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.
CNN Money – Hedge fund firm Och-Ziff Capital Management Group reported a wider second-quarter net loss Tuesday and lower-than-expected distributable earnings, a number analysts look at closely.
The New York-based firm, one of only a small number of publicly traded hedge fund firms, said its net loss grew to $88.3 million, or $1.15 per diluted Class A share because it earned less in management fees as assets under management shrunk. A year ago, Och-Ziff earned $60.8 million, or 82 cents per share.
CNN Money – John Costas, who helped make UBS AG into one of the world’s biggest investment banks, wants to build a lasting Wall Street player — and put the 2007 demise of hedge fund Dillon Read Capital Management behind him.
Costas and long-time partner Michael Hutchins have launched The PrinceRidge Group, a boutique broker-dealer that is, for now, focused on trading mortgage and corporate debt.
Over time, though, he intends to expand into a mid-size investment bank, seizing "unprecedented" opportunities created by the shake-up on Wall Street.
CNN Money – Money managers must offer new portfolios and keep cutting costs to survive in an era where frightened investors prefer safer fixed-income funds to stock and hedge funds, a report released Monday showed.
Badly bruised by last year’s financial crisis when tumbling markets and investor redemptions shrank global assets 18 percent to $48.6 trillion, asset managers face more tough times in 2009 and the years ahead, The Boston Consulting Group wrote in its seventh annual asset management industry survey.
Profits will shrivel again, likely falling to 30 percent or less this year from 34 percent at the end of 2008 and 38 percent at the end of 2007, the consultants forecast.
CNN Money – AQR Capital Management LLC, among the world’s largest hedge fund managers, will introduce another hedge fund-style mutual fund next month, as it expands its reach beyond the biggest investors.
Greenwich, Connecticut-based AQR, a $20 billion firm led by former Goldman Sachs Group Inc star Cliff Asness, led a new wave of hedge funds marketing to the masses when it launched the AQR Diversified Arbitrage Fund in January.
"We, in about two weeks, expect to introduce a whole new series of style exposures for retail investors," AQR co-founder David Kabiller told Reuters in a rare interview.
CNN Money – They pray for recessions and smile a little wider when a company climbs onto its death bed.
Welcome to the world of distressed, or so-called "vulture" investors, an often-ignored corner of the market that has increasingly taken center stage as more businesses slip into bankruptcy or look to shed assets.
There has been no shortage of corporate ruin lately. Lehman Brothers, which sent a shockwave across the financial system. Outside of the banking sector, electronics retailer Circuit City and media giant Tribune Co both filed for bankruptcy.
CNN Money – They are finally getting more serious on regulation. But success will hinge on delivery, not just detail.
The G20 summit in London will adopt a more detailed approach to overhauling the world’s financial rules in a bid to avert a rerun of the credit crunch that has floored economies.
Last November the G20 couched regulatory reform in general terms and Thursday’s summit will inject some much-needed detail in a bid to quell criticism from Germany and France.
CNN Money – For years, U.S. hedge fund managers have worried that their loosely regulated and secretive industry would one day face tougher regulations.
Now that day seems to be here.
"It was inevitable that this would happen," said Brad Alford, founder of Alpha Capital Management, an advisory firm that invests in hedge funds. "From the time Congress had the industry’s top hedge fund managers testify late last year, we knew something was coming."
CNN Money – Citadel Investment Group’s main hedge fund lost 53% for 2008, according to a person familiar with Citadel’s preliminary estimates.
The $10 billion Kensington and Wellington funds lost about 9% during the first 24 days of December, punctuating the toughest year yet for Citadel founder Ken Griffin. That came after a 13% loss in November. In 2007, the fund was up 30%.
A bright spot this year was Citadel’s $3 billion market-making family of funds, which ended 2008 up about 43%, according to preliminary estimates.
Citadel has weathered the downturn better than some fund managers thanks to its financial flexibility and its size, at a time when the industry is contracting and many smaller funds are forced to close down.
