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) – Third Avenue Management LLC, the investment adviser to the Third Avenue Funds has launched the Third Avenue Focused Credit Fund, capitalizing on credit, distressed and value equity investing.
“The current market environment provides attractive opportunities for experienced credit pickers like Third Avenue Management to generate meaningful returns,” David Barse, Chief Executive Officer of Third Avenue Management, said, “Portfolio Manager Jeff Gary and Senior Research Analyst Thomas Lapointe will lead the effort of managing the new fund.”
Prior to joining Third Avenue, Gary was at BlackRock Financial, which he joined in 2003 as the Portfolio Manager and head of the high-yield and distressed investment team which managed approximately $17 billion in assets in various mutual funds and institutional accounts.
Lapointe will focus on identifying and researching opportunities in high-yield and bank loan investments. Lapointe has over 17 years of investment experience and was previously responsible for managing approximately $6 billion in high-yield assets, as Co-Head of High-Yield Investments for Columbia Management.
“Third Avenue’s style emphasizes credit selection, total return and a deep value approach,” Gary said, “Our opportunistic mandate allows us to invest in a wide range of credit securities – including bank loans, high-yield and convertible securities – that have the best risk-adjusted return potential which distinguishes the Fund from typical high-yield funds.”
The fund will offer two classes of shares, Third Avenue Focused Credit Fund Investor Class, and Third Avenue Focused Credit Fund Institutional Class.
Third Avenue Management has approximately $14 billion in assets under management and offers value-oriented strategies through mutual funds, UCITS, separate accounts and alternative investment vehicles.
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!
Forbes – Global fund of hedge funds firm FRM Capital Advisors (FCA) said on Tuesday it will invest up to $60 million in New York-based asset manager WestSpring’s first fund.
Specialist hedge fund seeder FCA said the investment is part of a strategic tie up with WestSpring, which is scheduled to launch the fund in September. The firm will try to combine fundamental and quantitative approaches to credit analysis.
‘We are confident in WestSpring’s ability to build a high quality alternative investment business and we believe this strategic relationship is a great opportunity for our investors,’ said Clive Peggram, chief executive of FCA.
Reuters – Global fund of hedge funds firm FRM Capital Advisors (FCA) said on Tuesday it will invest up to $60 million in New York-based asset manager WestSpring’s first fund.
Specialist hedge fund seeder FCA said the investment is part of a strategic tie up with WestSpring, which is scheduled to launch the fund in September. The firm will try to combine fundamental and quantitative approaches to credit analysis.
Reuters India – Global fund of hedge funds firm FRM Capital Advisors said on Tuesday it will invest up to $60 million in New York-based asset manager WestSpring’s first fund.
Specialist hedge fund seeder FCA said the investment is part of a strategic tie up with WestSpring, which is scheduled to launch the fund in September. The firm will try to combine fundamental and quantitative approaches to credit analysis.
”We are confident in WestSpring’s ability to build a high quality alternative investment business and we believe this strategic relationship is a great opportunity for our investors,” said Clive Peggram, chief executive of FCA.
Seeking Alpha – With the news getting worse and worse for the hedgies (e.g. Fortress, Thomas Lee, D. E. Shaw), it’s time for a rethink on hedge funds.
For hedge fund investors: You probably went into them believing that they were uncorrelated absolute return vehicles, or pure alpha. Isn’t it funny how correlations all go to 1 in times of crisis? Maybe it’s time to return to your roots and understand the role of alternative investments in your portfolio.
For hedge fund managers: The really successful ones began fifteen or twenty years ago as small, nimble, guerilla investors. Somewhere along the way the guerillas came down from the hills, got big and became the government. Maybe it’s time to return to the hills again.
Investors thought hedge funds were the panacea when the hedgies showed positive returns in the post-Tech bubble crash. Ultimi Barbarorum writes:
Last time we had a bear market, hedge fund fortunes were made. Andor Capital, William von Meuffling, Crispin Odey, Chris Hohn, even Jim Cramer when he was trading, all made out like bandits producing 20-50% returns on the short side in 2000-2002, many after having doubled their money by being long in 1999.
The Associated Press – College endowments and state pension funds plowed billions of dollars into hedge funds and private-equity investments as a way to balance their stock holdings, and for a time they got supercharged returns.
Those days are over. From Harvard University to the state pension fund of California, officials are watching the value of their alternative investments shrink.
So far, the losses are mostly on paper, but analysts say they could eventually lead to reduced payouts to retirees, higher taxes so state governments can fulfill their promises, or less cash available for colleges to give out financial aid.
Denver Post – College endowments and state pension funds that once plowed billions of dollars into hedge funds and private-equity investments as a way to balance their stock holdings officials are watching the value of their alternative investments shrink.
