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.
Telegraph – A single investor – thought to be a hedge fund – is sitting on thousands of tonnes of tin in warehouses across London. According to traders almost the entire stocks of tin on the London Metals Exchange (LME) was bought up by a single, mysterious investor, last week.
One fund has warrants for more than 90pc of all physical tin stocks because the market rules dictate that above this threshold, the buyer must lend out the commodity, if asked, at the cash price with no premium.
Industrial buyers are furious that they are paying up to $730 per tonne for immediate delivery more than it would cost them to buy three-month futures contracts, arguing this stranglehold on the market should not be allowed to happen.
The New York Times – Threadneedle Asset Management is seeking to increase its commodity fund to as much as $1 billion in the next two years, Bloomberg News reported.
The London-based hedge fund, which oversees assets of $79.6 billion, is targeting a return of up to 15 percent this year from its Threadneedle Commodities Crescendo Fund, manager David Donora told Bloomberg News. The $22 million fund returned 5 percent to July 27, he said.
Bloomberg – A hedge fund, whose name isn’t disclosed, has placed a large bet that natural gas prices will triple by the Northern Hemisphere winter just as the price of the commodity slides to a seven-year low, the Financial Times reported, which cited New York Mercantile Exchange traders.
Last week, the fund spent millions for the right to buy U.S. natural gas at $10 per million British thermal units in January and February, up from yesterday’s spot level of just above $3 per mBtu, according to the report.
Commodity Online – A prominent hedge fund manager has claimed that gold investment is proving popular in the US over fears about inflation.
Moonraker, a London-based independent firm, has managed over $330 million worth of assets at BDO Stoy Hayward Investment Management since September 2003.
The company carried out a survey of 22 US hedge fund managers and found that 20 have bought gold bullion because they expect quantitative easing to push prices higher.
Commodity Online – Gold prices had an excellent run last week, led by the extensive fall in the US dollar and strong rally in the equity markets. The rise in crude oil prices also resulted in lifting bullion.
The US currency showcased the biggest decline in a month against euro last week as US data showed that the world’s largest economy contracted lesser than forecasts, which hinted that the recession is fading and gave rise to investor demand in riskier counters such as commodities and equities.
The outlook is bright – the most active benchmark contract at the Comex has pulled off a strong recovery, ending at $953.70 near the resistance at $960, a break and close of which will take prices towards new highs of $966.70/oz and $970.40/oz, state traders.
Commodity Online – Agoracom market analyst Peter Grandich, who isn’t among those who expect the world at large to emerge from “this absolutely horrific downturn” by year-end, instead sees good opportunities on the horizon for investors who want to “buy things on the cheap” because prices will fall in the equity markets.
He also sees bright prospects for gold—particularly gold ETFs and mining companies that are in or near production and have potential for developing additional deposits. At the same time, Peter tells The Gold Report that the “severely wounded” U.S. economy should anticipate rougher and tougher times.
Bloomberg – Stanley Ku, former head of Fortress Investment Group LLC’s Hong Kong office, plans to start an Asia- focused hedge fund to profit from macroeconomic developments, according to a marketing document given to potential investors.
Minerva Macro Fund, to be managed by Hong Kong-based Ku, will start investing in early August, two people with knowledge of the plan said. It seeks to generate annual returns of 12 percent to 22 percent trading stocks, interest rate, currency and commodity instruments in large and liquid markets, according to the document, obtained by Bloomberg.
Reuters – Mellon Capital Management, which invests money for pension funds and others, plans to launch a new hedge fund in August, a top executive said on Tuesday.
The new portfolio, which is slated to become the group’s flagship hedge fund offering, will invest in currencies, commodities, stocks, bonds and derivatives.
"This will be the first time that Mellon Capital will offer clients a commodity alpha source," said Eric Goodbar, the firm’s hedge fund strategist.
Bloomberg – Commoditrade Inc. plans to introduce an energy hedge fund in the fourth quarter, complementing a fund that invests in industrial metals.
The new fund will use the relative-value strategy followed by the metals fund, Chief Executive Officer David Phipps said yesterday in a phone interview. He declined to comment on the performance of the metals fund, the AMCO Commodity Fund, which Georgetown, Grand Cayman-based Commoditrade bought in February.
Commoditrade and competitors are opening energy funds as oil futures listed in New York rebound from the worst slump ever. Galena Asset Management Ltd. started an energy hedge fund this month that it said may expand to more than $1 billion. Andrew Serotta, who worked for Vitol Group, aims to raise $100 million for an oil hedge fund called Logista Capital.
Opalesque – Last week, we heard of fund launches from Galena (energy); Verulam (commodity); Twin Tree; Paulson & Co (distressed property); Abax (Asia macro); Odey (Ucits III); Pictet (agriculture); and Liontrust (European).
The Canadian Hedge Watch Hedge Fund Composite Index was up 2.26% in April (+4.66% YTD); RBC Hedge 250 Index 2.37%, 2.6% YTD; Morningstar 1000 Hedge Fund Index 3.4% (est.), 3.11% YTD; Lyxor’s investable Global Hedge Fund index -0.45%, 0.93% YTD; Greenwich Global Hedge Fund Index 3.49%, 3.91% YTD; Scotia Capital Canadian Hedge Fund Index -0.61%, 4.98% YTD; And the Eurekahedge April report showed hedge funds were up 3.9% YTD, and that the industry assets were now at $1.30tn.
Seeking Alpha – If at first you don’t succeed, try, try again. This cliché is the root of folly on Wall Street and in the hedge fund industry in general. Perfect example: The Ospraie Fund’s Dwight Anderson is set to start two new hedge funds in July. Okay, new hedge funds, what’s the big deal? Well, the problem here is that Dwight Anderson lost 39% in his Ospraie Fund in 2008 and had to liquidate the fund. At its peak, Ospraie managed $3.8 billion in commodities. But if at first you don’t succeed, try, try again. And, that’s exactly what Anderson is set to do.
Anderson will open two new hedge funds in July of 2009, the first of which will focus on stocks of commodity and basic materials companies (The Ospraie Equity Fund). He will also open a fund focused on commodities and derivatives (The Ospraie Commodity Fund). Anderson said that he is starting these funds because he sees significant opportunities in this market, as significant as he has ever seen in his 15 years of investing. These funds will have reduced fees where investors will pay half as much as the typical hedge fund. His new funds will charge a 1% management fee and a 10% performance fee.
Bloomberg – Dwight Anderson, the commodities investor who liquidated his main Ospraie Fund last year after losing 39 percent, is planning a comeback with two new hedge funds set to open July 1.
The Ospraie Equity Fund will buy and sell stocks of commodity and basic-materials companies in industries such as chemicals, mining, paper and natural resources, Anderson said in a May 12 letter to investors. The Ospraie Commodity Fund will invest in commodities and related derivatives, according to the letter, a copy of which was obtained by Bloomberg News.
