fund expertise to traditional asset classes in a mutual fund offering."
The asset allocation strategy is designed to exploit perceived inefficiencies or imbalances in equity, fixed-income or other asset classes in any region or country, said the Baltimore, Maryland-based mutual fund group.
The fund will invest primarily in both passive and actively managed investment funds, to include specifically, affiliated and unaffiliated open-end mutual funds, unaffiliated closed-end mutual funds and exchange traded funds and notes, as well as cash equivalents and alternative investments.
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!
Reuters – India Church Pension Fund has invested in Future Group backed Indivision India, Advantage Partners and IDG Accel China.
The $8 billion Church Pension Fund based in New York City has roped in Eric Mason(ex-Carlyle Group), to open a new Hong Kong office, its first in Asia, reports Dow Jones.
Mason is a former JP Morgan banker and most recently headed Carlyle Group’s Asian leveraged finance team(set-up in 2007 but disbanded in November 2008 after the credit crunch hampered its ability to raise funds). He will look after all asset classes including private equity, real estate and hedge fund investments in the continent, the report said.
New York Daily News – The hedge fund industry has a public relations problem these days and you have to be a millionaire to invest in one anyway, but there’s a new fund for more modest investors that can offer similar benefits.
The IQ Hedge Multi-Strategy Tracker Exchange-Traded Fund doesn’t actually invest in hedge funds, but attempts to replicate their performance.
The fund does this by holding other ETFs that own various asset classes, including stocks, bonds, currencies and commodities.
Adam Patti, CEO of IndexIQ, the company behind the new fund, said it even enjoys some advantages over hedge funds, including the ability to sell on a moment’s notice. Hedge funds typically offer limited times to sell.
NEW YORK, N.Y. – SecondMarket, the largest marketplace for illiquid assets, announced today that it has launched markets for mortgage-backed securities (MBS), whole loans, and collateralized debt obligations (CDO). Through SecondMarket, buyers and sellers are able to trade these assets in a robust, centralized marketplace that provides transparency, price discovery and an extensive network of market participants.
“Today, the multi-trillion-dollar MBS, whole loans and CDO secondary markets are nearly frozen. For the global economy to recover, it is critical to unfreeze these assets from the balance sheets of financial institutions around the world and restart the securitization markets,” said SecondMarket CEO Barry Silbert. “The most effective solution lies in a time-tested model – an organized, independent secondary marketplace that provides transparency and price discovery.”
Through its online trading and auction platform, proprietary matching algorithm and deep network of relationships, SecondMarket has successfully established itself as a trusted marketplace for a variety of illiquid asset classes since its founding in 2004, including auction-rate securities, bankruptcy claims, limited partnership interests, and restricted securities and blocks in small capitalization companies.
SecondMarket’s trading network includes 2,500 buyers and sellers, hundreds of whom have already expressed an interest in purchasing residential and commercial MBS, CDOs, and portfolios of various whole loans, including residential, commercial, construction, consumer and industrial loans. To date, more than $1 billion in illiquid assets have already been traded over SecondMarket.
Due to the esoteric and opaque nature of many of these assets, pricing is extremely difficult. In an effort to improve investors’ abilities to determine the value of these assets, SecondMarket is providing unparalleled transparency by aggregating data on MBS, whole loans and CDOs and offering it for free to SecondMarket participants. SecondMarket also has established a network of third-party service providers – the SecondMarket Ecosystem – to offer valuation, research, data, analytics, legal and transaction advisory services.
Bill Seidman, former chairman of the FDIC and Resolution Trust Corporation (RTC) and advisor to SecondMarket, endorsed the SecondMarket model. “When we were working with troubled bank assets during the S&L crisis, we were forced to do a lot of work to create a market for these assets,” said Seidman. “Had there been a SecondMarket when I was at the RTC, I would have jumped at using their platform.”
The SecondMarket online marketplace and auction platform is expected to serve as a complementary market to assist the efforts being undertaken to address the legacy asset problem by governments in the U.S. and abroad. “We applaud the federal government’s initial efforts to address the legacy assets and restart the securitization markets,” Silbert said, “and an independent, active secondary marketplace is essential to bolster those efforts.”
SecondMarket is also pleased to announce that it has hired two former Credit Suisse directors to lead its efforts in these asset classes. Elton Wells, previously a Director with Credit Suisse in their Structured Products Group, will head SecondMarket’s MBS and whole loans markets and Adrian Radulescu, formerly a Director with Credit Suisse and Head of the European Leveraged Finance CDO Structuring Desk in London, will head SecondMarket’s CDO market.
“Over the past six months, SecondMarket has been diligently and expeditiously preparing for the launch of these markets by hiring dozens of employees, expanding our technology capabilities and developing key industry relationships,” said Silbert. “We are confident that our efforts will result in transparency, liquidity, a functioning secondary market for the so-called ‘legacy’ assets and, consequently, the restart of the securitization market.”
About SecondMarket
Founded in 2004, New York-based SecondMarket (member FINRA | MSRB | SIPC) is the world’s largest marketplace for illiquid assets, such as auction-rate securities, bankruptcy claims, collateralized debt obligations, residential and commercial mortgage-backed securities, limited partnership interests, restricted securities and blocks in small capitalization companies, and whole loans. SecondMarket has 2,500 participants, including global financial institutions, hedge funds, private equity firms, mutual funds, corporations and other institutional and accredited investors that collectively manage over $500 billion in assets available for investment. For more information, visit www.SecondMarket.com.
