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.
West Palm Beach (HedgeCo.net) – Due to poor market conditions in the distressed securities space, Dow Jones’s hedge fund arm has suspended publication of the Dow Jones Hedge Fund Distressed Securities Strategy Benchmark.
The Dow Jones Hedge Fund Convertible Arbitrage Strategy Benchmark was also halted in January, 2009 and remains suspended until further notice. The remaining strategies—Equity Long/Short, Equity Market Neutral, Event Driven and Merger Arbitrage, will continue to be published on an end-of-day basis.
Launched in November 2003, the Dow Jones Hedge Fund Strategy Benchmarks measure individual hedge fund strategies. The six existing strategies are Equity Market Neutral, Convertible Arbitrage (suspended), Distressed Securities (suspended), Merger Arbitrage, Event Driven and Equity Long/Short . DJHFI provides style-pure, hedge fund strategy indexes that exhibit highly correlated component returns.
Alex Akesson
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West Palm Beach (HedgeCo.net) – Hedge fund manager Ansher Fund Management says that March has been positive all across the markets and AREF (Ansher Regional Equity Fund) was able to gain to gain 3.2%.
The hedge fund manager increased holdings in Kazakhstan and Kyrgyzstan as together with Uzbekistan, Ansher believes that these will be the strongest performers in the region. Regarding risk exposure, "we like it as is, given the high diversification on both, sector and position level, shields us from extreme market moves," Pascal Buschor, Executive Director at Ansher, said.
Benchmarks have performed positive because of the increase in oil & gas and metals prices in March, giving investors some level of comfort in the markets, the fund says.
The economy of Uzbekistan has also shown resilience against the effects of global liquidity crisis. The implementation of the anti-crisis program measures has started in Uzbekistan, and the results of consequent two months showed the program is producing its first satisfactory results, the fund says.
Kazakhstan’s government has further demonstrated strong political will to support the economy by adopting the national anti crisis program. Government plans to inject some $14 billion.
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West Palm Beach (HedgeCo.net) – March was a challenging month for hedge funds, which entered the month with tight net exposures, according to research by hedge fund consultant Hennessee LLC.
Technology and healthcare/biotech were bright spots for hedge funds, as these sectors were relative outperformers. While the strong equity rally did cause short squeezes, most hedge fund managers expect short portfolios to generate profits in the near term.
The Hennessee Hedge Fund Index advanced +1.37% in March (+1.09% YTD), while the S&P 500 advanced +8.54% (-11.67% YTD).
“Most funds were caught with tight net exposures and were unable to participate in the rally," Charles Gradante, Co-Founder of Hennessee Group said, "Managers were also hurt as the sectors they have been heavily short, such as financials, consumer discretionary and materials, were the sectors that rallied the strongest.”
“Despite the underperformance in March relative to the equity benchmarks, hedge funds are still outperforming for the year,” said Lee Hennessee , Managing Principal of Hennessee Group. “We expect that we will continue to see volatility throughout the year.”
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Cornell Daily Sun – In the midst of the country’s economic recession, the Johnson Graduate School of Management’s Cayuga Fund, a hedge fund run by faculty and students, reported a 0.42 percent gain for the 2008 business year.
Although the fund’s investments decreased by 1.29 percent in the fourth quarter, this $12 million hedge fund, finished the year ahead, especially relative to the performance of its benchmarks. Indexes like Hedge Fund Research Equity Hedge Index and the Hedge Fund Research Equity Market Neutral Index reported 25.45 percent and 1.16 percent losses, respectively, in 2008.
Investment Week – Castlestone Management is set to launch a hybrid fund investing in both equities and hedge funds.
The group claims managed futures have maintained decent returns throughout the market turmoil and predict the asset class will work well in tandem with equities, which have yet to see a turnaround.
Managed futures use trading processes to access the global futures markets.
Castlestone is currently testing the market appetite for the Defensive Equity fund, with a view to launching the vehicle at the end of January.
