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) – Hedge fund manager Meridian Global Fund Services Group has launched a hedge fund consulting affiliate team with Joyce E. Heinzerling as head.
The affiliate, Meridian Fund Advisers LLC, will provide hedge fund regulatory and corporate governance best practices advice to hedge funds both within and outside of the Meridian Global client base. In this capacity, Heinzerling will work side by side with her extensive network of leaders in the hedge fund legal and accounting fields.
“As President of Meridian Fund Advisers, Ms. Heinzerling will lead the development and delivery of our new hedge fund consulting affiliate, and help bring us to a position of distinction in the hedge fund administration industry in terms of a value add for our clients," said Randy Troy, President of Meridian Fund Services (USA) LLC.
"Meridian Fund Advisers essentially has been established to broaden and strengthen our dedication to clients in an effort to provide the highest level of client service in light of the increasingly complex issues that now arise in the hedge fund industry resulting from the heightened regulatory environment and exposure to litigation," Mr. Troy added.
Heinzerling joins Meridian Fund Advisers after serving nine years as General Counsel, CCO and Head of Operational Due Diligence at Archery Capital LLC, an investment adviser to emerging manager funds of funds. Prior to joining Archery Capital, Ms Heinzerling spent fourteen years in private practice advising hedge funds, venture capital funds, private equity funds, and mutual funds.
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New York (HedgeCo.Net) – Over $84 billion worth of U.S. hedge funds shut down last year, compared to just $18.7 billion in 2007, according to the latest data published by Absolute Return Magazine, a unit of HedgeFund Intelligence. More than 200 funds closed up shop in 2008, with 20 percent or $16 billion of those assets deriving from Madoff feeder funds.
The largest fund closure was Fairfield Greenwich Group’s Fairfield Sentry fund, which once managed $6.9 billion in assets, and fed almost all of their investments to Madoff funds. The other major Madoff feeder funds that faltered included Tremont Group’s Rye funds, which once managed $3.1 billion and Kingate Management’s Kingate Global Fund which was worth about $2.7 billion.
The largest failure unrelated to the Madoff scandal was Drake Management, who was forced to close funds that once oversaw $4.7 billion. Citigroup’s Old Lane Partners, another Multi-strategy hedge fund founded by its Chief Executive Vikram Pandit, decided to liquidate after unimpressive returns and mounting write downs by the bank. It once managed $4.4 billion in assets.
Here are the top 10 hedge fund closures of 2008 according to Absolute Return Magazine:
1. Fairfield Greenwich Group, Fairfield Sentry
Madoff feeder fund
6.9 Billion
2. Drake Management, Global Opp, Low Volatility, Abs. Return
Macro/Multi
4.7 Billion
3. Citigroup, Old Lane Partners
Multistrategy
4.4 Billion
4. D.B. Zwirn, Zwirn Special Opp. Fund
Multistrategy
4.0 Billion
5. Tontine Capital Management, Tontine Capital, Tontine Partners
Equity Long/Short
4.0 Billion
6. Ospraie Management, Ospraie Fund
Commodities
3.8 Billion
7. Highland Capital Management, Crusader, Highland Credit
Bloomberg – Bennelong Funds Management, an Australian fund manager with A$400 million ($271 million), will start a second hedge fund to ride through the financial crisis as it seeks to more than double funds under management.
Melbourne-based Bennelong wants to boost the assets it oversees to A$1 billion in the next three years, Jarrod Brown, chief executive officer, said yesterday in an interview in Sydney. Bennelong teamed up with Security Global Investors LLC to offer a long-short global equities fund in coming weeks to follow a long-only global fund the two began this month, he said.
SGI will manage the global funds under the Bennelong SGI name to gain access to Australia’s A$1.2 trillion dollar pool of managed funds after the $1.36 trillion hedge fund-industry shrank by more than 20 percent last year, and averaged losses of about 19 percent, the worst year on record.
West Palm Beach (HedgeCo.net) – Mike Griffin of Spectrum Global Fund Administration has launched the a hedge fund website that he believes will improve hedge fund transparancy, HedgeACT.com.
