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New York (HedgeCo.net) – Gulfmena Investments Limited has launched the first directional absolute return hedge fund focusing specifically on the MENA equity markets to be managed by a GCC based and DFSA regulated asset management business.
The asset manager of the fund, Gulfmena Alternative Investments Limited, was granted a license by the Dubai Financial Services Authority (DFSA) to operate as a DIFC asset management company in August 2009 and is headed by CEO and Fund Manager, Haissam Arabi. Arabi is one of the region’s most respected and prominent fund managers having managed SHUAA Capital’s Arab Gateway Fund from March 2001 to June 2008 and headed its asset management division.
“Today, investor appetite is returning gradually as we can see from recent markets performance, but while everyone would like to take advantage of the recovery story and existing price distortions in the short term, investors remain somewhat sceptical over long term prospects. Therefore risk aversion and liquidity remain high priorities when making investment decisions at least until risk appetite returns and when investors will demand higher risk and relative value type products. This is why a debut flagship fund today should be a conservative hedge fund product, which is absolute return, unconstrained, multi faceted that is designed for both today and tomorrow’s MENA markets. We believe it is the ideal product at the ideal time with the ideal strategy.” commented Haissam Arabi, CEO and fund manager of Gulfmena Alternative Investments Limited.
The fund will adhere to stringent risk management and portfolio construction parameters such as stops and rolling stops in addition to an overlay hedge strategy that is designed to minimise volatility aiming at preserving investment capital during all market conditions. This is particularly important to professional investors during the early days of a market recovery when visibility is still not clear and there remains little appetite for risk. The fund will target annual returns in excess of 15% while it aims not to exceed an annual volatility of 7%. The fund will also observe strict liquidity criteria and capacity over-ride rules which are built into the strategy to ensure high liquidity levels that allow it to be open-ended and to offer weekly liquidity, unique to most hedge funds.
The fund’s operator and sponsor is Gulfmena Investments Limited (Cayman Islands). The Gulfmena Arab Opportunities Fund Limited will be registered as a regulated mutual fund with the Cayman Islands Monetary Authority and is managed by Gulfmena Alternative Investments Limited, a DIFC based MENA specialist asset management company that is regulated by the Dubai Financial Services Authority (DFSA).
HedgeCo.net (West Palm Beach) – International hedge fund manager and Swiss banking group, SYZ & CO, has acquired 50% of the asset management company owned by Spanish alternative investment group N+1.
The joint venture, named “N+1 SYZ Gestión”, will provide asset management services to high level clients in Spain, providing discretionary or advisory mandates for large family groups or institutional clients, as well as for investment funds and funds of hedge funds.
“As has been the case in Italy, we have preferred entering into a partnership with a solid and well-established local partner. This enables us to provide offerings that are adapted to the specific nature of the local market”, said Alfredo Piacentini, Managing Partner at Banque SYZ & CO. “We are particularly satisfied with our partnership with N+1, a group we have known for many years, and with which we share the same vision and values.”
“The Spanish asset management market is in the midst of dramatic change and today there is real demand for high level international asset management expertise; our alliance with SYZ & CO will enable us to successfully meet this demand”, said Santiago Eguidazu, N+1′s President. “SYZ & CO enjoys a strong reputation in the Spanish market and there are strong synergies between our two asset management groups.”
N+1 Group company currently has approximately CHF 400million ($353 million) in assets under management. The transaction is subject to approval by the CNMV, the Spanish financial markets regulatory authority.
SYZ & CO’s total assets under management now exceed CHF 20bn ($18.6 billion).
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Bloomberg – Fion Ye, who led the Pinpoint Rising China Fund to a 70.9 percent gain last year, has started a new asset management company aiming to profit from the country’s growing sway over global commodity markets.
Ye and former Pinpoint Investor Advisor Ltd. Chief Executive Officer Alex Li are setting up the Hong Kong head office for Everest Investment Advisors Ltd. Their first fund began investment on May 4 with initial capital of about $45 million, 60 percent of which came from outside investors, Li said in an interview yesterday.
AllAboutAlpha.com – The Bank for International Settlements in Basel, Switzerland was probably abuzz last week watching history unfold before its eyes. After all, one of the lynchpins of the organization’s Basel II Accord was the requirement for banks to mark-to-market all assets – including less liquid ones. And it appears that doing so in a leveraged environment has put several banks into a death spiral in recent weeks (see featured post below).
But the BIS is also keeping an eye on hedge fund leverage. The organization just released a working paper called “Estimating Hedge Fund Leverage” that proposes a new method of calculating the level of leverage used by hedge funds and, it is hoped, a way to measure any resulting systemic risks to the financial system. Regular readers may remember that this topic was also covered by the Fed’s Tobias Adrian last year.
As the authors of this report point out, leverage comes in two basic forms: funding leverage – where you literally borrow money to goose returns (or losses) and instrument leverage - where the securities themselves have leverage baked in (such as a futures contract, option or swap). But at the end of the day, if a fund rises twice as much as the market on “up” days and falls twice as much on “down” days, then the source of leverage is less relevant. In fact, divining leverage based on historical returns will also capture the leverage implicit in the balance sheets or business models of individual securities.
