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.
Chicago Tribune – The Citadel Investment Group will shutter its Tokyo offices and cut 37 jobs from its Asian operations.
The Chicago-based hedge fund will still have a presence in Hong Kong, where 25 positions will be cut, the company said Monday. The investment firm founded by billionaire Ken Griffin in 1990 will maintain 25 to 30 staffers in Hong Kong. A regional group that invested in companies undergoing mergers, asset sales or lawsuits will be cut.
Citadel’s decision comes after its two primary funds reported losses of 47 percent through November. The firm manages $16 billion in assets.
Bloomberg – Citadel Investment Group LLC, the hedge fund manager founded by Kenneth Griffin, will close down its Tokyo office and Asian principal investments operations, cutting more than half of jobs in the region.
Citadel will run its remaining Asian operations from Hong Kong in the future after shutting the regional principal team that invests in companies undergoing or about to go through mergers and acquisitions, spinoffs, asset sales or legal challenges. Katie Spring, a spokeswoman in Citadel’s Chicago head office, confirmed the decision today.
Hedge funds globally are cutting jobs, limiting withdrawals and liquidating funds as a credit crunch and a 46 percent drop in the MSCI World Index in 2008 put them on course for the worst year on record. Hedge funds have lost 18 percent this year, according to Chicago-based Hedge Fund Research Inc.
West Palm Beach (HedgeCo.net) – Derivatives exchange group CME has hired Mark H. Thompson Jr. as Director of hedge funds. Thompson, 37, will be responsible for serving as the company’s primary liaison to the East Coast hedge fund community and developing hedge fund business within the region across all CME Group product lines. He will be based out of New York and will report to Tina Lemieux, Managing Director of hedge funds and broker services.
Thompson joins CME Group from UBS Securities LLC where he most recently served as a member of the macro/cross asset sales team. In this role, he was responsible for serving as the single point of contact for macro, long/short, transition and asset managers for all derivatives and cash products and performing cross-asset idea generation and research for clients. He also served as a member of the bank’s global futures and options sales team. His background also includes operations and analyst roles with Moore Capital Management and Banque Paribas.
CME Group is the world’s largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York.
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! Read Complete Article
Bloomberg – Office rents in Mayfair and St. James’s, the London districts with Europe’s biggest concentration of hedge funds, are falling for the first time since 2005 as the alternative investment industry has its worst year in two decades.
The cost of renting new or refurbished offices in those neighborhoods, the most expensive in the world, fell 6.5 percent to 107.50 pounds ($168) a square foot in the six months ended Sept. 30, data compiled by Jones Lang LaSalle Inc. show. Incentives such as rent-free periods lowered the net figure to 95.96 pounds, the commercial property broker estimates.
Demand for space is falling as at least 350 funds in the $1.7 trillion hedge fund industry have closed this year amid the global financial crisis, including Peloton Partners’ ABS Fund and MKM Longboat Capital Advisors’ Multi-Strategy Fund. Client redemptions and forced asset sales have given investors losses for five straight months through October, the longest streak since 1990, and the slump may push rents down to as low as 90 pounds a foot, Jones Lang of Chicago estimates.
Bloomberg – Hedge funds run by Jeffrey Gendell and John Burbank III posted their worst monthly losses in October. Peter Thiel gave back gains made earlier in the year. Nobel-prize winner Myron Scholes froze his biggest fund.
The managers, like many in the $1.7 trillion hedge-fund industry, were caught in a downdraft of market declines, client redemptions, demands from lenders for more collateral and forced asset sales that accelerated after Lehman Brothers Holdings Inc. collapsed in mid-September.
Funds fell by an average 5.4 percent last month, pushing the year-to-date drop to 15.5 percent, according to the HFRI Fund Weighted Composite Index compiled by Chicago-based Hedge Fund Research Inc. Investors have been handed losses for five straight months, the longest streak since HFRI started the index in 1990.
“October was the perfect storm for liquidity drying up, especially in the credit markets,” said Gary Vaughan-Smith, co- founder of London-based SilverStreet Capital LLP, which has $600 million invested in hedge funds for its clients. “We are through the worst and the turmoil should be gone by the end of November.”
Reuters UK – Funds of hedge fund portfolios are battening down the hatches in the current volatile markets by building up cash or steering clear of strategies with too much exposure to market movements.
With returns in the hedge fund industry hard to come by as the credit crisis continues to hit markets, managers who hold portfolios of hedge funds have become wary of strategies that could be caught out by another sharp downturn.
"These are the toughest conditions I’ve seen in 16 years," said Ken Kinsey-Quick, fund of hedge funds manager at Thames River Capital, who expects billions of dollars more of asset sales by banks.
"We’re expecting a big leg down in all financial assets … We do think in the short-term we don’t want much beta." Beta means exposure to overall market movements.
Reuters – Funds of hedge fund portfolios are battening down the hatches in the current volatile markets by building up cash or steering clear of strategies with too much exposure to market movements.
With returns in the hedge fund industry hard to come by as the credit crisis continues to hit markets, managers who hold portfolios of hedge funds have become wary of strategies that could be caught out by another sharp downturn.
"These are the toughest conditions I’ve seen in 16 years," said Ken Kinsey-Quick, fund of hedge funds manager at Thames River Capital, who expects billions of dollars more of asset sales by banks.
Financial Times- A hedge fund manager who made some of the biggest profits from the global credit crisis said on Wednesday there was worse to come as evidence mounted that banks are struggling to regain their earnings power and properly value their assets.
Morgan Stanley said second-quarter profits plunged 60 per cent to $1bn and would have fallen further without $1.4bn in one-time asset sales, while revealing that it had suspended a suspected rogue trader for allegedly mismarking positions by $120m.
