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.
Financial Standard – It will take the global hedge fund sector another four years to recover assets lost since 2007, but its year-on-year growth will be faster than that of the managed fund sector, new research shows.
According to Cerulli Edge, global hedge fund assets will grow at a 12.1 per cent compound rate each year between 2009 and 2013.
By 2013, the sector will be back to 2007 levels of US$2.9 trillion. Last year, the sector shrunk to US$1.9 trillion last year versus US$2.9 trillion in 2007.
ninemsn – Administrators for the main European unit of bankrupt US investment bank Lehman Brothers Holding Inc have revealed plans to return frozen hedge fund assets to creditors.
This could start as early as next year.
PricewaterhouseCoopers, Lehman Brothers International Europe’s administrator has applied to the British High Court to block any creditor claims for assets after the end of this year, PWC said on Wednesday
This could mean the administrator would start returning funds as early as the first quarter of 2010.
Bloomberg – Lehman Brothers Holdings Inc. may return hedge-fund assets as soon as next year that were frozen when the New York-based securities firm collapsed in the largest bankruptcy on record.
PricewaterhouseCoopers, Lehman Brothers International Europe’s administrator, plans today to ask a U.K. court to block any creditor claims for assets after this year, the accounting firm said in a statement. That would allow PwC to return money Lehman had held in trust for fund managers as soon as the first quarter of 2010.
Khaleej Times – Hedge fund assets may be on the rebound after a year of massive redemptions, Goldman Sachs Group Inc Chief Financial Officer David Viniar told analysts on Tuesday, although the prime brokerage business will remain under pressure.
“Assuming (hedge fund) performance stays OK — which it has been through the first half of this year — it feels like we are pretty much through the redemption cycle, and it actually looks like you are going to start to see some money flowing into hedge funds,” he said during a conference call.
The hedge fund business suffered record withdrawals at the end of 2008 as markets imploded, sending the industry’s assets under management down by about 40 percent.
HedgeCo.net (West Palm Beach) – ALTIN, the London and Swiss-listed fund of hedge funds, has released a full disclosure of its underlying investments and weightings. ALTIN has adopted a position of total transparency, and holds one of the world’s longest track records as an exchange-listed fund of hedge funds.
ALTIN has reduced its cash allocation from 14% on 1 March 2009 to 6.3% on 1 July 2009, as part of an active investment programme into hedge funds to benefit from the current investment opportunities. The portfolio, featuring more than 30 underlying funds representing 10 different strategies, is particularly well diversified and boasts a positive performance of +5.18%[1] to date in 2009.
Only approximately 20% of funds held by ALTIN have restricted redemptions of one form or another. This relatively low proportion does not affect ALTIN as, being a fixed-capital investment company, it is not faced with redemption requests.
The portfolio’s great liquidity allows the investment manager to perform a dynamic management and benefit from the current investment opportunities. The manager has thus launched a significant investment programme in the past months.
ALTIN AG was launched in December 1996 and has been listed on the Swiss Stock Exchange since its inception as well as on the London Stock Exchange since 2001. ALTIN is a multi-strategy fund of hedge funds investing in more than 30 hedge funds representing various investment styles. The Company holds one of the world’s longest track records as an exchange-listed fund of hedge funds. Its objective is to generate an absolute annual return in US dollars terms with lower volatility than equity markets.
ALTIN is managed by 3A SA (Alternative Asset Advisors), a management firm specialised in alternative investments and member of the SYZ & CO Group.
3A currently manages more than USD 2.1 billion in hedge fund assets. 3A also provides alternative research and due-diligence services on an additional USD 4 billion in alternative investments.
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June 17 (Bloomberg) – Felix Chee, an adviser to China’s $200 billion sovereign wealth fund, said it aims to make investments in hedge funds.
“We will have a preference for managed accounts,” he said in an interview today at the GAIM International hedge fund conference at Monaco’s Grimaldi Forum. “The platform would like a core of single-manager funds and fund-of-funds.”
Chee, who said he will initially run China Investment Corp.’s hedge fund and proprietary trading effort, is a special adviser to the chief investment officer of CIC.
“It’ll be across the spectrum of strategies,” he said. “We’re looking for the best managers and a handful of fund of funds, and when I say handful I mean five or less.”
