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.
Forbes – Prime brokers are offering hedge funds more credit at a lower cost in a desperate battle for market share, although the biggest hedge funds are reluctant to move away from brokers they consider safe.
With the risk of a bank failing still a key concern, many funds now pick three top brokers from a list of JPMorgan , Goldman Sachs, Credit Suisse, Deutsche Bank or Morgan Stanley.
‘Banks have all lowered their rates and are competing again — at one moment they were pushing hedge funds away, now they’re competing for funds,’ said Oliver Dobbs, chief investment officer of portfolio management at hedge fund firm CQS, talking about convertible arbitrage strategies.
The Boston Globe – Hedge funds are having their best year since 1998, yet most fund managers still are well below their peaks before the market’s meltdown last year, industry analysts said.
Hedge fund assets rose 2.5 percent in July, contributing to a 9.9 percent climb over the first seven months of the year, and the best year-to-date results since 1998, Credit Suisse/Tremont Hedge Fund Index said.
Financial Standard – Long/short hedge fund managers increased their net exposure to equity markets, allowing them to post positive returns last month, according to a replication index.
The Credit Suisse Long/Short Equity Replication Index, which replicates the performance of major hedge fund strategies, was up almost 2 per cent (net) in July.
At the same time, the Credit Suisse Global Macro Replication Index crept into positive territory by 3 basis points.
HedgeCo.net (West Palm Beach) – Long/Short Equity hedge funds continued to increase overall net exposures in July, enabling managers to capitalize on market upswings early in the month, according to Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse.
Dr. Drachman noted, ”As risk appetite returns to the market, many Long/Short Equity hedge fund managers have increased their overall net exposures, which enabled them to generate positive returns as equity markets bounced back early in July. Despite mid-month volatility, managers were able to preserve gains to finish up for the month. The Credit Suisse Long/Short Equity Replication Index was up 1.96% (net) for the month, while the Credit Suisse Global Macro Replication Index finished up 0.03% over the same period.”
AIR Indices seek to replicate the performance of major hedge fund strategies and enable investors to gain liquid, transparent insight into the Global Macro and Long/Short Equity sectors of the Credit Suisse/Tremont Hedge Fund Index. The AIR platform also offers inverse indices that seek to approximate short exposure to the aggregate returns of the universe of Long/Short Equity and Global Macro hedge fund managers.
Performances for the AIR Global Macro and Long/Short Equity Indices are calculated daily and shown net of a 1.15% per annum calculation fee.
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Bloomberg – Credit Suisse Group AG, the largest Swiss bank by market value, hired Trevor Randolph from BNP Paribas Securities as a senior sales executive for its fund- linked products unit, a person familiar with the matter said.
Randolph, 36, will be a director and report to Jeff Jaenicke and Walter Rotondo, global head of fund-linked products at the Zurich-based company, said the person, who declined to be identified because the hire hasn’t been announced.
HedgeCo.net (West Palm Beach) – Credit Suisse Tremont Index LLC released a new research piece, 1H 2009 Hedge Fund Update: Halfway There, a review of how hedge funds have repositioned themselves in the first half of 2009 to generate positive returns for five out of the first six months of the year.
The report discusses how hedge funds have generated year-to-date returns of 7.2% through June 30, outperforming, with lower volatility, both key equity and bond indices. Some key takeaways from the report include:
* The Convertible Arbitrage, Emerging Markets, and Global Macro sectors have received increased attention as investors began to regain their appetite for risk and global markets rallied.
* Performance has improved across most sectors, with the bulk of returns for many strategies moving into positive territory for the year, with 80% of all funds reporting positive returns for the second quarter.
* Overall industry assets under management have dropped approximately $18 billion since the end of the first quarter of 2009; we estimate industry assets totaled $1.3 trillion as of June 30 – down from $1.5 trillion at the end of 2008.
* As of June 30, 2009, an estimated 9.6% of funds were classified as impaired, meaning they have either suspended redemptions, imposed gate provisions or sidepocketed assets.
Credit Suisse is comprised of a number of legal entities around the world and is headquartered in Zurich. The registered shares of Credit Suisse’s parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares, in New York.
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HedgeCo.net (West Palm Beach) – Six months after their worst drawdown on record, hedge funds appear to be demonstrating stronger performance than in some previous recovery periods, such as during the Asian Currency Crisis and the Tech Bubble Burst events.
On average, it has taken hedge funds 13 months to recover from these market disruptions accordind to research peice by Credit Suisse Tremont Index LLC, the research reviews of how hedge funds have repositioned themselves in the first half of 2009 to generate positive returns for five out of the first six months of the year.
The report discusses how hedge funds, as measured by the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”), have generated year-to-date returns of 7.2% through June 30, outperforming, with lower volatility, both key equity and bond indices. Some key takeaways from the report include:
The Convertible Arbitrage, Emerging Markets, and Global Macro sectors have received increased attention as investors began to regain their appetite for risk and global markets rallied.
Performance has improved across most sectors, with the bulk of returns for many strategies moving into positive territory for the year, with 80% of all funds reporting positive returns for the second quarter.
Overall industry assets under management have dropped approximately $18 billion since the end of the first quarter of 2009; we estimate industry assets totaled $1.3 trillion as of June 30 – down from $1.5 trillion at the end of 2008.
