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.
West Palm Beach (HedgeCo.net) – Rabbe Ekholm, founder and CEO of True Beta LLC announced the launch of TrueBetaD and is holding a discussion on the importance of hedge fund replication strategies in New York September 15th.
“Institutional investors are reconsidering their traditional investment processes as hedge funds outperformed other asset classes last year, often by wide margins.” Ekholm said, “At the same time investors now require greater transparency, risk control and liquidity from their hedge fund investments. They also increasingly want to distinguish between hedge fund alpha and beta.”
Ekholm was until recently Chief Commercial Officer and a Member of the Management Board of Saxo Bank, prior to that he was a Managing Director at MSCI Barra, heading its Content Solutions Group.
“This demand is strengthening the important role replication strategies play in the investment process. These strategies allow investors access to hedge fund-like returns with cost effective fees, liquidity, transparency and without the headline risk of manager blow-ups or gates,” he concluded.
The conference is scheduled to be held at the Walek & Associates Conference Room, 317 Madison Avenue @ 42nd Street, New York, NY.
TrueBeta LLC develops and markets quantitative financial strategies for institutional clients. Hedge fund replication is its lead offering. TrueBeta is based in Greenwich, Connecticut, USA.
Alex Akesson
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Times Online – Guardian Media Group, the owner of The Guardian and The Observer newspapers, lost £24m last year on botched currency trading as it tried to protect hedge-fund investments.
The newspaper publisher, which is considering closingThe Observer, the world’s oldest Sunday newspaper, was caught out by the dollar’s rapid rise against sterling which led to a £24m loss.
The investments were made out of a £200m investment fund designed to spread GMG’s risk away from volatile advertising markets.
Sources said the fund was never intended to make a profit in its first year and the losses were the result of a ”mark to market” valuation at the end of March. However, the scale of losses from derivatives investments, which contributed to a £90m annual group loss, will alarm its left-leaning readership.
Wall Street Journal – China Investment Corp.’s $200 billion sovereign-wealth fund is reaching out to old friends in the U.S. as it ventures into hedge-fund investing.
The fund has selected Morgan Stanley and Blackstone Group LP to oversee hundreds of millions of dollars in new private-fund investments, people familiar with the matter said.
Bloomberg – Tokio Marine Holdings Inc., Japan’s biggest casualty insurer, plans to trim hedge-fund investments and shift more of its portfolio in the industry to strategies such as macro and long-short equity funds.
Tokio Marine & Nichido Fire Insurance Co., a unit of Tokio Marine Holdings with 8.4 trillion yen ($90 billion) in assets, will trim its holdings in hedge funds “slightly” this year from about 100 billion yen at the end of March, said Eisuke Shigemura, who runs the firm’s hedge-fund investment group. He declined to quantify the planned reduction.
Seeking Alpha – According to "Calpers Weighs Expanding Own Hedge-Fund Investments" by Jenny Strasburg and Craig Karmin (Wall Street Journal, April 16, 2009), the giant California pension fund may be the first stop for fledgling hedge fund managers who seek start-up resources. Described as a way to have "more control over its money," incubating hedgies would "mirror an approach the $175 billion pension fund has taken with private-equity managers."
Reuters – India Church Pension Fund has invested in Future Group backed Indivision India, Advantage Partners and IDG Accel China.
The $8 billion Church Pension Fund based in New York City has roped in Eric Mason(ex-Carlyle Group), to open a new Hong Kong office, its first in Asia, reports Dow Jones.
Mason is a former JP Morgan banker and most recently headed Carlyle Group’s Asian leveraged finance team(set-up in 2007 but disbanded in November 2008 after the credit crunch hampered its ability to raise funds). He will look after all asset classes including private equity, real estate and hedge fund investments in the continent, the report said.
Bloomberg – Mohammed Syed has spent the past seven years scouting out the best hedge-fund investments for clients of his Axiom Fund Manager Ltd. Now, he’s seeking to expand the $100 million he oversees by acquiring rivals.
“I am looking for two or even three firms that can complement my business,” said Syed, 45, who founded London-based Axiom in 2002. “A year ago most people wanted huge premiums for their businesses, but now it’s a different story.”
Hedge funds are consolidating after record investment losses and customer withdrawals cut assets by 37 percent in the second half of 2008, squeezing their main source of fees. As many as 40 percent of the 9,000 hedge funds and funds of funds may disappear in the next two years, according to Karamvir Gosal, a New York- based investment banker at Jefferies Putnam Lovell. While some will return money to investors and shut their doors, mergers and acquisitions will be more prevalent than in the past.
West Palm Beach (HedgeCo.net) – In the wake of the Madoff scandal, Tuckerbrook Alternative Investments is offering its hedge fund investors the daily market value of assets in their capital accounts.
"In light of the impact 2008 is having on the hedge fund business, transparency is the most important enhancement the industry can embrace," John Hassett, Managing Principal of Tuckerbrook, said, "Tuckerbrook has always used third-party prime brokers, administrators and auditors in order to provide independent verification of fund activity, so it made sense to us to have daily asset transparency reports distributed directly from Citi Hedge Fund Services, to underscore the importance of both independent asset pricing and more frequent transparency. Although unique in the industry now, we would expect this level of reporting to become standard practice in the future."
Moses Grader, Chief Operating Officer of Tuckerbrook, said, "Ninety percent or more of all hedge fund investments are in commingled fund structures, with only the largest investors having daily accountability through separately managed accounts. Daily transparency at the client-account level, delivered by a trusted third party, is a major step up in accountability to those investors that don’t have an SMA."
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Bloomberg - Banco Santander SA’s hedge fund unit used risk software that according to its developer may have “waved red flags” about Bernard Madoff investments.
“You definitely would have seen it,” Riskdata SA Chief Executive Officer Ingmar Adlerberg said in a phone interview from Paris. Many of the company’s 80 customers have thanked it for flagging risks linked to Madoff, he said. He refused to name them or comment specifically on Santander.
Santander offered on Jan. 27 to pay 1.38 billion euros ($1.8 billion) to private banking clients hit by Madoff-related losses through the Spanish bank’s Optimal Investment Services hedge fund arm. Geneva-based Optimal said Riskdata’s FOFiX product was key to “quantitative risk analysis” for hedge fund investments in a 30-page due-diligence questionnaire filed last April with the Alternative Investment Management Association.
Voiceof San Diego – San Diego County’s pension fund is slashing its $1 billion hedge-fund portfolio and acknowledging that the investments it once championed have become too risky and no longer make sense.
The board of the San Diego County Employees Retirement Association voted unanimously Thursday to reduce the size of its hedge-fund portfolio by more than half. That will free up $600 million, half of which will be held as cash. The rest will be reinvested in the portfolio.
The pension board also agreed to curb the aggressive strategy the $7.5 billion fund used to finance its hedge fund investments. Under the "alpha engine" strategy, the county bought financial derivatives known as swaps that were essentially bets on the market. Much like bets on a Chargers game, the swaps cost nothing initially, which freed up cash for hedge fund investments. When the market rose, the swaps made money, but in recent months, they cost the pension fund millions of dollars. Last month, the board voted to free up $100 million in cash to protect against further declines.
