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.
Seeking Alpha - “You don’t want to be average; it’s not worth it, does nothing. In fact, it’s less that the market. The question is, ‘How do you get to be first quartile?’ If you can’t, it doesn’t matter what the optimizer says about asset allocation.” – Dr. Allan Bufferd, CIO of the MIT endowment in Foundation and Endowment Investing.
While Dr. Bufferd was talking about investing in private equity, the same applies to hedge funds as well. (We have two extensive chapters on the topic in my book.) I wanted to chat a bit about hedge funds, and then more specifically hedge fund clones. I have written a bunch of articles on hedge fund indexing and replication in the past, and there has been a lot of chatter recently about hedge fund clones.
The Mac Weekly – Larson resigned from the board in August 2007 after the sale of his hedge fund, which had been one of the most successful in the country. Sowood Capital Management was an early, high-profile casualty of the subprime mortgage collapse that preceded the financial crisis. The fund lost more than half of its value in July 2007 when investors ran from corporate credit and traditionally safe bets became began to backfire.
“We’re very happy to have Jeff Larson back on the committee,” Aase said. “He brings a wealth of institutional investment experience with him, along with insights gained from the difficulties he encountered with his hedge fund.”
Bloomberg – Harvard University, the wealthiest U.S. school, said its investments fell 27.3 percent in the past year, a $10.1 billion loss that was smaller than President Drew Faust’s forecast in December before markets started to recover.
The endowment declined to $26 billion from $36.9 billion in the year ended June 30, including the inflow of gifts from donors and $1.7 billion in distributions to the university, according to a report today by Harvard Management Co., which oversees the fund. Gains in non-U.S. fixed-income and emerging- markets securities helped trim a loss that Faust had said could reach about 30 percent.
June 17 (Bloomberg) – Felix Chee, an adviser to China’s $200 billion sovereign wealth fund, said it aims to make investments in hedge funds.
“We will have a preference for managed accounts,” he said in an interview today at the GAIM International hedge fund conference at Monaco’s Grimaldi Forum. “The platform would like a core of single-manager funds and fund-of-funds.”
Chee, who said he will initially run China Investment Corp.’s hedge fund and proprietary trading effort, is a special adviser to the chief investment officer of CIC.
“It’ll be across the spectrum of strategies,” he said. “We’re looking for the best managers and a handful of fund of funds, and when I say handful I mean five or less.”
Chee previously managed the University of Toronto’s endowment, where he managed a portfolio of about $1 billion in hedge fund assets. Asked if he was daunted by the prospect of running a $200 billion portfolio, he said “I try not to look at the zeros.”
Bloomberg – Cornell University is cutting its hedge-fund holdings by as much as 25 percent to save on fees after its endowment tumbled last year, Chief Investment Officer James Walsh said.
“We are de-emphasizing the hedge funds and more emphasizing the long-only managers,” said Walsh, who joined the Ithaca, New York, school in 2006. Cornell couldn’t justify hedge-fund fees, which typically equal 2 percent of assets and 20 percent of investment profits. Long-only managers buy stocks they expect to rise in price, while hedge funds also sell short, or bet on a decline.
Boston Globe – Massachusetts again has some of the best money managers in the world. But unless you’re a public employee or the parent of a Harvard student, you won’t benefit much from this tremendous talent.
Harvard University’s endowment, already the nation’s largest university endowment, earned 7 to 8 percent over the past year, a period when stock markets tanked and many investment professionals lost substantial sums. Harvard’s performance, first reported yesterday by The Wall Street Journal and confirmed by a financial industry source briefed on the school’s returns, puts it at the top of an elite group of institutional investors.
Financial firm Northern Trust col lects returns on 87 endowments and foundations but not Harvard. Nevertheless, the Cambridge university’s performance would put it "at the top of the class," said Northern Trust spokesman John O’Connell.
FT Alphaville- New figures from Singapore’s central bank bear out the (abundant) anecdotal evidence of the quickening exodus of Asia-focused hedge funds out of Japan and elsewhere and into Singapore.
Reuters reports that assets managed by fund managers in Singapore grew 32 per cent to S$1,173bn ($862bn) last year, driven by a doubling in assets held by hedge funds.
Assets managed by hedge fund managers in Singapore doubled to close to S$80bn in the year, while the number of hedge fund firms in Singapore increased by more than 50 per cent to almost 300, according to the island state’s Monetary Authority. Meanwhile institutional investors such as pension funds, endowments, foundations, companies and financial institutions accounted for 43 per cent of the funds.
Altassets – Cleantech-focused venture capital firm RockPort Capital Partners has closed its third fund, RockPort Capital Partners III, on over $450m, the hard cap of the fund. It had an initial target of $400m and held a first closing just three weeks ago, on $400m.
The new fund will continue the focus of RockPort’s previous funds, investing in the development of technology and products in emerging cleantech companies.
The investor base consists of US university endowments, family offices, foundations and institutional investors from both the US and Europe.
Wilber James, managing general partner, RockPort, said, ‘The cleantech sector provides enormous opportunities to identify and foster initiatives that offer solutions to global energy and natural resource needs, while providing superior investment returns. We have already seen how the teams we invest in can create enormous value. Our collaborative approach together with a business-building mentality and keen domain expertise has proven invaluable to growing companies.’
