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West Palm Beach (HedgeCo.net) - According to a recent survey conducted by the Association of Investment Companies (AIC), a poll of 1,300 sophisticated private investors showed that 15% believed that hedge funds offer the potential for strong returns in the current environment. However they are also concerned about their perceived lack of transparency (17%) and riskiness (17%).
Investors are also cautious about hedge funds because they believe that they are not regulated (14%), and are concerned about the reputation for high charges (12%). Some investors also find them confusing (11%) and believe they are only accessible to the wealthy (5%).
Although some sophisticated private investors are wary of hedge funds, 6% of those surveyed are already investing in hedge funds, 5% have invested in the past and 3% are planning to invest in the future. Interestingly, nearly half (46%) of investors believe they may possibly invest in hedge funds in the future whilst only 29% of investors surveyed would never invest in hedge funds.
"Many of these investors’ concerns over hedge funds are addressed through the listed hedge fund and fund of hedge funds sectors," Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC) said, "The listed structure of closed ended hedge funds and fund of funds means investors have access to a much higher level of transparency. Shares in listed funds are available on the stock market just like any other share so they are available to those of modest means as well as the super wealthy."
"This is a real growth area of the industry with the hedge fund sector making up 65% of the assets raised this year in the investment company sector. However, it is still a young sector, so long-term performance records are not available for the majority. Investors need to do their homework to make sure they select the right fund for them in this diverse sector and if they are unsure they should take independent financial advice," she concluded.
Ian Plenderleith, Chairman of BH Macro, said, "Hedge funds who can maintain the necessary standards of investment expertise and risk management have demonstrated that they can deliver superior returns on a consistent basis. Listed hedge fund vehicles give a wider range of investors access to alternative investment strategies through an avenue they are familiar with. They get the benefit of the regulatory safeguards and disclosure obligations, and the secondary market liquidity that go with stock exchange listing."
Robin Bowie, Chairman of Dexion Capital, said: "When dislocation in financial markets reaches the present level, it provides an ideal environment for hedge funds, which are well-placed to make opportunistic investments where they recognise value and can hedge out the market risk. Some of those positions will be illiquid, which will be unsuitable for most managers of open-ended funds. Closed-ended funds employ ‘permanent capital’, raised on the stock exchange, which allow managers to blend liquid and illiquid assets and take advantage of the current mismatch in the markets. In essence, closed-ended funds bring liquidity to illiquid situations."
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Proactive Investors UK - The top thirty gainers for the London Stock Exchange (‘LSE’) read out like a roll call for the British and Irish financial industry, after the Financial Services Authority (‘FSA’) announced late last night that it was imposing a temporary ban on short selling financial stocks. Groups with short positions over 0.25% in the 29 companies included in the ban will have to declare their positions by Tuesday.
Not surprisingly, the FTSE 100 roared to life this morning, climbed a whopping 340 points, or 7.1% to 5225 by 10:30am, the biggest single day gain in more than two decades. The surge higher was lead by financial institutions, which have been offered a temporary reprieve from the usually lucrative tactic by hedge funds to short sectors out of favour with the market. Even large spread betting firms, like CMC Markets, informed private investors this morning that it was not accepting any new short bets on financial stocks, as under normal circumstances, it would hedge those bets, but can no longer do so.
The Independent - Stanley Fink, the so-called godfather of UK hedge funds, has made a dramatic return to the industry after retiring from Man Group, the largest alternatives manager in the world, only two months ago.
Mr Fink confirmed yesterday that he had been appointed chief executive of International Standard Asset Management, an alternative asset manager with about £200m under management. The fund also announced the appointment of the former Labour Party fundraiser Lord Levy as chairman.
The London-based trading group said Mr Fink will assume responsibility for the operational management of the business to build a significant hedge fund presence, while both will use their extensive network of wealthy contacts to boost the fund’s assets under management.
International Standard Fund was set up by the former Merrill Lynch gold trader Roy Sher, a friend of Mr Fink, in 2003, and is mainly backed by private investors. Mr Sher said the big-name appointments should help the firm to win market mandates ahead of its hedge fund rivals.
New York (HedgeCo.Net) - In an effort to stave off bailout rumors, the Federal Reserve is urging American International Group Inc. to find private investors and warns that they should not expect a loan from the central bank. However, talks have become increasingly difficult in the wake of all three major ratings agencies casting a shadow of doubt of the company.
AIG had its key credit ratings cut late on Monday to A minus, down from AA minus by Standard & Poors, due to the huge losses the company has endured from its mortgage-backed investments and credit derivatives. S & P warns that they could face further ratings cuts, unless they ”implement further liquidity options” and/or complete ”the successful sale of at least a portion of its business assets.”
Meanwhile, Moody’s cut AIG’s ratings to A2, down from AA3 while Fitch Ratings cut their ratings to A, down from double A minus.
The ratings cut could potential cost AIG billions from collateral payments on its derivatives trades.
Governor David Patterson facilitated a deal between AIG and New York state insurance regulators when he allowed the company access to $20 billion of assets from its subsidiaries to use as collateral against any needed loans. Patterson is hoping this will prevent a repeat of what happened with Lehman Brothers Holding Inc. and Bear Stearns.
Shares of AIG were trading as low as $3.50 on Monday and closing at $4.76, down over 60 percent.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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West Palm Beach (HedgeCo.net) - Emergent Asset Management launched the African Agricultural Land Fund in August 2008, with a second closing to take place in September 2008.
The fund has raised almost €2 billion already ($2.9 billion), and wants to raise a total of €3 billion and is canvassing a range of investors. Minimum investment size is €500,000 for private investors and €5m for institutional investors.
The African Land Fund will offer investors the opportunity to participate in the growing Sub-Saharan agricultural sector. It will apply modern management disciplines and introduce improved farmland techniques to increase crop yields and investment returns.
Initially, the investment focus will be in South Africa. The portfolio will be expanded within Africa to include (but not limited to) countries such as Botswana, Zambia, Mozambique, Swaziland and the DRC.
Emergent has partnered with Grainvest, a firm of professional agricultural traders and one of the top five participants on the South African Securities Exchange, involved in agriculture locally, including farming, manufacturing, and transport and trading.
The Fund’s targeted return is 25% pa and will be denominated in Euros.
The Fund qualifies as a socially responsible Investment in keeping with the co-managers’ investment philosophy, endeavouring to make a positive contribution to the well-being of the local community.
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TORONTO – Introduction Capital announced today that Horizons BetaPro ETFs, Felcom Data Services Inc. and JovVentures Inc. have signed on as the partner sponsors for its third annual forum for global sophisticated investors interested in the Canadian hedge fund market entitled “Canadian Hedge Fund Managers Speak with Investors”. Horizons BetaPro ETFs, managed by BetaPro Management Inc., are showing their support for this forum for the second year in a row.
“We are proud to associate our company with a forum dedicated to supporting the Canadian hedge fund industry,” said Howard J. Atkinson, President of BetaPro. “It is a good fit for us, given that BetaPro is a significant provider of ETFs products in Canada and that ETFs are used by both institutional and private investors globally.”
About Horizons BetaPro ETFs:
Horizons BetaPro ETFs are managed by BetaPro Management Inc., Canada’s sole provider of investment tools allowing investors to profit when the market is rising or falling, or to reduce their risk by hedging their existing market exposure. BetaPro currently manages the largest product offering of any Canadian ETF provider with approximately $1.8 billion amongst 28 ETFs.
About Felcom Data Services Inc.:
Felcom Data Services Inc. (FDS) has been providing Fund Accounting and Transfer Agency services to investment fund manufacturers since 2001, and offers a total solution to address all investment product administrative requirements. FDS has greater than $3.6 Billion in Assets under Administration for 30 Customers, and services more than 250 different products.
FDS can manage the Fund Valuation & Accounting and Transfer Agent & Registrar needs of any sized firm. Where necessary, FDS can develop customized solutions and interfaces or other technological requirements with the support of our system providers. The company also provides Relationship Management with their specialized Strategic Partner Vendors. FDS is able to provide an immediate total administration solution for established product manufacturers or a phased-in implementation approach to suit a “start-up” Customer’s growth over time.
About JovVentures Inc.:
JovVentures Inc., a wholly owned subsidiary of JovFunds Management Inc., is an incubation platform for financial services companies. With a focus on Canadian private equity and emerging hedge fund managers, JovVentures has developed a robust institutional platform across an array of services and functions including on-shore and off-shore capital raising, middle office workflow, legal registration and marketing.
The forum will provide global investors with direct access to 16 of Canada’s most prominent hedge fund managers including Salida Capital, Front Street Capital and Sprott Asset Management. Managers will present an overview of their firm, fund strategy, risk management approach and market outlook to an audience of fund of funds, family offices, institutions and high net worth individuals from around the world. The forum will be held on September 25th, 2008 at the St. Andrew’s Club & Conference Centre in Toronto, Ontario, Canada.
About Introduction Capital:
Introduction Capital is a boutique firm that brokers strategic business relationships between sophisticated global investors and Canadian hedge fund managers. The firm tracks over 100 hedge funds in Canada and offers global investors the perfect place to “start” their Canadian manager search. Introduction Capital encourages offshore investors to visit Canada by creating full manager meeting itineraries on their behalf. Over $150 million in investor capital has been introduced to Canadian hedge fund managers through Introduction Capital since it was founded in 2004 by Karen Azlen. Introduction Capital is a member of the Canadian Chapter of AIMA and is registered with the Ontario Securities Commission as a Limited Market Dealer.
Attendance to the forum is by invitation only with limited seating. For inquiries, information on attending or interview requests please contact Karen Azlen, CEO, Introduction Capital Inc. at 416-849-1927 or k.azlen@introcap.com. Please visit our website at www.introcap.com.
Reuters - Man Group Plc, the world’s biggest listed hedge fund company, said demand for its fund products had remained strong in the first quarter and it was confident about its prospects for the full year.
Sales in the three months to June 30 were $5.0 billion (2.5 billion pounds) while funds under management increased to $79.5 billion from the $74.6 billion seen at the end of March.
"Demand for our fund products has remained strong, both from private investors and institutions," Chairman Jon Aisbitt said in a statement prepared for the annual shareholder meeting on Thursday.
"This success in asset raising reflects the group’s broad geographic presence and the continued attraction of conservatively structured alternative investment products," he added.
West Palm Beach (HedgeCo.net)- Global Hedge fund Man Group has increased their assets under management from $74.6 billion at 31 March 2008 to $79.5 billion at 30 June 2008.
"Demand for our fund products has remained strong, both from private investors and institutions, with sales in our first quarter to 30 June 2008 totalling $5.0 billion." Jon Aisbitt, Chairman of Man Group said in a statement, "This success in asset raising reflects the Group’s broad geographic presence and the continued attraction of conservatively structured alternative investment products."
Overall product performance was positive, with AHL, Glenwood, Man Global Strategies, and RMF all showing positive returns. Redemptions for the three months to 30 June 2008 totaled $2.5 billion, of which private investor were $1.5 billion.
Man is one of the worlds largest alternative investment management companies, originaly founded in 1783, Man is now ranked in the top 40 companies of the FTSE 100 Index with a market capitalisation of about $20 billion.
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West Palm Beach (HedgeCo.Net)- Man Group has agreed to pay $50 million for a 25% stake in Nephila Capital, an alternative investment manager specializing in insurance-based instruments such as insurance linked securities, catastrophe bonds, insurance swaps and weather derivatives.
The CEO of Man Group plc, Peter Clarke, said, "This transaction further develops Man’s strategy to expand the range of opportunities for our investors. The natural catastrophe and weather derivative markets offer significant opportunities for uncorrelated alternative investment returns. We are excited at the prospects of this strategic partnership and what it means for our and Nephila’s investors."
The investment, which follows Man’s purchase of 50% of credit specialist Ore Hill in March, comes as the increasingly competitive hedge fund industry hunts for sources of extra return not correlated with traditional markets.
Bermuda-based Nephila, which manages around $2.4 billion in assets and employs 25 staff, specialises in insurance-based instruments such as insurance-linked securities, catastrophe bonds, insurance swaps and weather derivatives, Man said in a statement on Friday.
Man is a world-leading alternative investment management business. With a broad range of funds for institutional and private investors globally, it is known for its performance, innovative product design and investor service. Man manages over $78 billion and employs 1,600 people in 13 countries worldwide.