So far, the losses are mostly on paper, but analysts say they could eventually lead to reduced payouts to retirees, higher taxes so state governments can fulfill their promises, or less cash available for colleges to give out as financial aid.
In recent years, endowments and pensions heaped cash into hedge funds — private investment funds that often use unconventional and risky trading strategies. They also bought into private-equity funds, which make direct investments into private companies or buy them out.
GENEVA (Reuters) – Union Bancaire Privee (UBP) aims to reinforce its presence in the hedge funds segment as rivals feel the pressure from the prolonged financial crisis, a senior bank official said on Tuesday.
"Only the best will survive and will be able to seize the space left vacant by others," said Jan Erik Frogg, head of alternative investments at UBP, told Reuters.
"There will be some unique opportunities."
The hedge fund market is going to contract by 30 percent to 35 percent as the financial crisis prompts investors to flee risky assets, UBP predicts.
New York Times – Some of the nation’s universities are trying to sell chunks of their portfolios privately as their endowments swoon with the markets.
Among institutional investors, school endowments aggressively embraced private equity, real estate partnerships, venture capital, commodities, hedge funds and other so-called alternative investments over the last few years. Endowments with more than $1 billion in assets reported 35 percent of their holdings in these types of investments on average last year, a much greater portion than big public pension funds, for example.
West Palm Beach (HedgeCo.net) – According to a report in the Financial Times, London hedge fund manager Alan Miller has returned to the industry after a two-year absence by becoming a partner at SilverStreet Capital, a small London fund of hedge funds manager.
Miller, who co-founded New Star Asset Management with John Duffield in 2001, went on a sabbatical in 2006 following a bitter and highly public divorce battle. His absence from the UK fund manager was made permanent in February last year, the FT report said.
SilverStreet Capital is an asset management firm specialising in alternative investments, including hedge funds, private equity and property management.
Alex Akesson
Editor for HedgeCo.Net Email: 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!
West Palm Beach (HedgeCo.net) – Morningstar and Barron’s today released highlights of a recent national survey examining the perception and usage of alternative investments among institutions and financial advisors.
“Our survey found that both institutions and advisors want alternative investments that are liquid, transparent, and regulated like traditional investments,” said Steve Deutsch, director of separate accounts and collective investment trusts at Morningstar. "We conducted this survey during one of the worst market downturns in history, where traditional U.S. and international investments plummeted and almost no alternative investments provided safe haven."
"One particularly interesting survey result was that against this backdrop, the majority of both advisors and institutions still reported that they expected to increase usage of alternative investments in the future, and they believed alternative investments will continue to grow in importance versus traditional investments," Deutsch added. "Recent poor performance of alternatives has not caused advisors or institutions to question their usage."
Among the survey findings are that for institutions limited partnerships, including hedge funds, direct real estate, and private equity, are the most popular alternative vehicles for institutions.
Almost half of institutions surveyed allocate more than 10 percent of their portfolios to alternative investments, and nearly 20 percent allocate more than 25 percent of their portfolios to alternatives. Institutions generally expect their portfolio allocations to alternative investments, particularly hedge funds and private equity, to increase over the next five years. Close to a quarter (23 percent) of institutions expect to invest more than 25 percent of their portfolios into alternatives.
The survey shows that advisors are predominantly investing in alternative investments through liquid, regulated, and transparent vehicles like mutual funds and exchange-traded funds (ETFs), but they’re also employing other non-traditional investments with their clients, like oil and gas limited partnerships, non-traded Real Estate Investment Trusts (REITs), church bonds, and equipment leasing.
Among advisors who work with average individual investors, almost 80 percent use alternative investments with some clients. About 40 percent of advisors had more than half of their higher-net-worth clients in some alternative investments.
Morningstar and Barron’s conducted the Internet-based survey in October 2008; 252 institutions and 1,180 financial advisors participated. The complete survey results appear in the Nov. 10 issue of Barron’s.
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Reuters – In spite of suffering more than most markets in the global downturn, hedge funds are likely to bounce back faster than other markets.
That is the view of Barclay’s Capital director Frank Gerhard whose company is a major player in the regional hedge fund market and is in the process of launching a Sharia-compliant hedge fund platform along with Sharia Capital.
"We have been running a roadshow around the region and there is still a lot of institutional and high net worth individual interest in the sector.
"What we are likely to see is hedge funds bouncing back in the first quarter of next year even if equity markets remain depressed.
"Each time there is a major market downturn, like the Asia crisis of 1998 or the slump after the dotcom bubble burst, we have seen alternative investments like hedge funds bounce back far quicker than other investments.
