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.
Alibaba News Channel – Aggressive government action can hurt the market, but regulators should clamp down on leverage among banks and investors to prevent another credit crisis, veteran hedge fund manager Paul Singer said at a conference.
Singer said the current "anti-capitalist" fervor, inspired by last year’s market meltdown and the ongoing recession, will likely lead to increased regulation. These measures would only prolong the problem, he told some 1,200 hedge fund executives at the Ira Sohn Investment Research Conference on Wednesday.
By the same token, he observed that highly regulated banks fueled last year’s market implosion because they ramped up their use of leverage, or borrowed money, for trading and investments. High levels of leverage in a downturn can multiply losses and throw markets into chaos.
The Ledger – Anxiously assembled at the most perilous moment for the global economy since the Great Depression, the world’s financial powers pledged more than $1 trillion Thursday for emergency loans to combat spreading chaos. But they rebuffed President Barack Obama’s bid for new stimulus spending and made no guarantees of success.
"This was the day the world came together to fight back against global recession," declared British Prime Minister Gordon Brown, the summit host, as he led a choreographed show of unity designed to boost confidence in homes and boardrooms everywhere. "This is just the beginning," added Obama.
No one promised an immediate impact, and all agreed much remained to be done.
Financial-Planning.com – Many alternative asset managers, who brag about their ability to make money regardless of market conditions, posted their worst figures in years last month after worldwide sentiment suddenly changed on energy prices, financial stock and the U.S. dollar.
The hedge fund with the biggest loss is SRM, the Monaco-based group that took a huge gamble on Northern Rock last year. When Northern Rock was nationalized, the group lost approximately 85% of its investors’ money, according to The Wall Street Journal.
Many hedge funds were placing huge bets that energy prices and mining stocks would continue to soar and financials would continue to fall, but when that trend reversed last month, they took a major beating.
"There was a tendency for funds that did well in June to do badly in July," Christopher Fawcett, head of Fauchier Partners, told The Times.
