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Seeking Alpha - If someone was asked to name a fund in the global macro game, undoubtedly Tudor Investment Corp or Moore Capital Management would be among the most frequent responses. The global macro strategy has fared well in the world of hedge funds. Paul Tudor Jones’ Tudor Investment Corp has earned an annualized return of greater than 20% over the span of two decades.
Louis Bacon’s of Moore Capital Management shares the same accolade. And, while they are both down this year, they have fared much better relative to many of their peers and the market indexes in general. Tudor’s flagship fund finds itself -5% for the year, while Moore was -2.9% year-to-date through November as we noted in our November hedge fund performance update.
But, in a never-ending quest for outperformance, Tudor and Bacon want more. And, in order to accomplish that, they see it fit to return to their roots.
Seekingalpha.com - Moore, named after Bacon’s middle name, is a $10 billion global macro set of hedge funds. The next few funds we will be covering are global macro oriented funds, which is a switch from some of the more value oriented funds we’ve been covering, like the ‘Tiger Cub’ funds including Stephen Mandel’s Lone Pine Capital, Lee Ainslie’s Maverick Capital, John Griffin’s Blue Ridge Capital, and Andreas Halvorsen’s Viking Global.
Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund’s overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.
West Palm Beach (HedgeCo.net) - The Russian market continued to sell off in October as the global financial crisis continued to wreak havoc everywhere, according to the Pharos Russia Fund, October was the fifth consecutive month of losses for the RTS Index, and its 36% loss was the third worst month in the history of the Russian market after August 1998 (-56%) and May 1998 (-39%).
During the month of October, the Pharos Russia Fund was down 12.9%, the Pharos Gas Investment Fund was down 12.8% and the Pharos Small Cap Fund was down 27.4%. Meanwhile the MSCI Russia Index was down 35.3% over the same period. The Russian government has been extremely pro-active during the crisis with its financing and stimulus packages. Thus far, more than $200 billion has been made available to the banking sector.
The Ruble dropped against the dollar causing the sector to suffer as it was one of the most popular investment themes of the year, with both Long Only funds and Hedge Funds heavily invested into the sector. As Hedge Fund (Emerging Market, Commodities and Global Macro) deleveraging accelerated rapidly during the month, these stocks were aggressively liquidated, causing very sharp price falls.
The last week of October also saw aggressive action from many of the main government actors on the global stage - the US Fed, ECB, IMF, Central Bank of China, Central Bank of Japan and many others all took steps to inject liquidity into their respective financial systems.
In the face of all of this aggressive government action, economic statistics and corporate results continue to paint a very gloomy picture. Again, the bottom line is that while governments and central banks are stepping in with a huge amount of stimulus, the private sector is slowing rapidly and that slowdown may overrun the extensive government efforts to keep the world economy from contracting.
It will take some time before the outcome of this battle to forestall deflation is known, so the next months look certain to continue to be extremely volatile. During this time of heightened volatility, Pharos looks to a few leading indicators to inform their next moves. The oil market needs to stabilize in order to remove pressure on the ruble. Should the oil price remain around $50/barrel or below, then a 10-15% devaluation of the ruble would be useful for stabilizing the Russian economy and its markets. From these levels, both the ruble and equity markets have become extremely sensitive to the oil price.
"We are well aware that these outcomes will take time to resolve, and remain cautious as a result," Pharos says, "Our approach to risk management here is driven by the increase in realized volatility; we size our positions with an understanding that smaller capital usage generates similar market exposures to that seen prior to the crisis. Although today’s global economy is facing some enhanced probability of a calamity, the most likely outcome is that global demand ultimately is restored. Russia will be a major beneficiary of the world being saved."
Alex Akesson
Editor for 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) - One of the world’s largest hedge funds has temporarily halted redemptions according to reports. Tudor Investment Corp’s flagship portfolio, has been reported to have halted redemptions so they can segregate difficult-to-sell assets in the fund from those they can offload more easily.
Bloomberg reports that the move was made by the the fund to avoid having to raise cash in falling markets to pay out withdrawing investors. Tudor Investment Corp, the hedge fund manager established by Paul Tudor Jones, was also reported by Bloomberg as having temporarily suspended redemptions from the portfolio.
Tudor is reportedly allotting to the investors in Tudor BVI Global shares in Legacy, with a view to selling the assets in Legacy over time to hand money back to those clients.
Founded in 1980 by Paul Tudor Jones II, the firm currently manages $15.4 billion. The firm’s investment strategies include global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems.
Alex Akesson
Editor for 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!
New York (HedgeCo.Net) - Clients of Fortress Investment Group LLC have requested to withdraw more than $4.5 billion of their assets over the next few months, according a statement released by the hedge fund yesterday.
The company reported its first annual loss since going public, mostly due to its Drawbridge Global Macro funds losing over 13 percent this year through the end of September. If investors have their way, this would take a 25 percent chunk out of the total assets under Fortress’s management.
