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.
Wall Street Journal Blogs – Are hedge-fund managers making a comeback with investors? The great recession hammered the hedge-fund industry in 2008. Returns tumbled, redemptions soared and investors began questioning the very underpinnings of the industry. Active managers promise to beat, rather than match, the market’s overall returns and charge fees that can be at least 10 times higher than those of index funds.
The WSJ reported in June that an increasing number of big investors are concluding that stock and bond pickers failed to add any value in the market turmoil and are shifting to index funds. A survey by Greenwich Associates at the time found that about one in five institutional investors said they recently had shifted money away from active managers and into passive index strategies. That was up from just 4% who expected to make that shift when asked from July to October 2008.
Bloomberg – Mizuho Financial Group Inc., Japan’s second-largest bank by revenue, will start electronic trading in Asia after hiring a team of 16 former Lehman Brothers Holdings Inc. employees, two executives familiar with the plan said.
The team, led by Anthony Brooker, the former head of electronic trading sales for Lehman in Asia, will target hedge funds and institutional investors with electronic products and systems for equities trading, the executives said. They declined to be identified as the plan isn’t public.
Mizuho, which cut its full-year profit forecast 55 percent on Oct. 31 because of rising bad loans and investment losses, is building its equity trading business in Asia to challenge Nomura Holdings Inc. Brooker was among hundreds of Lehman employees who opted to join competitors rather than staying with Nomura after the firm agreed to buy Lehman operations in Asia, the Middle East and Europe. Nomura is taking over about 8,000 Lehman workers following the Wall Street firm’s collapse in September.
Reuters – In the past month, traders could have shown up on Wall Street at 3 p.m. and not have missed much.
The last hour, even the last min utes, of trading seemed to be the only ones that mattered in October. But the days of one-hour markets may be waning, at least for now.
Traders say the intensity of these extreme late-day swings — 443 points on average in the "witching hour" for the Dow Jones industrial average .DJI in October — could let up as some of the so-called forced selling abates.
"I don’t think the late-day volatility will be as evident this month," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York.
