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Reuters – Dow Jones futures dipped 0.1 percent, S&P 500 futures were down 0.01 percent while Nasdaq futures traded 0.02 percent higher on Monday morning at 4:45 a.m. EDT, pointing to a flat opening for Wall Street’s main equity indexes.
With corporate earnings and economic data calendars virtually void of potentially market-moving events, the focus will be on the sentencing of confessed swindler Bernard Madoff.
At a court hearing due to begin at 10 a.m. EDT, U.S. District Judge Denny Chin is expected by legal observers to sentence Madoff, 71, to an effective life term in prison.
West Palm Beach (HedgeCo.net) – “Hennessee Group research and discussions with hedge fund managers has lead us to believe that the 20 year secular bull market in bonds is over.” Charles Gradante, Co-Founder of hedge fund investor consultant, Hennessee Group LLC, said of the 9 year high point seen this month in hedge funds.
“We see a problem growing in the bond market. The Government is issuing more debt than it is buying back. This has to lead to rates increasing and equity PE ratios adjusting downward. Our contacts among hedge fund managers continue to buy gold and short Treasuries. However, Hennessee Group expects the Treasury and Fed to put a short squeeze on at an opportune time.”
The Hennessee Hedge Fund Index advanced +5.68% in May (+11.40% YTD), while the S&P 500 increased +5.31% (+1.76% YTD), the Dow Jones Industrial Average advanced +4.07% (-3.14% YTD), and the NASDAQ Composite Index advanced +3.32% (+12.52% YTD). Bonds also rose, as the Barclays Aggregate Bond Index advanced +0.73% (+1.33% YTD).
Managers have been maintaining a conservative investment strategy, which has caused them to lag in the recent market rally. In May, funds also benefited from long positions in energy and commodity-related positions, which performed strongly.
“With hedge funds up +5.68%, May was the best month for hedge funds since February 2000, when the index was up +6.83,” said Lee Hennessee , Managing Principal of Hennessee Group . “Gains were largely driven by arbitrage strategies. However, long/short equity managers, with reduced levels of exposure, also performed well, participating significantly in the market rally while maintaining hedges. With a market correction in the short term being a possibility, we feel that most hedge funds are positioned conservatively and will be able to quickly alter exposures to protect capital if the market experiences a correction.”
“May had the biggest one month run up in commodities in 35 years,” commented Charles Gradante. “It appears to us, from Hennessee Group research and manager conversations, to be speculative and led by commodity ETF demand, which exceeds "real" demand. Furthermore, margin requirements favor the speculators. Hedge funds are betting commodities will continue to rise with many long agriculture commodities, such as sugar and corn.”
Editing by Alex Akesson
For HedgeCo.Net Email: alex@hedgeco.net
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On Wall Street – A Connecticut bill that would have imposed transparency and licensing requirements on hedge funds failed to be signed into law Wednesday when the state house of representatives ran out of time to vote on the measure.
The legislature’s special sessions will now focus on the state budget and, therefore, will not be able to address the proposed legislation.
“We’ll have to bring it up again next year,” Ryan Barry, co-chairman of the state house’s joint banks committee and the main supporter of the bill, told Dow Jones.
CNNMoney.com – A major shareholder of Amylin Pharmaceuticals Inc. ( AMLN) is backing a slate of dissident directors nominated by Carl Icahn and another hedge-fund manager, Eastbourne Capital Management.
P. Schoenfeld and Associates, which owned 2.1 million Amylin shares as of the end of the first quarter, told Dow Jones Newswires Thursday it supports all five of Icahn’s and Eastbourne’s nominees because it sees that as the only opportunity for the company to make significant strides.
"We would like to see the largest minority possible elected to the Amylin board," said P. Schoenfeld founder Peter Schoenfeld.
West Palm Beach (HedgeCo.net) – Due to poor market conditions in the distressed securities space, Dow Jones’s hedge fund arm has suspended publication of the Dow Jones Hedge Fund Distressed Securities Strategy Benchmark.
The Dow Jones Hedge Fund Convertible Arbitrage Strategy Benchmark was also halted in January, 2009 and remains suspended until further notice. The remaining strategies—Equity Long/Short, Equity Market Neutral, Event Driven and Merger Arbitrage, will continue to be published on an end-of-day basis.
Launched in November 2003, the Dow Jones Hedge Fund Strategy Benchmarks measure individual hedge fund strategies. The six existing strategies are Equity Market Neutral, Convertible Arbitrage (suspended), Distressed Securities (suspended), Merger Arbitrage, Event Driven and Equity Long/Short . DJHFI provides style-pure, hedge fund strategy indexes that exhibit highly correlated component returns.
Alex Akesson
Editor 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) – Dow Jones & Company has added London based hedge fund manager Paul Sharma as telecommunications, media and technology columnist, and NY’s award winning Donna Childs, as a financial services columnist.
"The appointments of Paul and Donna are part of our overarching strategy to enhance our editorial teams with top industry talent. We are drawing on the hedge fund and banking communities to deepen Dow Jones’s reporting and commentary on companies, industries and events for investment bankers and corporate advisors," said Adam Smallman, global managing editor for investment banking coverage at Dow Jones Newswires. "During this time of great change in markets, our editorial focus is firmly on delivering to investment bankers the intelligence that powers deals and transactions. With their industry experience, Paul and Donna will offer a unique perspective on firms, sectors and events for our investment banker readership."