Chee previously managed the University of Toronto’s endowment, where he managed a portfolio of about $1 billion in hedge fund assets. Asked if he was daunted by the prospect of running a $200 billion portfolio, he said “I try not to look at the zeros.”
Financial Standard – Pension funds around the world are expected to pump up their $547 billion hedge fund allocation by more than $60 billion before December as they look to balance assets and liabilities, new research shows.
Hedge fund managers are expected to heap an extra $63 billion into their coffers from pension funds and family offices.
But insurance companies, private banks, endowments and foundations are all likely to decrease their allocations to the sector, according to Barclays Capital.
The report, which surveyed 300 investors and 100 hedge fund managers representing $873 million of hedge fund assets, noted investors were ready to aggressively allocate their cash balances but will demand liquidity in the process.
Bloomberg – Daniel Och had about 35 percent of his $20 billion of hedge-fund assets in cash during the first quarter because he suspects global stock markets will start falling again.
“The world will not just bounce back to where it was,” Och, the 48-year-old chief executive officer of New York-based Och-Ziff Capital Management Group LLC, wrote last month in a letter to investors, referring to the gain of almost 35 percent in the Standard & Poor’s 500 Index since March 9. “We continue to believe that economic recovery will be a long process.”
OZ Master, Och-Ziff’s biggest hedge fund, rose 6.3 percent this year through April after losing 15.5 percent last year. The S&P 500 fell 3.4 percent in the first four months of 2009 after dropping 38 percent in 2008.
Barron’s is out with its annual hedge fund 100 list and we wanted to post up all the media relating to it. Barron’s mentions that hedge fund assets plummeted from $1.9 trillion to $1.4 trillion throughout the course of 2008. That is a staggering number, but it definitely highlights the real problems the industry had during the year. While redemptions were fierce over the last year, reports are out saying that nearly 80% of redemption activity was high net worth and retail investors, rather than institutions. This will definitely be interesting as it could affect the health of the industry moving forwards. If institutions suddenly drop their allocations to hedge funds, then there will be big ramifications across the industry.
Reuters – Hedge fund assets under management around the world have probably fallen below $1 trillion, a top executive at hedge fund New Finance Capital LLP (NFC) said on Thursday.
"There has been an enormous contraction in this industry. The industry is much, much smaller this year," NFC co-Chief Executive and co-Chief Investment Officer Marc Hotimsky told a briefing for reporters.
Assets under management were by now "probably slightly below $1 trillion," he said.
Saudi Gazette – By end of 2013, Middle East investors will account for about $194 billion in hedge fund assets, or about 7.5 percent of total global hedge fund assets, a new global study of institutional investors, investment consultants and hedge funds released on Monday by the Bank of New York Mellon and Casey, Quirk & Associates, said.
This is an almost 30 percent increase on 2007, when the Middle East accounted for about $109 billion, or a 5.8 percent share.
West Palm Beach (HedgeCo.net) – Hedge fund assets under administration (AuA) have grown to $91 billion as of 31 March 2009 from $88 billion at 31 December 2008, according to hedge fund tech. and analytics procider GlobeOp Financial Services S.A.
"I am encouraged by the level of fund inflows during the first quarter of 2009." Hans Hufschmid, chief executive officer, said, "New clients with AuA of nearly $12 billion, along with new funds from existing clients of $5 billion and subscription inflows of $3 billion, offset first quarter redemptions and terminations, which we knew would be substantial, as referenced in our 2008 preliminary results announcement."
"In addition," Hufschmid continued, "client fund performance generated over $1 billion, a positive sign that hedge fund managers may have begun adapting to the changing market environment."
GlobeOp noted a sustained investor demand for greater transparency, independent portfolio verification and control of capital. Fund managers are looking for operational solutions to meet these requirements and to improve their own operational cost structures that are challenged by redemptions and lower fees.
"Funds will remain under pressure from redemptions by investors and raising new capital will continue to be challenging. Thus, while GlobeOp’s current pipeline for new business is promising, we remain focused on prudent cost management and productivity improvements."
With headquarters are in London, New York, Dublin, Ireland; George Town, Cayman Islands; Harrison and Yorktown Heights, NY and Hartford, CT, U.S.A.; and Mumbai (Bombay), India, GlobeOp serves more than 180 clients worldwide, representing $91 billion in assets under administration (AuA).
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