Fortress isn’t the only hedge fund dealing with a hit of investor withdraws. The sour economy and recent credit crisis has sent a wave of panic over some investors, prompting them to rush for redemptions. Some hedge funds choose to “freeze” investor withdraws until the market takes a turn for the better, or until they can figure out how to wind down the fund in an orderly manner.
Fortress said it received $2.6 billion in redemption requests for its liquid hedge funds, which include the Drawbridge Global funds and the Fortress Commodities funds. Its hybrid hedge funds, which include the Drawbridge Special Opportunities funds which saw a drop of over 7 percent in the third quarter, and the Fortress Partners funds, will lose $1.9 billion in capital because of the withdraws.
Fortress reported a third-quarter loss of $20 million, equivalent to 4 cents a share. A year earlier, they were posting a profit of around 26 cents a share. The company currently manages $34.3 billion in assets, a 2.1 percent drop from last quarter.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Seeking Alpha - Risk management Rule No.1: if it can happen then it will happen. Hope for the best but plan for the worst. Recent events have provided good returns for some hedge funds, hard times for other hedge funds but harsher times for long only. Skilled absolute return managers don’t make money every month but they do have milder and shorter duration drawdowns than index funds.
I wrote back in January that the Dow and Nikkei would likely fall below 10,000 this year as a result of the credit crisis and owning stock index option puts has indeed been the top performing strategy this year. But those were just lucky guesses. I can’t time markets so personally I’ll be focusing on funds that can preserve capital, control drawdowns and generate alpha no matter what happens.
Flight to quality? Some real hedge funds are positive for the year even when the aggregate returns for the industry are negative. Performance dispersion is enormous in such a diverse universe. Several strategies have not been affected by prime brokers imploding, changes in short selling rules or the leverage lockdown. The best managed futures CTAs, global macro and options traders have been generating absolute returns throughout the equity and credit mayhem. Strategy diversification is so important since forecasting is difficult. Transitions from one market regime to another often requires a financial revolution. Read Complete Article
New York (HedgeCo.Net) - After a disappointing year, Citadel will launch several new hedge funds in hopes of countering the losses of their main hedge fund.
The multi-strat $10 billion Kensington Global Strategies Fund has fallen over 30 percent this year. CEO Ken Griffin attributed some of that loss to the temporary ban on short selling, saying it “created material dislocations across many of our portfolios and disrupted our ability to assume and manage risk.”
After much speculation and some bad press, Griffin warned investors last week that returns on the fund would experience “significant volatility” in the next few weeks.
The new funds will focus more on global macro, convertible arbitrage and fixed income strategies, according to the Wall Street Journal.
Griffin told investors, "The financial crisis dramatically raised the cost of borrowing and reduced the availability of credit to market participants, materially reducing the value of cash assets as compared to the value of derivative instruments.” He went onto explain how he did not foresee the financial crisis that has unfolded this past year.
While the Kensington Fund will still be available to investors, many clients are interested in allocating their assets across numerous strategies.
Citadel was founded in 1990 and manages over $20 billion in capital.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Reuters - Shares in BH Macro, a listed feeder fund to the Brevan Howard global macro fund, Europe’s biggest hedge fund with assets of $20 billion, have sunk to a 13 percent discount to net asset value as a wave of selling has swept through European financial markets.
The fund was down 2 percent at 1255 pence in afternoon trading. Earlier Tuesday, BH Macro reported in a regulatory filing that its NAV at the close of business on Oct 3 was 1411 pence per share.
"The whole sector has moved to quite considerable discounts," said Mark James, executive director at RBS. "BH Macro is trading on its widest ever discount."
BH Macro has about $1.6 billion in capital. It came to market in early 2006 to provide access to Brevan Howard’s global macro hedge fund, which was and has continued to be closed to new investors.
New York (HedgeCo.Net) - The British Financial Services Authority has imposed a fine on Steven Harrison for about $93,000 after accusing him of market abuse. Harrison will not be allowed to work as a trader for the next 12 months.
According to the allegations made by the FSA, Harrison told a co-worker at the Moore Credit Fund to purchase 2 million 10.5 percent senior notes in chemical company Rhodia SA, after having received insider information from members at Credit Suisse. Harrison was contacted in September 2006 by Credit Suisse to help them establish pricing for Rhodia’s bonds.
Knowing that Rhodia would be seeking board approval for its refinancing, Harrison made the order. The fund proceeded to make about $63,000 off that knowledge, though the FSA is not condemning the actions of Credit Suisse.
The FSA also acknowledged that Harrison did not make a personal profit from those trades. Harrison worked for Moore Europe Capital Management; a subsidiary of New-York based Moore Capital Management.
Moore Capital has a long standing reputation in the states for the global-macro strategies they employ, while investing in stocks, bonds and currencies. Founded by U.S. billionaire Louis Bacon in 1989, Moore Capital manages an estimated $15 billion in assets.