West Palm Beach (HedgeCo.net) – The Energy Hedge Fund Center (EHFC) announced that it has added a ‘green’ hedge fund directory to its product inventory. EHFC’s Directory of Energy Hedge Funds was launched four years ago, but with the interest in ‘green’ hedge funds, the company has created a new green directory for investors. The directory includes carbon, renewable, cleantech, forestry, water and weather derivative funds.
"We decided that now was the time for a standalone green directory and will be offering it for prepublication in January 2009," said Peter Fusaro, co-principal of the EHFC. "The market is now large enough and growing to warrant this service with over 100 green hedge funds."
"EHFC has received innumerable requests for such a product this last 12-months or so as investor appetite for environmental and alternative energy has increased," reports Dr. Gary M. Vasey, Co-Principal, EHFC. "As a result we have complied with that demand and have now added a new directory that focuses on just the ‘green’ hedge funds."
Alex Akesson
Editor for 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!
Reuters – Clients of Spain’s BBVA Patrimonios have cut hedge fund exposure by more than two-thirds over the past year after disappointing returns, says its chief investment officer, who believes the industry is in meltdown.
"Appetite for hedge funds has diminished dramatically," Enrique Marazuela told the Reuters Wealth Management Summit, adding that hedge funds had not met his clients’ return and risk expectations.
"The idea customers had about hedge funds was that they were going to have absolute returns and hedge funds controlled the risks."
However, hedge fund returns have disappointed many investors this year in high market volatility.
Hedge Fund Research’s HFRI index fell 4.68 percent in September, its second worst month after August 1998′s 8.7 percent drop, taking the year-to-date loss to 9.41 percent.
Reuters Tokyo – The yen dipped against higher-yielding currencies on Monday while the Australian dollar surged as leaders from Europe to the United States rushed out plans to shore up banks and stem the panic gripping investors.
After many stock markets suffered their worst weekly losses ever last week, leaders from Group of Seven industrialised nations set out a plan of action.
European officials offered to guarantee some bank debt and inject public funds into individual banks if necessary.
The United States said it would take stakes in banks in a first such move since the Great Depression, Australia guaranteed bank deposits and Britain was set to pump more than 40 billion pounds into its four biggest banks.
The flurry of initiatives to contain the worst financial crisis since the 1930s increased investor appetite for risk, though analysts were uncertain whether the improving mood would last very long.
MarketWatch – For the first time in 17 months, hedge funds in July made more bets on oil prices falling than rising, according to the latest government data.
Short positions from noncommercial investors, hedge funds and other large investors that don’t actually take delivery of oil, surpassed long positions in July for the first month since February 2007, data from the U.S. Commodity Futures Trading Commission showed. Short positions are bets on falling prices while long positions bet on rising prices.
"We are seeing a significant retrenchment of bullish appetite among funds," said Edward Meir, an analyst at futures brokerage MF Global. "The price bias still favors the downside."
Reuters Singapore – Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed.
Asia-focused hedge funds received a net $530 million (268 million pounds) from investors in the April-June quarter, down from $1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.
Asian hedge funds grew by approximately $200 million to $100.48 billion, up just 0.25 percent from the first quarter, as inflows were mostly offset by a decline of nearly $320 million due to poor performance.
Times Online – The esteem of John Waples for the hedge funds (“Get used to volatility: the hedgies are in control”, last week) was not very sound financial journalism.
Who else but these grossly leveraged entities would have the capital or the appetite for the short-selling that we have seen during the course of this economic turmoil?
Waples should turn his investigative attention to our so-called regulators who, with every conceivable avenue of inspection available to them, have failed to track down the City insider traders who have made millions from this financial system.
Reuters – Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed.
Asia-focused hedge funds received a net $530 million from investors in the April-June quarter, down from $1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.
Asian hedge funds grew by approximately $200 million to $100.48 billion, up just 0.25 percent from the first quarter, as inflows were mostly offset by a decline of nearly $320 million due to poor performance.
"Asian hedge fund investors reacted to continuing market volatility by adjusting allocations opportunistically to those regional markets that had posted sharp year-to-date losses," said Kenneth Heinz, president of Hedge Fund Research.
