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Reuters - Swiss private bank Union Bancaire Privee (UBP) may pull client money out of hedge funds unless they set up independent administrators, the Financial Times said on Wednesday.
The Geneva-based bank, one of the world’s largest investors in hedge funds, declined to comment on the report, which cited an internal memo to instruct managers.
Investors have blamed the absence of independent administrators as a key factor in Bernard Madoff’s success in setting up an alleged fraudulent Ponzi or pyramid scheme. Madoff was arrested earlier this month on accusations of a $50 billion fraud.
Time - Here’s one upside to a down market: a number of historically prominent mutual funds that long ago shut their doors to new investors are reopening.
It’s been years since anyone without an existing account could put money into some of the best-known names in the business, like Sequoia Fund, Dodge & Cox Stock, Longleaf Partners, Fidelity Magellan, Artisan Mid Cap Value, Oakmark Equityand Income, Vanguard International Explorer and Third Avenue Small-Cap Value.
As hedge fund titans face an intense grilling by congressional committees and thousands of hedge funds around the world close their doors, perhaps it is time to consider a new approach.
A hedge fund structure offers investors many advantages such as maximum flexibility, but the model is sure to change under all the heightened scrutiny.
After specializing in country-specific exchange-traded funds since 2002, I am convinced that there would be strong demand funds with new structures that address some of the current drawbacks of hedge funds, namely liquidity, transparency, leverage, risk management and fees.
Reuters - More hedge funds have called it quits worldwide in the first half of 2008 than a year ago, as tumbling markets and finicky investors take a heavy toll on the $1.9 trillion industry, new data show.
Liquidations rose by 15 percent during the first six months of 2008 when 350 funds closed their doors compared with 303 a year earlier, according to numbers released by Hedge Fund Research (HFR) on Thursday.
"This year, the industry will likely see more funds shut down than start up," said Phil Duff, who runs Duff Capital Advisors.
In the first eight months of the year, hedge funds lost an average 4.83 percent, making for the worst returns in a decade.
Stamford Advocate - A Greenwich hedge fund company is among hundreds of the risky investment entities that have closed or are projected to close this year amid volatile equity and commodity markets.
Turnberry Capital Management told investors last week that it will liquidate its fund and close its doors after most of the clients sought to withdraw their money, Reuters reported. The fund, which invests in distressed debt, once managed about $800 million.
"We intend to take a series of steps to liquidate the Fund and redeem all Fund investors at the same pace," fund manager Jeff Dobbs wrote in a letter to clients that Reuters obtained. "After Labor Day, we will commence a sell-down of the Fund’s security holdings in order to raise cash to fund redemptions."
Reuters- It’s turning into a busy summer for U.S. lawyers who advise hedge funds as the industry faces growing questions about potentially manipulative trading and regulators are knocking at fund managers’ doors.
With the markets in turmoil, the loosely regulated sector is under increasing scrutiny. The U.S. Securities and Exchange Commission recently sent subpoenas to more than 50 firms regarding possibly abusive trading activity.
Some funds have sought advice to be sure they are complying with the rules, which include new limits on short-selling.
Others are calling for help to set up new funds as managers try to find ways to make money in a rough market.
Forbes- Shares of railroad operator CSX Corp. may trade actively Thursday after a federal judge’s ruling opened the doors to a proxy battle later this month.
On Wednesday afternoon, the judge ruled that dissident shareholders broke the law in their effort to change CSX’s corporate structure, but did not block them from voting for their nominees to the company’s board.
Jacksonville, Fla.-based CSX had sued the two hedge funds in March, accusing them of using share swap contracts to evade federal securities filing requirements.