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.
Bloomberg – Sparx Group Co., Asia’s biggest hedge-fund manager, plans to start its first global macro fund, adding a strategy that was among the few winners in 2008 when an equities rout led to the only annual loss in its 20-year history.
The fund, which will wager on trends in stocks, bonds and currencies worldwide, will be sold to institutional investors in the next few months as Tokyo-based Sparx expands beyond equity- related offerings, President Shuhei Abe said. He declined to give the fund’s size, saying that and other details are still being worked out.
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.
Alibaba News Channel – Hedge fund firm 36 South said on Monday it had launched a "high risk/high return" fund designed to protect investors’ portfolios against a surge in global inflation. The Excelsior fund will target returns of five times the rate of inflation in the G5 group of economies, if that inflation rate exceeds 5 percent, by buying long-dated out-of-the-money options across assets such as equities, commodities, currencies and interest rates, the firm said in a statement.
However, if the rate of inflation stays below 5 percent then investors could lose all their money, a spokesman said.
"Inflation is the single greatest risk facing the world economy at present," said 36 South director and founder Jerry Haworth.
"Whilst the prevailing view is that a sustained period of significant global inflation is unlikely, investors need to be attuned to this risk and the devastating effect it will have on their portfolio should this scenario come to pass."
Bloomberg – Octagon Capital Management Pte, run by former managers of the Government of Singapore Investment Corp.’s quantitative-investment group, plans to start a fund that seeks to profit from broad economic trends.
Octagon, which uses computer models to pick trades, will raise money “in the near future” for a quantitative macro fund that wagers on currencies, equities, interest rates and commodities in Asia, said Lam Poh Min, 39, co-founder of the Singapore-based hedge-fund firm, in an interview. The firm is looking for a “more opportune time” to start the fund, Lam said yesterday.
Media Monitors Network – "The US Federal Reserve Bank, a private institution, is printing $1 trillion to buy toxic bonds to shore up the economy. Will this work? Perhaps temporarily but most economists predict a sharp decline in the value of the dollar within the next five years. With too many dollars in circulation and a massive debt, the dollar will fall in value vis-à-vis other currencies. The Chinese have already called for a new global reserve currency to replace the dollar as it did to the British pound after the Second World War."
New York Daily News – The hedge fund industry has a public relations problem these days and you have to be a millionaire to invest in one anyway, but there’s a new fund for more modest investors that can offer similar benefits.
The IQ Hedge Multi-Strategy Tracker Exchange-Traded Fund doesn’t actually invest in hedge funds, but attempts to replicate their performance.
The fund does this by holding other ETFs that own various asset classes, including stocks, bonds, currencies and commodities.
Adam Patti, CEO of IndexIQ, the company behind the new fund, said it even enjoys some advantages over hedge funds, including the ability to sell on a moment’s notice. Hedge funds typically offer limited times to sell.
Seeking Alpha – Ken Griffin’s Citadel has plans to roll out a few more funds, even after Citadel’s flagship funds had a rough year in 2008. One will focus on currencies and interest rates, one will focus on stocks, and another will focus on convertible bonds.
Citadel is trying to roll out lower fee funds in an effort to attract more investors. Additionally, it’s hoping to raise $2-5 billion for the Global Macro Fund.
Reuters - U.S. hedge fund Citadel Investment Group LLC plans to roll out several new funds, including one with lower fees that will aim to make money on currencies, interest rates and other trades based on broad economic trends, the Wall Street Journal reported.
The firm hopes to raise $2 billion in coming months and could raise $5 billion for its new Citadel Global Macro Fund Ltd, the paper said citing marketing documents.
The Bulletin – Hedge fund managers on average lost 18.7 percent of their clients’ money in 2008, for the worst performance since at least 1990, according to Hedge Fund Research Inc. Combine the losses with investor redemptions, and total hedge fund assets have been cut almost in half. TrimTabs Investment Research and Barclay Hedge Ltd. estimated funds held $1.1 trillion at the end of the year, down from $1.9 trillion a year earlier.
One rare bright spot: the resilience of global macro fund managers, who wager on currencies, equities, interest rates and commodities based on their fundamental analysis of world economic trends.
The Age – Hedge fund managers on average lost 18.7% of their clients’ money in 2008, for the worst performance since at least 1990, according to Hedge Fund Research Inc.
Combine the losses with investor redemptions, and total hedge fund assets have been cut almost in half. TrimTabs Investment Research and Barclay Hedge estimated funds held $US1.1 trillion ($1.7 trillion) at the end of the year, down from $US1.9 trillion a year earlier.
One rare bright spot: the resilience of global macro fund managers, who wager on currencies, equities, interest rates and commodities based on their fundamental analysis of world economic trends.
The Australian – US stocks fell as another drop in oil prices and a warning from Toyota Motor underscored the unsparing nature of the slowdown.
Toyota forecast an operating loss for the current year, the first in the car maker’s history. The Japanese giant was thought to have developed a watertight strategy that would yield profits through thick and thin, making it the subject of managerial guides like the 2004 book The Toyota Way.
But the spreading recession caught up on Toyota, too, and it blamed a slump in the global automobile market and a sharp appreciation in the Japanese yen against major currencies for a likely loss. American depositary shares of Toyota fell $US3.50, or 5.45 per cent, to $US60.88.
General Motors was by far the weakest stock on the Dow Jones Industrial Average, falling US97 cents, or 22 per cent, to 3.52. Analysts warned that the Government rescue measure may not be enough to keep the car and truck maker out of bankruptcy court.
Reuters – Volatility spread across stock and foreign exchange markets on Tuesday as investors eyed a Federal Reserve meeting expected to cut interest rates and hint at future unorthodox monetary policies to lift the U.S. economy.
European stocks reversed early losses to put in solid gains after better-than-expected euro zone manufacturing data. The dollar firmed against the euro after earlier hitting a two-month low.
Oil was trading below $45 but was supported by expectations that OPEC will agree its largest supply cut ever later in the week.
The Fed is widely expected to cut interest rates to just 0.5 percent or lower. Futures markets are setting a two-thirds possibility of a 75 basis points cut to 0.25 percent.