“As a former hedge fund executive, I know first-hand how important transparency is during the capital allocation process,” said Michael Griffin, founder and CEO of HedgeACT and Chief Operating Officer of Fenchurch Capital Management from 1985 to 1998. “This is a difficult time for many hedge fund investors, and we think that giving them better information will make the entire analysis and allocation process much better for everyone involved.”
The “ACT” in HedgeACT.com refers to the site’s three key benefits for the hedge fund community, including Analytics, Capital Introduction and Transparency.
Providing investors with free access to hundreds of data points and analytics for over 7,500 hedge funds, HedgeAct’s data is licensed from Morningstar.
Additionally, hedge funds and hedge fund administrators will have the ability to augment this data with their own timely, vetted information on fund performance, track record and other important investor criteria.
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West Palm Beach (HedgeCo.net) – Privately-owned investment management company, SVM Asset Management, is seeking approval from the Financial Services Authority for the launch of the long/short SVM UK Absolute Alpha Fund, which has a similar investment approach to their SVM Saltire fund, which returned +19.7% in 2008.
The fund, if approved, will have the flexibility to move from a net long to a net short position differentiating it from other absolute return funds, the company says. Managed by Colin McLean, returns will be driven by stock selection and the net position of the fund will be determined by whether the manager has more long or short stock ideas at the time.
"In 2008 just 31 of the stocks in the FTSE All Share ended the year higher, and 580 were down. It is therefore not surprising that few long only managers were able to profit," McLean says, "Without question this year will be challenging for the economy. However, at a company level there will be winners and losers and fundamental stock picking skills will be required to identify them."
The focus will be on generating positive returns over the long term rather than positive performance each month, as such SVM believes the appropriate time frame for investing in the new fund is at least three years.
Based in Edinburgh, SVM focuses principally on global fund of funds, UK and European equities.
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West Palm Beach (HedgeCo.net) – In an example of how hedge funds and CTAs are turning to third-party administrators with an eye on offering their investors improved transparency, hedge fund and FoHF provider Spectrum Global Fund Administration has teamed up with with AlphaMetrix LLC, a managed futures investment platform.
AlphaMetrix says it chose Spectrum for their "ability to easily provide estimated daily NAVs and to facilitate semi-monthly liquidity, critical differentiators at a time of heightened investor sensitivity regarding alternative investments." The platform will provide investors with access, research and real-time performance reporting to managed futures funds and commodity trading advisors (CTAs).
“The AlphaMetrix value proposition is built on what we call ‘TLC,’ which stands for transparency, liquidity and custody,” said Aleks Kins, founder and CEO of AlphaMetrix. “In partnering with Spectrum, we have selected the only fund administrator that can produce the estimated daily NAV reporting our clients demand, and handle the increased complexity associated with more frequent liquidity.”
Currently, client assets allocated over the AlphaMetrix Platform total approximately $1.7 billion, which includes both direct investments and managed account tracking.
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New York – GFX Alternatives LLC, a member of the Global Fund Exchange Group, today announced the formation of a new multi-manager portfolio to invest in the dynamic alternative energy investment sector.
GFX Alternatives is dedicated to a diversified, global macro, multi-manager approach to allocating assets to premier investment managers who specialize in a broad spectrum of alternative energy opportunities. The firm is led by a management team of veteran hedge fund executives, Lauralouise Duffy and Anric Blatt, and will accept outside investors at the end of the first quarter 2009.
“Throughout the world there is an energy revolution occurring that is driving public and private investments into the alternative energy arena,” said Lauralouise Duffy, CEO, GFX Group LLC. “Investments in alternative energy solutions are aimed at achieving energy independence while reducing environmental damages. Governments, quasi-governmental organizations, states, countries, corporations and consumers around the world are implementing critical changes to transform their use and selection of energy resources.”
The world of energy and the investment world are on the brink of an evolutionary chapter in history. GFX Alternatives seeks to focus its private investment capabilities on the nascent and necessary development of energy alternatives and the evolutionary opportunities that accompany the changing face of global energy.
