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New York (HedgeCo.Net) – In an update from MENA hedge fund investor SilkInvest, CEO Baldwin Berges writes, “While the major economies are still fuelled on policy support level, there are several economies in our region of focus that benefit from authentic internal growth drivers that are not always in need of extra stimulus.”
“During the month of August, in anticipation of a possible correction of the summer rally in the majors, we have been taking some profits across our holdings, thereby increasing our cash levels in both our Arab and African equity funds to levels of around 15% and 13% respectively.” Berges says, “In hindsight, this decision seems to be paying off. Both funds arguably continue to be amongst the most diversified across markets and sectors within the fund peer groups. We retain the flexibility to invest in the right opportunities as they present themselves.”
Regarding the MENA markets, he said, “a development, although not very influential to stock prices, caught our attention: Yahoo, the popular Internet search engine, agreed to buy Arabic-language Internet venture Maktoob.com as it seeks to enter the Middle East market. Yahoo did not disclose the terms of the agreement. The transaction is set to be completed in the fourth quarter of this year. This is interesting because Yahoo sees tremendous growth opportunities for Arabic content in the region and sees in excess of 30% annual growth in internet users in the region over the years to come.”
Alex Akesson
Editor for HedgeCo.net alex@hedgeco.net 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!
ZURICH, June 9 (Reuters) – Hedge fund outflows of $116 billion in the first quarter of 2009 were the second highest since 1994, Lipper data show, yet hedgies may yet receive a boost from some pension funds before the end of the year. Aureliano Gentilini, Lipper’s global head of hedge fund research, said on Tuesday he expected hedge fund outflows to taper off in the second quarter and that inflows could return in the third as investor confidence returns.
"Although down 21 percent from the fourth quarter of 2008, outflows were high, but partly because withdrawal restrictions imposed in the fourth quarter were lifted in Q1 of 2009," said Gentilini.
Gentilini also said that, in spite of having their worst ever year in 2008, hedge funds were seeing renewed interest from larger institutions as the dust from the financial crisis settles. Lipper is a Thomson Reuters research firm.
Bloomberg – Commoditrade Inc. plans to introduce an energy hedge fund in the fourth quarter, complementing a fund that invests in industrial metals.
The new fund will use the relative-value strategy followed by the metals fund, Chief Executive Officer David Phipps said yesterday in a phone interview. He declined to comment on the performance of the metals fund, the AMCO Commodity Fund, which Georgetown, Grand Cayman-based Commoditrade bought in February.
Commoditrade and competitors are opening energy funds as oil futures listed in New York rebound from the worst slump ever. Galena Asset Management Ltd. started an energy hedge fund this month that it said may expand to more than $1 billion. Andrew Serotta, who worked for Vitol Group, aims to raise $100 million for an oil hedge fund called Logista Capital.
Bloomberg – Greenlight Capital Inc., the hedge- fund firm run by David Einhorn, added to its holdings of Ford Motor Co. debt in the first quarter and invested in EMC Corp., Harman International Industries Inc. and Pfizer Inc.
The hedge fund bought Ford’s high-yield, high-risk bank loans at an average price of 37 cents on the dollar starting in the fourth quarter of 2008, according to a May 1 letter the New York-based Greenlight sent to investors. The debt rose to 45 cents on the dollar when the first quarter ended, said the letter, a copy of which was obtained by Bloomberg News.
West Palm Beach (HedgeCo.net) – "Alpha" released the results of the 2009 Hedge Fund 100, the magazine’s eighth annual ranking of the world’s biggest single-manager hedge fund firms. Although most hedge fund managers in 2008 couldn’t escape the carnage from what many have called the worst financial crisis since the Great Depression, their industry overall lost less money than did other investors. For their part, the firms in the Hedge Fund 100 managed a combined $1.03 trillion in assets at the beginning of this year, down from the record $1.35 trillion that the world’s 100 largest firms managed at the end of 2007.
