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.
Nationalpost.com – The broad equity market rally helped hedge funds to their best performance in almost a decade in May, according to Chicago-based Hedge Fund Research. The firm’s Fund Weighted Composite Index rose more than 5.2% during the month, marking the largest single-month gain since February 2000.
Year-to-date, the HFRI Index is up more than 9%. This follows a decline of more than 19% in 2008. Strategies focused on energy and emerging markets posted the strongest gains in May.
Stuff – Mauled by the carnage on Wall Street, mutual funds are copying hedge fund strategies in an effort to regain some of the shine they have lost this decade.
Many investors have been burned investing in a single asset class and withdrew $234 billion (148 billion pounds) from U.S. stock funds last year as the deep bear market sparked the first annual outflow of long-term investment in mutual funds since 1988.
But as stocks sank, hedge funds soared. The Standard & Poor’s 500 Index, a benchmark for the broad U.S. stock market, returned a negative 40 percent this decade through the end of 2008. Hedge funds, meanwhile, gained 55 percent over the same period, Hedge Fund Research’s fund-weighted composite index shows.
Reuters UK – