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West Palm Beach (HedgeCo.net) – "Alpha" released the results of the 2009 Hedge Fund 100, the magazine’s eighth annual ranking of the world’s biggest single-manager hedge fund firms. Although most hedge fund managers in 2008 couldn’t escape the carnage from what many have called the worst financial crisis since the Great Depression, their industry overall lost less money than did other investors. For their part, the firms in the Hedge Fund 100 managed a combined $1.03 trillion in assets at the beginning of this year, down from the record $1.35 trillion that the world’s 100 largest firms managed at the end of 2007.
Bridgewater Associates leads the Hedge Fund 100 with $38.6 billion in assets under management. The Westport, Connecticut-based firm, which was founded by Raymond Dalio more than 30 years ago, grew by more than $2 billion in assets last year, based on the strength of its Pure Alpha Strategy hedge fund, which was up 8.7 percent in 2008. New York-based JPMorgan — the world’s biggest hedge fund firm a year ago — saw its assets fall 26.4 percent, to $32.9 billion, in large part because of redemptions and poor investment performance at its Highbridge Capital Management group.
Redemptions have been a challenge for most hedge fund firms, even those that managed to deliver positive returns in 2008, as investors have looked to raise cash where they can. In the fourth quarter of last year, hedge funds saw a net outflow of $152 billion, with most of the assets coming out of bigger firms. In recognition of this new reality, "Alpha" changed the methodology for the Hedge Fund 100, using firm and fund asset totals as of January 1, 2009 (in the past the magazine collected December 31 data). To qualify for "Alpha’s" 2009 Hedge Fund 100, a firm needed at least $4 billion in assets under management, compared with the $6.25 billion minimum a year ago.
The ten biggest hedge funds managed a combined $264 billion at the start of 2009, down nearly 12 percent from year-end 2007.
"Alpha’s" Hedge Fund 100 Top 10
Rank Firm Total Capital ($ millions) 1 Bridgewater Associates 38,600 2 JPMorgan Asset Management 32,893 3 Paulson & Co. 29,000 4 D.E. Shaw & Co. 28,600 5 Brevan Howard Asset Management 26,840 6 Man Investments 24,400 7 Och-Ziff Capital Management Group 22,100 8 Soros Fund Management 21,000 9 Goldman Sachs Asset Management 20,585 10 Farallon Capital Management 20,000 10 Renaissance Technologies Corp. 20,000 To view the complete rankings for the Hedge Fund 100, visit www.alphamagazine.com
Reuters – Bridgewater Associates Inc, one of the world’s biggest hedge-fund managers, said on Tuesday it might be interested in participating in the U.S. Treasury’s public-private investment program, calling it a "big transfer of money from the government to the banks and to the buyers."
Bridgewater manages roughly $80 billion in global investments for a wide array of institutional clients, including foreign governments and central banks.
In a letter to clients, Bridgewater said its interest in buying the distressed assets under the terms being offered would depend on the pricing and on "whether we can get over our fears of partnering with the government."
Fortune Magazine - Is the current downturn merely a severe slump, or are we facing a second coming of the Great Depression? That’s the question everyone is asking these days. But Ray Dalio, founder of Bridgewater Associates and manager of what is now the world’s biggest hedge fund, has been preparing to answer it for eight years.
In 2001 he had his investment team build a "depression gauge" into the firm’s computer system, line by line in the code, to adjust the portfolio’s strategy and risk profile if the economy ever entered a massive deleveraging period – the kind of multiyear process that ricocheted through the world economy in the 1930s and that has eviscerated markets periodically through the ages.
New York (HedgeCo.Net) – Hedge fund assets, which were once estimated to reach almost $3 trillion, finished the year at around $1.8 trillion, according to research conducted by London-based HedgeFund Intelligence.
The report contends the fall in assets happened almost entirely in the second half of 2008, as markets took a beating and many hedge funds were forced to close shop. In addition, hedge fund firms that manage $1 billion or more fell from 395 in mid-2008 to 311 at year’s end. Also contributing to the fall was the fact that new fund launches didn’t come close to filling the void left by failed funds. While just 55 new funds were launched last year in the United States with assets of $50 million or more, 200 hedge funds were shut down or liquidated.
Hedge funds as a whole posted their worst year to date in 2008, with the average fund losing about 19 percent, according to data compiled by Chicago-based Hedge Fund Research. The firm also reported hedge funds are already experiencing a better year, with the average fund gaining 0.39 percent in January and falling a mere 0.51 in February, though still outperforming the stock market.
HedgeFund Intelligence predicts that assets may drop another 20 percent or more in the coming months, before leveling off sometime during this year.
According to their data, Bridgewater Associates is the largest hedge fund based on assets under management, with $38.6 billion. Coming in second, JP Morgan manages $32.9 billion, while John Paulson’s Paulson & Co. slid into third place with $29 billion in assets under management.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@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! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Bloomberg – Ray Dalio’s Bridgewater Associates Inc. overtook JPMorgan Chase & Co. to become the biggest U.S. hedge-fund manager, even as the firm lost assets during the industry’s worst year, according to a survey.
Bridgewater, based in Westport, Connecticut, managed $38.6 billion on Jan. 1, down 11 percent from July, according to Absolute Return magazine. New York-based JPMorgan, which owns Highbridge Capital Management LLC, ranked second at $32.9 billion, a decline of 26 percent.
“The bulk of hedge funds were delivering returns that were highly correlated with the market,” said Sharath Sury, chief executive officer of S4 Capital LLC, a Chicago-based firm that advises clients on investing. “So when the markets fell, so did their assets.”
Investment returns dropped an average of 19 percent last year, the most on record, according to data compiled by Chicago- based Hedge Fund Research Inc. Hedge-fund assets shrank to $1.2 trillion at the end of 2008 from the June peak of $1.9 trillion on the market losses and investor withdrawals, according to Morgan Stanley analyst Huw van Steenis in London.
Assets at U.S. hedge funds that managed at least $1 billion each fell 32.3 percent in the second half to $1.1 trillion, according to Absolute Return, which is published by London-based HedgeFund Intelligence Ltd.
Seeking Alpha – If someone was asked to name a fund in the global macro game, undoubtedly Tudor Investment Corp or Moore Capital Management would be among the most frequent responses. The global macro strategy has fared well in the world of hedge funds. Paul Tudor Jones’ Tudor Investment Corp has earned an annualized return of greater than 20% over the span of two decades.
Louis Bacon’s of Moore Capital Management shares the same accolade. And, while they are both down this year, they have fared much better relative to many of their peers and the market indexes in general. Tudor’s flagship fund finds itself -5% for the year, while Moore was -2.9% year-to-date through November as we noted in our November hedge fund performance update.
But, in a never-ending quest for outperformance, Tudor and Bacon want more. And, in order to accomplish that, they see it fit to return to their roots.
guardian.co.uk – Hedge fund investors may face an expensive tug-of-war with managers, according to a new research paper that suggests they could lose as much as 15 percent of their initial investments should they be unable to exit when they want.
Hedge fund investors have rarely been allowed to pull their cash out immediately, but now they are sometimes being told that they may not be able to pull it out at all as the industry faces its worst-ever returns.
Dozens of prominent hedge funds, including Fortress Investment Group LLC and Tudor Investment Corp, have recently restricted redemptions in some of their portfolios.
This trend is not only aggravating but also extremely pricey, Nicolas Bollen, a professor at Vanderbilt University’s Owen Graduate School of Management, said in an interview.
Reuters UK – Hedge fund investors may face an expensive tug-of-war with managers, according to a new research paper that suggests they could lose as much as 15 percent of their initial investments should they be unable to exit when they want.
Hedge fund investors have rarely been allowed to pull their cash out immediately, but now they are sometimes being told that they may not be able to pull it out at all as the industry faces its worst-ever returns.
Dozens of prominent hedge funds, including Fortress Investment Group and Tudor Investment, have recently restricted redemptions in some of their portfolios.
New York Times – Hedge funds are facing many agonies. They are tortured by redemptions. Then there are “high water marks,” another now-troublesome part of their model. They need to fix such flaws if they are to fight another day.
The list of funds blocking investors from withdrawing their money is growing daily. Tudor Investment, the Fortress Investment Group and dozens of others have done so, at least temporarily. The rationale is to protect the fund’s remaining investors, who can be harmed if the fund needs to deplete its cash balance or sell assets at fire-sale prices.
Bloomberg – D.E. Shaw & Co. LP, the investment firm run by David Shaw, and Farallon Capital Management LLC limited withdrawals by clients, joining more than 80 hedge-fund managers to impose restrictions in the past two months.
D.E. Shaw, which oversees $36 billion, capped redemptions from its Composite and Oculus funds, said two people familiar with the New York-based company. Farallon, a $30 billion firm based in San Francisco, did the same with its biggest fund after investors asked to get back more than 25 percent of their money.
The firms are two of the biggest to block withdrawals, known as putting up gates, so they aren’t forced to liquidate investments at distressed prices to raise cash. New York-based Fortress Investment Group LLC said yesterday it froze an $8 billion fund after getting redemption requests for 40 percent of its assets. Tudor Investment Corp., the Greenwich, Connecticut, firm run by Paul Tudor Jones, locked the $10 billion BVI Global fund last week ahead of plans to split the fund into two.
New York (HedgeCo.Net) – Hedge Fund firm Tudor Investment Corp. has suspended investor redemptions from its $10 billion BVI Global unit until March 31st, giving the company time to split the fund into two.
BVI Global was hit by a wave of client redemption requests after investors moved to withdraw 14 percent of their capital, according to a recent letter to investors. The hedge fund posted a loss of about 5 percent this year, while hedge funds as a whole lost an average of 22 percent through November 24th according to Hedge Fund Research Inc.
Tudor Investment Corp., run by Paul Tudor Jones, wants to separate the corporate bonds and loans from emerging markets and start a new fund called Legacy, according to a recent letter to investors. The BVI flagship fund will stick with its staple of stocks, bonds, currencies and commodities.
The company is asking clients to approve the split within the next two months. Capital would be placed into both the BVI Global Fund and the Legacy Fund, depending on the division of assets.
Tudor Investment Corp. manages approximately $17 billion. Jones’ Tudor Futures Fund has posted gains of 21 percent this year while the firm’s Tensor Fund Ltd has seen returns of about 34 percent, according to people familiar with the matter.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
West Palm Beach (HedgeCo.net) – One of the world’s largest hedge funds has temporarily halted redemptions according to reports. Tudor Investment Corp’s flagship portfolio, has been reported to have halted redemptions so they can segregate difficult-to-sell assets in the fund from those they can offload more easily.
Bloomberg reports that the move was made by the the fund to avoid having to raise cash in falling markets to pay out withdrawing investors. Tudor Investment Corp, the hedge fund manager established by Paul Tudor Jones, was also reported by Bloomberg as having temporarily suspended redemptions from the portfolio.
Tudor is reportedly allotting to the investors in Tudor BVI Global shares in Legacy, with a view to selling the assets in Legacy over time to hand money back to those clients.
Founded in 1980 by Paul Tudor Jones II, the firm currently manages $15.4 billion. The firm’s investment strategies include global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems.
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!