Bridgewater Associates leads the Hedge Fund 100 with $38.6 billion in assets under management. The Westport, Connecticut-based firm, which was founded by Raymond Dalio more than 30 years ago, grew by more than $2 billion in assets last year, based on the strength of its Pure Alpha Strategy hedge fund, which was up 8.7 percent in 2008. New York-based JPMorgan — the world’s biggest hedge fund firm a year ago — saw its assets fall 26.4 percent, to $32.9 billion, in large part because of redemptions and poor investment performance at its Highbridge Capital Management group.
Redemptions have been a challenge for most hedge fund firms, even those that managed to deliver positive returns in 2008, as investors have looked to raise cash where they can. In the fourth quarter of last year, hedge funds saw a net outflow of $152 billion, with most of the assets coming out of bigger firms. In recognition of this new reality, "Alpha" changed the methodology for the Hedge Fund 100, using firm and fund asset totals as of January 1, 2009 (in the past the magazine collected December 31 data). To qualify for "Alpha’s" 2009 Hedge Fund 100, a firm needed at least $4 billion in assets under management, compared with the $6.25 billion minimum a year ago.
The ten biggest hedge funds managed a combined $264 billion at the start of 2009, down nearly 12 percent from year-end 2007.
"Alpha’s" Hedge Fund 100 Top 10
Rank Firm Total Capital ($ millions) 1 Bridgewater Associates 38,600 2 JPMorgan Asset Management 32,893 3 Paulson & Co. 29,000 4 D.E. Shaw & Co. 28,600 5 Brevan Howard Asset Management 26,840 6 Man Investments 24,400 7 Och-Ziff Capital Management Group 22,100 8 Soros Fund Management 21,000 9 Goldman Sachs Asset Management 20,585 10 Farallon Capital Management 20,000 10 Renaissance Technologies Corp. 20,000 To view the complete rankings for the Hedge Fund 100, visit www.alphamagazine.com
English Eastday – Investors continued to withdraw capital from hedge funds in the first quarter of 2009, redeeming nearly 103 billion U.S. dollars, according to data released on Tuesday.
The redemption figure, about 7.3 percent of overall hedge fund assets, was down from the record quarterly withdrawals in the fourth quarter of 2008 of over 152 billion dollars, said Chicago-based Hedge Fund Research (HFR).
Total hedge fund industry capital declined to 1.33 trillion dollars as of the end of the first quarter of 2009, 600 billion dollars below the its peak at the end of the second quarter of 2008 and 75 billion dollars less than the total asset at the year-end 2008.
Reuters UK – HSBC Global Asset Management says it is finally seeing inflows into some of its hedge funds and believes it may have reached a "tipping point" after a tough period of client withdrawals.
Bill Maldonado, head of alternative investments at the firm’s active investment arm Halbis, said in an interview that the wider hedge funds industry was likely to be seeing a similar stabilisation in flows.
"We saw a lot of redemptions in the fourth quarter of last year, we saw far fewer redemptions in the first quarter of this year, and we’re now just seeing the first net inflows into some of our strategies, and I suspect that’s fairly typical," Maldonado said on Thursday.
EatrhTimes – In response to investor demand for greater transparency as well as pending new legislation, Grant Thornton LLP’s Financial Services practice is launching Hedge Fund Internal Control, Governance and Regulatory Compliance Services. These services will help funds attract new investors who might be wary of alternative investments in light of recent news. It will also assist funds in attracting and retaining investors and assets and help them prepare for pending legislation.
By the fourth quarter, Congress is expected to pass The Hedge Fund Transparency Bill of 2009, which would require investment companies or advisers that are exempt from normal registration, but have at least $50 million in assets under management (AUM), to register with the SEC. “Those funds that have already registered must be prepared for additional oversight and a more aggressive examination and enforcement agenda; those funds that have not yet registered may be required to create a complete internal control and compliance infrastructure in order to be prepared for the regulatory examination process,” said Jack Katz, national managing partner of Grant Thornton’s Financial Services practice. In addition to developing the internal control, compliance and governance facilities to comply with the new rules, firms may also be required to establish an anti-money laundering program and report suspicious activities.
