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.
Financial Standard – As the GFC batters confidence in long-only equities, sentiment is turning to hedge funds, provided you partner with groups that are reputable and well run, said Spencer Young, chief executive officer of HFA Holdings.
The result is institutional investors are looking to steer money towards hedge funds as they seek a safe haven for their capital, said Young.
"While investors in traditional long-only funds have lost around 40 per cent of their invested capital in the year to date, the hedge fund industry has recorded average losses of less than half that amount – around 18 per cent – and proven its long-term value," he said.
Young said several major consultancy groups are now forecasting institutional investors to tip more money into the hedge fund sector as they re-evaluate their strategies following the global market melt-down.
The Times and Democrat – In a record bailout of a private company, the government on Monday provided a new $150 billion financial-rescue package to troubled insurance giant American International Group, including $40 billion for partial ownership.
The action, announced by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company. All told, the moves boost aid to the company to more than $150 billion.
Fed officials, however, expressed confidence that the money would be repaid to taxpayers.
The $40 billion infusion comes from the recently enacted $700 billion financial bailout package. The government is buying preferred shares of AIG stock, giving taxpayers an ownership stake in the company. In turn, restrictions will be placed on executive compensation at the firm.
North County Times – The stock market is retreating, credit markets are squeezed and many corporate earnings are diving. But one piece of the mangled U.S. economy is making an improbable comeback: the dollar.
As the financial meltdown clobbers world economies from South America to Asia, investors desperate for safe assets are plowing money into the battered buck —- helping it snap a six-year slide and reclaim its long-held status as a stable asset during rough times.
"The dollar has become the safe-haven play," said Kathy Lien, director of currency research at Global Forex Trading in New York. "It’s a pretty monumental move we’re seeing" and" reflects a "crisis of confidence."
While the U.S. economy by no means is showing signs of a recovery, Lien said other countries are "just beginning to feel the magnitude of the global slowdown, whereas the U.S. is maybe three-quarters of the way through. "What everyone is beginning to realize is that, yes, the U.S. is in trouble. But it’s also much further along (in the crisis) and probably closer to stabilizing than Europe and other regions," Lien said.
Metro Canada – A company that will play a key role in the Vancouver 2010 Olympic Games ended rampant speculation about its financial well-being Thursday by completing a deal to refinance a $1.7-billion loan – just hours before deadline.
Intrawest ULC owns and operates major tourism venues across the country but is best known for its Whistler-Blackcomb ski resort, one of the main venues for the Winter Games.
The destination-resort company received unanimous support from its existing lender group Thursday to refinance.
Intrawest CEO Bill Jensen said he’s pleased to have reached an agreement with Fortress Investment Group LLC (NYSE:FIG), "particularly given the challenges of the global credit markets."
"The support Fortress and our lenders have shown underscores their confidence in Intrawest and will enable us to continue to execute our long-term strategic plans," Jensen said in a statement.
Reuters – Nations from Europe to Australia rushed out plans on Sunday to shore up their banks, trying to halt a markets crash with pledges to back lending, buy stakes in financial institutions and take other emergency steps.if(window.yzq_d==null)window.yzq_d=new Object(); window.yzq_d['Yl9NCdG_Rvc-']=’&U=13fiorehq%2fN%3dYl9NCdG_Rvc-%2fC%3d632663.12996380.13209191.6227634%2fD%3dLREC%2fB%3d4577807%2fV%3d1′;
European leaders meeting in Paris said their line of attack would help halt the chaos that has frozen credit markets, the lifeblood of the financial system, redrawn the world’s financial industry and threatened a global recession.
"I believe that we will see over the coming few days worldwide action that will make people see that confidence in the banking system can be restored," British Prime Minister Gordon Brown told reporters.
Reuters – Blackstone and Kohlberg Kravis Roberts & Co are each looking to buy parts of Lehman’s real estate and asset management units, sources familiar with the situation said on Friday, sparking a broad rebound in financial stocks.
The real estate unit of Lehman Brothers Holdings Inc, which includes property and some asset-backed securities, could be worth about $5 billion (2.8 billion pounds), the sources said.
Lehman shares jumped 5.3 percent after the Reuters report. That helped lift the S&P financial index , which had slipped earlier on Friday, by 1.8 percent.
"Lehman has been so shredded in terms of confidence that anything like this is something that can ignite a upward movement at any point," said Michael Holland, founder of money manager Holland & Co LLC.
Reuters UK- European hedge fund launches in the first half of 2008 fell to their lowest level since the last bear market, a survey showed on Monday, as the credit crisis hit investors’ confidence.
The survey by EuroHedge, part of news and data group HedgeFund Intelligence, showed 106 funds were launched in the first half, which is 45 percent down on a year ago and the lowest level since the first half of 2002, when markets were still in a three-year bear market and 84 funds were launched.
However, just over 50 funds closed down in the first half of 2008, indicating the number of funds continues to grow.