Sharma was a partner at a London-based hedge fund, Cheyne Capital Management, where he managed a telecommunications value fund. Prior to that, he was the director of telecommunications sales at HSBC and spent four years as vice president and lead telecommunications analyst at J.P. Morgan in London.
Before joining Dow Jones, Ms. Childs led the microfinance firm Childs Capital LLC, which she founded in 1998. Prior to this, she was president and chief operating officer of ERC Financial Market Products in New York, an investment banker in the financial institutions group of Goldman Sachs and a director at Swiss Reinsurance Company in Zurich. Ms. Childs has won multiple awards throughout her career, including the National Association of Women Business Owners’ ’2007 Woman Business Owner of the Year’. She was named one of the ’40 under 40′ rising stars of New York in 2005 by Crain’s New York Business.
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Reuters – India Church Pension Fund has invested in Future Group backed Indivision India, Advantage Partners and IDG Accel China.
The $8 billion Church Pension Fund based in New York City has roped in Eric Mason(ex-Carlyle Group), to open a new Hong Kong office, its first in Asia, reports Dow Jones.
Mason is a former JP Morgan banker and most recently headed Carlyle Group’s Asian leveraged finance team(set-up in 2007 but disbanded in November 2008 after the credit crunch hampered its ability to raise funds). He will look after all asset classes including private equity, real estate and hedge fund investments in the continent, the report said.
New York (HedgeCo.Net) – Hedge funds gained 1.37 percent in March, according to data compiled by the Hennessee Group LLC. It was a successful month for the equity markets at well, with the S&P advancing 8.54 percent, the NASDAQ climbing 10.94 percent, and the Dow Jones advancing 7.73 percent.
"Hedge funds with a focus on the financial sector may potentially outperform in 2009," said Co-Founder of Hennessee Group Charles Gradante. "Not only did Citigroup and Bank of America announce a profitable January and February, but the borrowings at the Fed discount window have been steadily declining. It is possible that the banking crisis of confidence can unwind as quickly as it unfolded."
According to the data, the long/short equity index advanced 1.6 percent, thanks to programs launched by the U.S. government aimed at helping the banking sector. The arbitrage/event driven index gained 1.34 percent, with credit opportunities aplenty and many managers increasing stakes in bank debt, high yield and convertible bonds.
The global macro index saw a steady increase of .74 percent. The Hennessee Group pointed to the fact that many macro managers posted losses on their short-term Treasuries trade after the Fed announced they would buy $300 billion in U.S. Treasuries, which prompted buying and drove down yields.
This puts the YTD gain for hedge funds at just over 1 percent.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@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! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Dow Jones Deutschland – Leaders from the Group of 20 largest economies have yet to agree on how to deal with tax havens, including whether to spell out sanctions on financial centers that don’t share information.
An official at a G20 delegation said there will be "strong language" on tax havens, making it clear to them they must share information or face the consequences.
However, it’s not yet clear if they will threaten specific sanctions. Read Complete Article
Charlotte Business Journal – In early 2008, Jim Morgan and his partners at Covenant Capital sent a gloomy letter to their investors.
After a couple of disappointing years, the letter said, the hedge-fund firm was preparing to close. It told investors how they could retrieve their funds.
While a handful of investors took their money, a number asked Morgan, now chief executive of Krispy Kreme Doughnuts Inc., and his team to continue.
They did. And Covenant went on to have one of its best years in 2008, even as the market was collapsing.
Covenant’s fund finished 2008 up 12%, while the S&P 500 ended the year down 38% and the Dow Jones Industrial Average dropped 34%.
With less than $10 million in assets, the firm is now reopening the fund to new investors as well as accepting additional capital from existing investors.
Dow Jones Deutschland – While hedge funds suffer from redemptions and closures amid volatile markets, some firms are taking advantage of falling valuations and market dislocations to launch new funds.
Mark Fuchs, chief executive of Singapore-based Fuchs Capital Partners, said in an interview with Dow Jones Newswires that he is launching a hedge fund focused on trading blue-chip, large-capitalized Southeast Asian stocks in the region in two months.
Fuchs, the former head of Credit Suisse Group’s (CS) Southeast Asia equities division, has teamed up with two other Southeast Asian veterans: Winston Loke, who was previously Credit Suisse’s Chief Operating Officer for Asia-Pacific ex-Japan, Australia equities and Mark Maroongroge, most recently a portfolio manager with London-based hedge fund HBK Capital Management. He declined to elaborate on the size of the fund, however, other than to say it will start off "modest" in size but would eventually be "significant."
New York (HedgeCo.Net ) – After a disappointing 2008, hedge funds seem to be on the up and up, advancing 1.10% in January according to the latest research by the New York-based Hennessee Group.
According to the research, convertible arbitrage funds are leading the pack, advancing 5.79% in January with the Arbitrage/Event Driven Index advancing 2.36% as a whole. Following suit was the long/short equity strategy, which was up .90% for the month. Experts analyzed this was due to profits made from shorting earnings, since only 55% of companies had met earnings expectations in January. In addition, the Global/Macro fund index rose .44% for the month.
Mutual funds also seem to be showing signs of revival. “We are encouraged by the $6.5 billion that poured into mutual funds during the last week of January,” said Lee Hennessee, Managing Principal of Hennessee Group. “We continue to monitor fund flows and believe that if this trend continues, it could be basing and a bullish sign for equity markets.”
Hedge funds outperformed the markets last month across the board. The S & P 500 dropped 8.57%, the NASDAQ Composite Index declined 6.38% and the Dow Jones Industrial Average dropped 8.84%.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@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! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
