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.
Reuters – Switzerland knocked the United States off the position as the world’s most competitive economy as the crash of the U.S. banking system left it more exposed to some long-standing weaknesses, a report said on Tuesday.
The World Economic Forum’s global competitiveness report 2009/2010 showed economies with a large focus on financial services such as the U.S., Britain or Iceland were the losers of the crisis.
The U.S. as the world’s largest economy lost last year’s strong lead, slipping to number two for the first time since the introduction of the index in its current form in 2004.
Tubefilter news – Do you know what a Hedge Fund is? I don’t. And neither do the boys at the Claude S. Dutchy, LLC hedge fund. But, damnit, they’re determined to make it rich enough to race Lamborghinis, orbit earth in space, swim with their pet mako sharks and have orgies! Or so, Claude says in episode two of this uneven, yet satisfying web series, Hedge Fund.
Creator, writer and director Chris Murray conceived the idea a couple of years ago, ‘while the economy was strong and money was flowing’ about four slackers without a clue who decide for no good reason to start a hedge fund. The boys operate out of their one bedroom apartment in Manhattan concocting angles to success that include uber-skinny jeans, croissandwiches and one bogus ten million dollar promissory note.
Bloomberg – Ben Bernanke’s renomination as Federal Reserve chairman gives him a guaranteed job for four years, precisely the kind of long-term, risk-free tenure that regulators are trying to outlaw elsewhere in finance.
President Barack Obama was always going to leave Bernanke in the saddle, even if he does lack the all-important “Alumnus of Goldman Sachs Group Inc.” qualification that seems to be a prerequisite for anyone wanting to run anything in the United States of Keynesian Experimentation. Working out what bonus, if any, Bernanke might merit for his eight years steering the world’s biggest economy, though, is a tricky task.
Business24-7 – Investment funds that extended redemption periods because of adverse conditions in the market have started to cut their notice periods.
The move comes in response to positive factors such as the recent market rally and improved liquidity levels following the government’s measures to boost the economy.
Funds that have cut redemption periods – the time investors must wait to receive their cash when they sell a holding – include Permal, Markaz and Jabre Capital.
Bloomberg – Brazilian hedge funds lured about 8.2 billion reais ($4.52 billion) in July, the biggest monthly inflow this year, as a rebounding economy and record low interest rates increased demand for stocks and other higher- yielding assets.
The investment helped the funds recoup their 2009 losses, according to data through July 30 released by the National Association of Investment Banks. Hedge funds, known as multimercados, received 3.5 billion reais this year through July 30 as the industry began to lure back some of the record 54.6 billion reais of redemptions in 2008, according to the agency.
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.
Gulf News – Short-selling, one of the few tactics that made money for hedge funds in 2008, has become a risky bet as prospects for equities have improved, while getting hold of stock to sell is harder as lenders shun weak funds.
Some hedge funds have already changed tactics and are simply buying cheap stocks, wary of getting burnt if a stock they are shorting announces unexpectedly good earnings and the share price spikes – a real possibility in an improving economy.
High-profile hedge fund manager Philippe Jabre said he had no short positions because it was "too dangerous", although in future shorting could prove a better trade.
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.
Interactive Investor – The retreat of two high-profile activist funds from Japan underscores the difficulties such funds face in squeezing value from their investments and raises worries about lax corporate governance in the world’s second-biggest economy.
The Children’s Investment Fund (TCI) and Steel Partners have been scaling back since last year, joining a growing pool of foreign funds reducing exposure to Japan.
The departure also points to rising frustration among foreign funds that managers are not interested in maximising value, while domestic shareholders, often through complex cross-holdings, want to maintain the status quo.
AltAssets – Florida’s State Board of Administration has launched a $250m growth capital fund of funds that will invest in technology and growth-related businesses with a presence in the US state.
The Florida Growth Fund, to be managed by private equity fund of funds manager Hamilton Lane, will invest on behalf of the Florida Retirement System Pension Fund.
“Florida needs leadership to develop economic growth, because this is one of the biggest issues currently facing our state,” said Attorney General McCollum, one of the SBA’s Trustees. “We have to find a balanced way to stimulate our economy and solve these problems rather than simply relying on federal handouts.”
Reuters – Wall Street was set to open flat on Thursday, with investors eyeing retail sales and weekly jobless data for fresh insight into the state of the recession-hit economy.
* Investors will watch a 30-year treasury note auction for direction on interest rates, one day after a weak 10-year auction sent yields on the benchmark note to a eight-month high. The latest results are due at 1 p.m. EDT.
* Stock investors have been concerned that rates may dampen an economic recovery by increasing borrowing costs for consumers and businesses and are drawing money away from the stock market.
FierceFinance – David Einhorn, the head of Greenlight Capital, caused quite a stir at the Ira W. Sohn Investment Research Conference last year. He made it known that he was shorting Lehman Brothers, which was trading at $60 at the time. You know the rest of the story.
It’s no surprise that people, including a columnist for the New York Post, were interested in what he had to say at the conference this year. He didn’t deliver the same sort of shocker. Rather, he offered a sober analysis of the Obama Administration’s performance. He basically thinks that the focus on propping up banks hasn’t really done much to the economy as a whole.