KPR Capital Limited announces the launch of the KPR Diamond Fund. The fund offers investors a unique access to physical diamonds capitalising on the price appreciation of top quality colourless diamonds.
The Fund aims to provide returns which are not correlated with traditional asset classes, act as a hedge against inflation and benefit from the supply/demand imbalance over the long term. The fund is part of KPR Fund SPC, a Cayman Islands open-ended investment company.
The investment manager has engaged a team of diamond industry experts that have in-depth knowledge and industry insight of the diamond market.
The fund’s investment adviser is Goldwinds Asset Management Limited, a London based asset management firm.
Giovanni Pennetta, CEO of Goldwinds Asset Management, said:
“The long term outlook for diamonds is robust. We are confident that this fund will provide the means for investors to diversify their portfolio and gain exposure to physical diamonds in a cost-efficient way. We see this as a huge investment opportunity that investors should not miss.”
The fund is open to investors in February and will launch on the 2nd March 2009. The fund has a minimum investment of US$ 250,000. Investors in the fund may benefit from the option to purchase stones on selected diamond sales by the fund at a wholesale price. The Diamond Segregated Portfolio may be offered, sold or transferred directly or indirectly to Non US Taxpayers and US Tax-exempt investors. US Taxpayers may invest in interest of the Partnership, KPR Diamond Fund L.P.
West Palm Beach (HedgeCo.net) - Specialist asset management firm, Silk Invest Ltd, has acquired Danfonds Frontier Fund SPC., a Cayman based hedge fund, in an all equity deal, Silk Invest also bought majority share in Danfonds Frontier Fund SPC, which will be renamed Silk Invest Frontier Fund SPC, Danfonds Investment Management (Cayman) Limited will be renamed Silk Invest (Cayman) Limited.
The new team will launch two Luxembourg UCITS funds, African Lions and Arab Falcons, in the first quarter of 2009. The Silk Invest Frontier Fund SPC will be relaunched in the second quarter of 2009 after finalizing the new offering memorandum and the various counterparty agreements.
Zin Bekkali, CEO of Silk Invest, comments that “the deal is a uniquely structured combination of talents that complements our new African and Middle Eastern fund platform.” Following the transaction, Daniel Broby, CEO of Danfonds, will become the Chief Investment Officer of Silk Invest.
Daniel Broby says that the deal “is perfectly timed from an investor perspective. There is now immense opportunity in frontier markets as a resultof the dramatic declines caused by the credit crisis; to which these economies are partially immune.”
Dr Heinz Hockmann, the Chairman of Silk Invest, notes that “The synergies between the Silk African Lions Fund, the Silk Arab Falcons Fund and the Danfonds Frontier Fund were immediately obvious. Our aim was always to become the most credible frontier markets specialist. With this deal we can demonstrate to our investors, more than ever, that we have an unrivalled frontier markets team, managing a unique investment offering across different asset classes.”
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) – Venus Capital Management, Inc. has launched the Venus Index Plus Fund. The general objective of the Fund is to outperform the S&P CNX Nifty India Index without changing the weights in the Index.
Venus Capital, after conducting a detailed analysis of India-dedicated hedge funds, found that most India funds, both inside and outside of India, underperformed the S&P CNX Nifty India index on a risk-adjusted basis. They have high Beta with a low Sharpe ratio. This became even more evident this year when the Indian markets dropped approximately 40% and a typical India fund lost 40-55% in the first six months of the year. Venus has segregated Alpha from Beta and has products for investors seeking either. However, Venus feels that “2 and 20” fees should not be paid to obtain Beta and hence, have launched the flat fee Index fund.
The Index fund is engineered to track and outperform the benchmark Indian Index without changing the weights of the Index constituents. It will be available in unlevered, 1x, 2x levered and short versions with daily liquidity, enabling institutional investors to time the market and take advantage of their macro views and also use as a hedge against exposure to long biased India managers.
Venus Capital expects this product to outperform the S&P CNX Nifty India index since the S&P CNX Nifty India Index futures typically roll at a discount to fair value of the underlying S&P CNX Nifty India index on a monthly basis and the left over cash (as futures require only 25% margin) can be deployed in short-term instruments.
The fund offers beta exposure to one of the fastest growing economies, in a cost efficient manner compared to traditional mutual funds and hedge funds. “We do not believe investors should pay 2 and 20 fees for Beta” said Vik, CEO of Venus Capital Management, Inc. Venus Capital has been in business since 1994 and is the oldest India-focused hedge fund company. The founder and CEO, Vik Mehrotra, has over 20 years of investment experience and is assisted by over 20 analysts and traders.
Investors can request a private placement memorandum for the Venus (India) Index Plus Fund by visiting the manager’s website. The fund is open to accredited and qualified investors only and the minimum initial investment amount is $1,000,000.
Venus Capital Management, Inc. was founded in 1994. The company was registered with the Securities & Exchange Commission in the United States as a Registered Investment Advisory company in 2000. The firm manages wealth for several family offices and institutions with an emphasis on increased allocations to Asia in a risk averse manner.
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!