This is the latest in a string of attempts by the FSA to further probe hedge funds, after passing two new rules this summer requiring disclosure about shorting stocks and regarding derivatives.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@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! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
West Palm Beach (HedgeCo.net) - Privately owned asset manager, Unigestion, has appointed Konstantinos Iordanidis as Managing Director and Head of Hedge Funds. Unigestion has $11 billion invested in hedge funds, private equity funds and quantitative equity strategies.
Iordanidis is a co-founder of Z.I. Investment, LLC, a global macro hedge fund in Chicago and former Head of Asset Allocation at Julius Baer Asset Management in Zurich from 2003 to 2005. He joins from Olympia Capital Management in Paris where he has been Co-Chief Investment Officer since 2005.
Based in Geneva, his role will be to lead the development of Unigestion’s fund of hedge funds business which comprises 43 investment professionals based in Geneva, London, New York, Paris, Singapore and Guernsey.
The arrival of Iordanidis will provide the opportunity for Bernard Sabrier, Chairman of Unigestion, and Patrick Fenal, CEO, to devote more time to the overall management of the Group focusing on the strategic direction of Unigestion over the next decade. Both will continue to have a key involvement in the fund of hedge fund business, including close relationships with hedge fund managers and Unigestion’s clients.
"It is a natural move for us to reinforce our management structure as we continue to build a multi-disciplinary, multi-cultural and multi-geographic hedge fund team delivering superior quality products to our clients in a consistent and disciplined way." Patrick Fenal, CEO of Unigestion said.
"We are proud to have attracted such a talented individual to strengthen our team." Chairman of Unigestion Bernard Sabrier added, "No doubt he and the team will build on our existing expertise and continue to provide our clients with a combination of products and client service at the leading edge of the fund of hedge fund industry."
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West Palm Beach (HedgeCo.Net) - The Directors of Cayman based Camelot Global Investments announced a management buy-out of their hedge fund, in cooperation with Merlin Global Enterprise.
Camelot will join Arkanar Financial Holdings, with the head office being relocated to Tallinn, Estonia. A branch will remain in Caymans.
The key staff members will stay, "It is important that we were able to maintain all trading and administrative staff," the board announced, "We have only lost the former majority shareholders who decided to retire and leave the industry."
Bob Torkelund has joined as Managing Director and co-shareholder, he will head the entire promotion, distribution and the servicing of funds. Torkelund will also lead the launches of new products according to market demand.
"I am really delighted to be able to be part of this young, dynamic team especially because we have been working together for a while on a consulting basis and have got to know each other very well and know where to support each other. The combination of my experience and contact network makes it a thrilling opportunity for both parties”, Torkelund said.
Apart from Torkelund, head trader Thomas Feldt and Jevgeni Geller are still shareholders and directors in the company. Having contributed largely to the past success of Camelot, they and are enthusiastic about the challenge. Geller will concentrate on business development, overseeing all operations to ensure continuity in performance and service. Feldt will continue to head the trading desk and will be responsible for investment strategy.
The investment strategy will reflect Camelot’s previous success. Feldt analyses systematic trading and global macro strategy, making adjustments in conjunction with market change in order to ensure constant development in the returns.
On September 15th 2008 Arkanar Financial will be launching their first Cayman licensed fund in cooperation with Capita Financial, Gibraltar.
One of the significant differences with non-regulated funds is that they can offer investments from as little as $10 000 and subsequent deals from $1000.
Arkanar Financial Holdings also utilises electronic clearing facilities ( Euroclear /Clearstream), accepting deals on a -payment against delivery- basis which opens basically for a large number of Europeans banks to be able to invest on behalf of their clients, a big step for the more general investment population to be able to test hedge funds without having to risk a large part of their portfolio on one position.
The initial offering period will be running till September 30th.
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New York (HedgeCo.Net) - Fortress Investment Group, who oversees more than $18 billion in assets, is starting a new hedge fund that will invest in markets throughout the Middle East and North Africa.
The new fund, Fortress MENA, is set to launch near the end of September and seeks returns of 20 percent annually, according to insider documents obtained by Bloomberg. Headed by Philippe Peres, who has run the company’s Drawbridge Global Macro funds for the past five years, the fund will use a “significant” amount of its employee’s personal capital to launch. The documents did not state how much money the fund aimed to raise up front.
Fortress MENA will deal with equities, fixed-income securities and currencies throughout regions seeking to reduce their oil dependencies. This includes countries such as Lebanon, Qatar, Pakistan and Turkey.
This will be the fifth hedge fund in the company’s portfolio. Fortress went public in February, but has seen shares decrease 36 percent this year compared to the 13 percent decline of the Standard & Poor’s 500 Index. Shares are trading almost 50 percent below their initial offering of $18.50.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@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! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com