New York Times – The billionaire financier Carl C. Icahn put another $250 million into his hedge fund at the beginning of the year after suffering further losses in the fourth quarter on investments in Motorola and Yahoo, according to a letter he sent to investors.
The Icahn Fund Ltd. was down about 33 percent through the end of January after plummeting 22 percent in the fourth quarter, according to the letter. After receiving more than $1 billion in redemption requests from investors, Mr. Icahn put $250 million of his own cash into the fund in November to avoid selling shares to meet the redemptions.
Trying to instill confidence in his investors, Mr. Icahn decided to make another $250 million cash injection into the fund on Jan. 1. Still, over the last five months, Icahn Capital’s funds under management have shrunk by about $2.5 billion.
The losses are likely to affect the publicly traded Icahn Enterprises fund, which reports earnings on Thursday.
Business Standard – Spooked by increasing performance losses and record investor redemptions, the global hedge fund industry saw net outflows worth $158.91 billion in the fourth quarter of calendar year 2008, the highest level since 1994.
According to a report by fund tracking firm Lipper, global hedge fund assets are estimated to have decreased from $1.5 trillion in September to $1.29 trillion at the end of December 2008.
All hedge fund sub-strategies posted negative money flows (outflows) in the three-month period with cumulative net outflows in 2008 as the industry witnessed a collapse in global equity markets, liquidity issues and failure of a number of key institutions.
In absolute terms, the performance of Credit Suisse/Tremont hedge fund index in Q4 2008 registered -10.21 per cent, the second worst quarterly performance since the start of the index. The index had posted 10.33 per cent negative returns during the third quarter. "A majority of hedge fund managers were hit by panic selling and deleveraging that followed, combined with changes in broker requirements and the enforcement of a ban on short selling in certain financial stocks," said the Lipper report.
In US dollar terms, the largest hedge fund sub-strategy outflows were experienced by long/short equity at $42.52 billion.
Associated Press – Activist hedge fund manager William Ackman is in talks with Target Corp. about naming potential directors to the discount retailer’s board, according to a Securities and Exchange Commission filing on Thursday.
Target shares gained 61 cents, or 2.2 percent, to $28.43 in aftermarket electronic trading, after gaining 23 cents to close the regular session at $27.82. The stock has lost about half of its value since peaking at $59.55 in September before the market meltdown.
In recent months, Target Corp. has suffered from a drop in consumer spending, while other discount chains — particularly rival Wal-Mart Stores Inc. — have outperformed. While Wal-Mart concentrates on offering low-price essentials, Target has focused more on a cheap-chic variety of more discretionary items like clothing and home decor.
On Tuesday, Target reported that its fourth-quarter profit fell 41 percent.
New York (HedgeCo.Net) – Hedge fund manager William Ackman of Pershing Square Capital Management is in talks with discount retailer Target to nominate some potential members to their board of directors, according to a recent Securities and Exchange Commission filing.
The hedge fund currently holds a 9.7 percent stake in the Minneapolis-based company, but has been vocal about its disappointment relating to plummeting share prices and lagging sales.
Earlier this week, Target confirmed their fourth-quarter profit fell 41 percent. Shares closed at $27.82 yesterday, a 50 percent tumble since its peak last September.
Ackman did not state how many board members he wished to nominate, or who they were. He also said he may decide to up or reduce his stake in the company, although he still believes there is plenty of potential in the retailer.
Ackman made a bold move earlier this year, when he allowed investors to withdraw as much of their capital as they liked in his Pershing Square IV Fund. The fund, which was heavily invested in Target, plunged 90 percent this year, prompting an apology to investors and a green light to clear their cash out. Ackman contributed $25 million of his personal funds to help pay back clients of the fund.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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