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.
Moneybiz – Liberia has bought back $1.2-billion in government debt at a steep discount, the World Bank, which helped finance the buyback, said on Thursday.
The impoverished African country has "significantly reduced its foreign debt" at a discount of nearly 97 percent of face value, "the steepest ever negotiated on developing country commercial debt," the World Bank said.
The multilateral development lender said the deal, capping two years of negotiation, was concluded with the payment of $38-million to retire 25 outstanding commercial claims.
Forbes – The cost of protecting Japanese government debt against default has risen sharply as political uncertainty and worries about the nation’s fiscal position grew after data this week highlighted the depth of recession in the world’s second-biggest economy.
But traders say the market is quite illiquid and dominated by foreign investors such as hedge funds.
Japanese players do not believe the government would default on its debt and seldom buy protection for their holdings of Japanese sovereign bonds.
Seekingalpha.com – As more investment pros warn of a bubble in Treasuries, State Street Global Advisors is launching an intermediate-term bond exchange-traded fund focused on investment-grade corporates and government debt.
The SPDR Barclays Capital Intermediate Term Credit Bond ETF started trading on Wednesday. It’s expected to come with an annual expense ratio of 0.15%. It will follow an index of more than 2,500 bonds and a weighted maturity of 5.2 years.
While ITR enters an investment-grade intermediate bond field with a few established competitors, the new ETF does track an index that offers somewhat different investment features than its rivals.
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.
Reuters – The Turtle Fund, an $80 million Swiss-based hedge fund trading volatility, has stopped trading and will let investors exit after sharp losses, following a disagreement between the fund’s managers. In a note to investors, seen by Reuters, the fund said it lost 8.7 percent in September and 14 percent in October — its worst-ever monthly performance.
That took year-to-date returns, which had been in positive territory, to around a 13 percent loss.
On October 10 alone, there was a 14-percent loss, which the note said was caused by a "disagreement within the team concerning the hedging strategy."
"Our third partner … by virtue of his majority stake in the company revoked our trading authority and liquidated all existing positions at the … worst possible moment, arguing to protect his clients from further losses," it said.
Reuters – Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed.
Asia-focused hedge funds received a net $530 million from investors in the April-June quarter, down from $1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.
Asian hedge funds grew by approximately $200 million to $100.48 billion, up just 0.25 percent from the first quarter, as inflows were mostly offset by a decline of nearly $320 million due to poor performance.
"Asian hedge fund investors reacted to continuing market volatility by adjusting allocations opportunistically to those regional markets that had posted sharp year-to-date losses," said Kenneth Heinz, president of Hedge Fund Research.
West Palm Beach (Hedgeco.net)- The Greenwich Global Hedge Fund Index(GGHFI)reported May returns of +2.01% while the Greenwich Composite Investable Index returned +1.66%. The May Index currently includes 1345 constituent funds.
By comparison, the S&P 500 showed gains of +1.29%, while MSCI World Equity and FTSE 100 indices posted returns of +1.11% and -0.56%.
"Across the board, hedge funds performed well in May. But the real story is told when comparing year-to-date performance," notes Margaret Gilbert, Managing Director. "Hedge funds are positive for the year compared to the major equity indices which still remain negative."
For the second month in a row, Long/Short Equity managers were the best performing strategy group, posting a gain of +2.35%. Directional Trading managers, the best performing strategy group so far this year, exhibited another strong month, returning +2.00%.
Specialty Strategy managers were the second-best performing strategy group, returning +2.10% on average. The Market Neutral Group averaged +1.39% on the month as Event Driven managers continued to find opportunities in uncertain markets.