As of June 30, 2009, an estimated 9.6% of funds were classified as impaired, meaning they have either suspended redemptions, imposed gate provisions or sidepocketed assets.
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!
HedgeCo.net (West Palm Beach) – Long/Short Equity managers who maintained a cautious stance through the recent market run-up appeared to be positioned to profit as markets shifted from cyclicals to defensives in June. Overall, the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) finished up 0.43% for June, bringing year to date to 7.18%.
Convertible Arbitrage funds continued to post the best performance of all the strategies in the Broad Index, with 4.05% for June and 23.95% cumulative performance YTD, Credit Suisse/Tremont Index’s monthly commentary reported. As equity markets’ recovered in the second quarter, managers began to profit again from the volatility arbitrage aspect of the strategy.
Overall, Emerging Markets finished the month relatively flat despite a rebound in economic activity in Asia, as countries across the region saw rising industrial and manufacturing output, the Index reported.
Credit-oriented hedge funds performed well as credit markets showed healthy activity, with $102 billion of investment grade bonds brought to the market in June. Many believe continued governments’ activism in the markets could provide additional opportunities for these managers.
Global Macro hedge funds posted their first negative monthly performance since October 2008 as the sell-off of short rates in US Treasuries negatively impacted the positions of a number of Global Macro hedge funds early in the month, Credit Suisse/Tremont said.
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Bloomberg – John Meriwether, who roiled global markets when Long-Term Capital Management LP collapsed in 1998, plans to shut his current hedge fund, according to a person familiar with the matter.
JWM Partners LLC is closing its main Relative Value Opportunity II fund after losing 44 percent from September 2007 to February 2009. Meriwether, credited with generating billions of dollars of revenue at the former Salomon Brothers in the 1980s through so-called relative value trades, returned an average of 1.46 percent a year with his new fund since opening in 1999, compared with 2.4 percent for the Credit Suisse/Tremont Hedge Fixed-Income Arbitrage Index.
West Palm Beach (HedgeCo.net) – “Hedge funds finished up 4.06% in May, capturing the largest monthly gains since February 2000." Oliver Schupp, President of Credit Suisse Index, said, Emerging Markets funds were the strongest performers, finishing up 6.96%. The Emerging Markets sector has experienced a significant turnaround over the last three months as risk appetite seems to be returning to markets, and investors are encouraged by positive signs of global growth and rising commodities prices.” Schupp added, “Convertible Arbitrage managers also performed well during May as funds capitalized on the overall appreciation in convertible bonds globally. The Convertible Arbitrage sector has been up every month this year, and redemption pressure seems to have eased substantially as a result.”
The Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) is the industry’s premier asset-weighted hedge fund index. Unlike equal-weighted indices, the Broad Index does not underweight top performers and overweight decliners to provide the most accurate representation of the hedge fund universe.
Alex Akesson
Edtior for HedgeCo.Net Email: alex@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!
West Palm Beach (HedgeCo.net) – Financial technology vendor youDevise Limited congratulated its client Northern Trust upon being awarded the Fund of Hedge Funds Administrator of the Year award at the inaugural HFMWeek Service Provider Awards, held recently in London.
Northern Trust is a leading, global administrator of FoHFs with approximately US$50 billion of hedge funds under administration at March 31, 2009. Northern Trust employs youDevise’s Hedge Fund Information Provider (HIP) online portfolio management system, which enables Northern Trust’s fund of hedge funds (FoHF) clients to track daily position information and other vital data.
“The award recognised Northern Trust for outperforming its peers during 2008-2009 and demonstrating financial progress, growth and genuine innovation,” said Richard Koppel, Managing Director of youDevise and an expert in FoHF technology who co-developed the HIP. “We are proud to see our client recognized for this achievement. Northern Trust was the first fund of hedge funds administrator to integrate our technology into its platform, and, in so doing, significantly advance its clients’ ability to access more timely and accurate management information, while, at the same time, eliminating the need for error prone spreadsheets to track positions.”
Mr. Koppel noted this is the second time over the last few years that clients have won major industry recognition due, in large part, to their deployment of youDevise technology. In 2006, Trade Ideas Limited (TIL) was named overall winner of the Innovation of the Year category in The Banker magazine’s Technology Awards for TIL’s trade idea platform, employing youDevise’s Trade Idea Monitor (the TIM). Trade Ideas Limited is an industry consortium owned by Citigroup, Credit Suisse, Dresdner Kleinwort, and Merrill Lynch.
The TIM enables more than 300 institutional brokerage firms around the world to send long/short equity trading ideas to more than 100 hedge funds and traditional asset managers, which in turn use the TIM to determine payments for the top-performing ideas they receive. The TIM’s “ideabase” is the foundation of TIM Insight, a more useful short-to-mid term indicator of market direction than traditional consensus earnings estimates.
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Reuters Hong Kong – Credit Suisse on Wednesday said a top UBS AG prime brokerage banker will join the bank as head of prime services for Asia-Pacific, based in Hong Kong.
Since 2007, Matt Pecot was the Americas head of prime brokerage services for UBS, having held a similar Asia-Pacific role with UBS from 2004 and 2007.
Credit Suisse, under less financial pressure than rival UBS, is in a position in Asia and elsewhere to poach top bankers from its peers.
