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.
PR Inside – “Hedge fund managers naturally seek international as well as national investors. To continue to do so in today’s evolving regulatory environment, managers are likely to need to establish operations in the EU for EU domiciled investors, in the US for US investors and offshore for international investors,” said Ogier partner Peter Cockhill.
Citing the various reports and legislative proposals put forward by governments and global regulatory bodies such as the OECD and IOSCO, and tracing these proposals back to their origins, the Ogier seminars drew several conclusions as to potential results.
“Transparency is the new paradigm,” added James Bergstrom. “In the near future only those offshore financial centres (‘OFCs’) which meet the regulatory and tax transparency requirements of the new Financial Stability Board will be permitted to participate in the international financial system.”
Journalism.co.uk – The Financial Times has appointed Sam Jones as hedge fund correspondent. In his new role, Jones will be in charge of covering the global hedge fund industry.
"Hedge funds are in a state of crisis: they are hugely secretive and facing extremely tough times as governments move in with new regulation and banks pull back their lending operations," he told Journalism.co.uk.
The Ledger – The financial crisis has ravaged many a Wall Street giant, but it has also produced a handful of winners. BlackRock, a money manager that is much admired but little known outside financial circles, is fast emerging as one of the nation’s financial powerhouses.
BlackRock, which started in a one-room office 21 years ago, now manages $1.3 trillion in assets for big private clients, including hedge funds and foreign governments.
But it is the company’s highly prized role as a government adviser and contractor that is now drawing attention.
Reuters – Bridgewater Associates Inc, one of the world’s biggest hedge-fund managers, said on Tuesday it might be interested in participating in the U.S. Treasury’s public-private investment program, calling it a "big transfer of money from the government to the banks and to the buyers."
Bridgewater manages roughly $80 billion in global investments for a wide array of institutional clients, including foreign governments and central banks.
In a letter to clients, Bridgewater said its interest in buying the distressed assets under the terms being offered would depend on the pricing and on "whether we can get over our fears of partnering with the government."
New York Times – Hedge funds and the rest of the so-called shadow banking system are almost certainly going to face more regulation. But governments should not try to supervise them directly; instead, it would be far more productive for governments to monitor how they borrow to leverage their investments.
The political momentum for regulating shadow banks is building in advance of a meeting in April in London of representatives of the Group of 20 economies. That much is clear from the European leaders’ meeting over the weekend.
Reuters – Suspected insider trading cases reached an all-time high last year, driven less by hedge funds and more by pillow talk between relatives and friends, the head of surveillance at the New York Stock Exchange said on Wednesday.
In a year when bombshell revelations rocked bank stocks, governments outlawed short-selling, and panicked investors brought on the worst market rout since the 1930s, there was much to tempt those with privileged information.
NYSE Regulation, the Big Board’s oversight body, referred 146 cases of suspected insider trading to the U.S. Securities and Exchange Commission in 2008, five more than in 2007, the previous record year, and more than twice as many as in 2004.
Los Angeles Times – Financial giants and other large firms now being bailed out by the government spent millions underwriting the Democratic and Republican conventions last summer, just weeks before coming to Washington seeking multibillion-dollar handouts.
The big donors included AIG, Ford Motor Co., Citigroup, Goldman Sachs and Freddie Mac.
In all, major corporations, labor unions and individual millionaires poured $118 million into the nominating conventions for Barack Obama and John McCain, according to reports from the Campaign Finance Institute and the Center for Responsive Politics. The nonpartisan private groups compiled the numbers from filings required under federal law.
ninemsn – The corporations watchdog has extended a ban on covered short selling in the local equities market by at least another month because market conditions continue to be difficult.
But a group representing hedge funds, which are high volume users of the short selling trading technique, has condemned the move, saying it could lead to job losses.
The Australian Securities and Investments Commission (ASIC) imposed the ban on September 21, as financial markets were racked by volatility and regulators began to look for ways to reduce wild swing in certain shares and the wider market.
ASIC chairman Tony D’Aloisio said on Tuesday that various actions and packages adopted by the Australian and other world governments to address the global financial crisis were yet to work through the system.
West Palm Beach (HedgeCo.net) – Avalon Capital Holdings Corporation, and its wholly owned subsidiary, Traders Development LLC, announced that it has initiated alpha testing of its proprietary ECN system.
The Avalon ECN is a liquidity aggregator, which takes the best prices from an unlimited number of price providers, and allows traders to execute off the best prices in the market. The system will be ideal for traders seeking to execute large orders of a billion or more across many banks and hedge funds simultaneously.
"The overall goal of the Avalon ECN is to significantly improve the institutional liquidity in the Forex Market by applying the latest software technologies in the Foreign Exchange Industry." Dr. Vladimir Karpenkov, Chairman of Avalon Capital Holdings Corporation said. "Additionally, the Avalon ECN is designed to reduce the cost for Retail Forex brokerages that are seeking interbank liquidity."
"The Forex Market is about reducing overhead, managing risk and acquiring new trading clients. With Avalon technology, companies ought to increase their profitability while reducing risk." Alex De Khtyar, President of Avalon Capital Holdings Corporations added.
FierceFinance- Hedge fund regulation is a hot topic right now. But we’ve heard only a little about that perennial issue: whether retail investors should be allowed more–or less–access to funds. Current proposals, driven by the credit crunch, would make it harder to qualify as an accredited investor. AllAboutAlpha suggests that current proposals would result in a drop in the pool of retail assets by about 50 percent.
Perhaps this is not a bad time to revisit the idea. The age-old thought has been that most retail investors generally lack the sophistication necessary to really invest safely in hedge funds. But AllAboutAlpha notes a recent article by Houman Shadab of George Mason University that argues retail investors are actually hurt by restrictions on investing in hedge funds. He makes a number of good points, one of which is the idea that most hedge funds are not as complex as publicly traded corporations. In some cases, understanding various financial and other companies requires a certain amount of knowledge.