“Increased spending in alternative energies and renewable resources will cause significant economic growth and prosperity for the companies embracing this change, yet very few asset management companies exist to explore, develop and profit from this phenomenon,” said GFX Chairman Anric Blatt. “The GFX team has unique and extensive experience investing in and hedging allocations to the energy and resources sector. The firm is uniquely positioned to take advantage of extraordinary opportunities in this burgeoning corner of the investment world.”
GFX Alternatives aims to cap assets in this strategy at $1 Billion and will permit its clients to take direct investments into clean tech, carbon/emissions trading, water supply and treatment, as well as energy specific traders and Commodity Trading Advisers (CTAs).
GFX Alternatives LLC will present its investment strategies and business opportunities inside the USA Pavilion of the World Future Energy Summit in Abu Dhabi, United Arab Emirates, from January 19th- 21st, 2009. The summit will be the largest meeting of influential leaders within the renewable energy industry and is expected to draw over 15,000 attendees. More information on the summit can be found at http://www.worldfutureenergysummit.com.
About GFX Alternatives LLC
GFX Alternatives LLC, a member of the Global Fund Exchange Group (GFX Group LLC), is an alternative investment management business that is focused on the alternative energy and renewable resources sectors. GFX Alternatives specializes in manager due diligence and selection, macro overlay of hedging, asset allocation, portfolio management and independent risk monitoring across all asset classes and managers in its portfolio. The founders have a combined 30 years of experience in starting, building and operating investment management businesses. The firm’s mission statement is “People, Planet, and Profit.”
About the Management Team
Lauralouise Duffy has worked as CEO of the GFX Group since 2006. As CEO, Ms. Duffy built an alternative investment platform service business, offering consulting, independent fund support, and structuring services to a wide range of hedge funds, fund of funds and institutional clients. In September 2007, she acquired the GFX Group. In 2008, the firm launched GFX Alternatives, a company dedicated to the alternative energy and renewable resources sector. Ms. Duffy spent 15 years on Wall Street working in the capacity of CEO, COO and managing director in the hedge fund community. Ms. Duffy was founder and president of Golden Retriever Capital, a global strategic development firm, consulting to major financial institutions in the alternative investment arena. Previously, Ms. Duffy spent her career running the operations, administration and distribution of eleven hedge funds, building and running investment fund businesses for Europe, Eastern Europe, Russia, Asia and South America, including equity, global macro, emerging markets, venture and private equity businesses. She was partner and COO of FNY Capital, LLC and Argonaut Capital Management and also worked for EGS Capital Management and Croesus Capital Management.
Anric Blatt, chairman, has been with the GFX Group since its founding in 2005. His principal areas of focus include strategy allocation, portfolio management, manager research and due diligence, as well as new product development and structuring. Mr. Blatt has performed extensive research and due diligence on hedge fund managers for over twelve years, and has been instrumental in the development and management of a number of successful investment vehicles both private and public. Prior to joining GFX, Mr. Blatt was the founder, CEO and chairman of the Infiniti Capital Group where he was involved in all aspects of building the business including product development, branding, portfolio management and research. During his tenure as CIO and CEO of the firm, he and his team successfully created and managed twelve public investment funds, a capital markets and securitization business and a hedge fund research organization. He was responsible for a portfolio of investments in excess of $2 billion AUM. Previously Mr. Blatt was the regional director in Asia for the qualitative fund of funds group Forsyth Partners and built the Asian business for managed futures specialist Kenmar.
Bloomberg - Jean-Marie Eveillard, who beat 99 percent of rival equity fund managers last year by hoarding cash instead of borrowing it, is loading up on Japanese insurers and Hong Kong developers.
“Leverage eliminates your staying power,” said Eveillard, whose $16.8 billion First Eagle Global Fund beat the Standard & Poor’s 500 Index every year this decade. “If things go well, you look even better, but if things go badly, you end up doing worse,” he said in an interview from his office at Arnhold & S. Bleichroeder Advisers LLC overlooking Central Park in New York. “You could blow up if big leverage is being used.”
