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.
Daily Mail – Women in the hedge fund industry have given strength to the theory that the world of finance would be more efficient if females were in control.
According to new figures from Hedge Fund Research, funds run by women have been doing much better than those managed by men during the past year of the financial crisis.
But they were still unable to work miracles – the figures showed female-run hedge funds were down 9.6 per cent over the 12 months, comparing with a fall of 19 per cent for the rest of the male-run industry.
Reuters – Massachusetts will remove $1.6 billion from hedge fund managers Blackstone, Crestline, EIM Management, and Strategic Investment Group as it shifts its investment strategy after suffering recent heavy losses.
Trustees for the roughly $40 billion fund voted on Tuesday to pull out of four firms that used portable alpha, a once popular technique employed by pension funds to beat markets that underperformed during the financial crisis.
“This is a strategic shift and not a dissatisfaction with the individual managers,” said the pension fund’s chief investment officer, Stanley Mavromates.
Reuters – Active credit fund managers are set to enjoy stellar returns in 2010 as individual company performance supplants the financial crisis as the crucial driver of prices.
Passive managers who track indices — as opposed to funds that focus on picking names, or hedge funds with long/short strategies — have performed strongly since March as all credit assets have risen. They were helped by market-wide recovery in credit markets from a year ago.
Reuters – Francois Barthelemy has had a tough year. The F&C Partners manager saw assets under management in his hedge funds slump by 80 percent as the financial crisis gripped, and revived performance is yet to bring new inflows.
Speaking to Reuters in his office high above the railway tracks into London’s Liverpool Street station, Barthelemy is hopeful for a market recovery which lasts into 2010, but still rails at the knee-jerk response as markets were jolted.
“People panicked and started to leave this space in droves,” Barthelemy said.
Canada.com – Holding a hedge fund conference at a casino may not be the best optics for an industry that was cast as one of the free-wheeling gamblers of the financial crisis, but players in the fledgling Canadian sector meeting in Niagara Falls this week have plenty of other things to focus on.
With investors demanding more disclosure about risk and liquidity exposure, it comes as no surprise that transparency is on the tip of everyone’s tongues at the World Alternative Investment Summit Canada at the Fallsview Casino Resort.
“Transparency is a big thing here in Canada,” Tom Hockin, chairman of the Expert Panel on Securities Regulation, told delegates to the summit, which ends Wednesday.
Wall Street Journal – Hedge fund subscriptions have returned to pre-financial crisis levels and redemptions slowed markedly in August, GlobeOp Financial Services SA, a hedge fund administrator, said Thursday.
The company, which runs middle- and back-office functions for 180 hedge fund firms and other asset managers, including keeping track of money coming in and out of funds, said client subscriptions were more than $2 billion in July and nearly that much in August, marking the first month since September 2008 to exceed that level.
Redemptions of client funds are only $700 million so far in August, sharply down from $6.4 billion in July, and GlobeOp’s schedule of forward redemptions shows “a substantial reduction compared to 2008 and early 2009 levels.”
Reuters – Thames River Capital is hoping to launch two investment grade credit strategies later this year and is looking at how best to target the U.S. institutional market, chief executive Charlie Porter told Reuters.
The independent fund house, which manages $11.5 billion (6.9 billion pounds) in traditional long-only and hedge-fund-style products, has been adding to its investment team to support new products, and hopes to scoop up rivals weighed down by the financial crisis.
Reuters UK – Thames River Capital is hoping to launch two investment grade credit strategies later this year and is looking at how best to target the U.S. institutional market, chief executive Charlie Porter told Reuters.
The independent fund house, which manages $11.5 billion (6.9 billion pounds) in traditional long-only and hedge-fund-style products, has been adding to its investment team to support new products, and hopes to scoop up rivals weighed down by the financial crisis.
"Whenever you have periods of turmoil and tumult, interesting opportunities are thrown up," Porter said in an interview.
Reuters – Hedge fund firm Citadel Investment Group will return millions to clients who asked to exit last year, but were locked in when its flagship funds lost more than half their value during the financial crisis.
The Chicago-based firm, which invests $12 billion, informed clients on Tuesday it plans to give back $250 million on October 1 and to make another distribution at the end of the year, according to an investor who asked not to be named.
Citadel last year was one of many hedge funds to block investor exits. Now its decision to return the money suggests the worst may be over for the $1.4 trillion hedge fund industry after it suffered its worst-ever losses and record outflows last year.
The Washington Post – The Wall Street herd is at it again. Even as the cleanup crew is carting away the debris left by the last financial crisis, the investment banks, hedge funds and exchanges are busy working on the next one.
Forget collateralized-debt obligations and credit default swaps — the new new thing is high-frequency trading. In the last three years, this practice has boosted trading on the country’s stock exchanges by more than 150 percent, to the point where it now accounts for two-thirds of the daily trading volume.
Taping a "Bernanke on the Record" special that will air on PBS this week, the top U.S. monetary policy-maker defended the aggressive, even unorthodox actions taken by the Fed during the long recession and deep financial crisis.
"I was not going to be the Federal Reserve Chairman who presided over the second Great Depression," Bernanke said.
"When you’re in a situation like this, a perfect storm, sometimes you have to do things that are a little unorthodox, out of the box,"
Salon – John R. Talbott is a former investment banker with Goldman Sachs and the author of "The 86 Biggest Lies on Wall Street," "Contagion," "Obamanomics," and "The Coming Crash in the Housing Market."
Simon Johnson, the former chief economist of the International Monetary Fund (IMF), is the co-founder of the Baseline Scenario, a Web site tracking the ongoing financial crisis. He is one of the most visible public commentators on the ongoing financial crisis and its causes.
From June to July of 2009, Talbott and Johnson held an e-mail conversation on the following topic:
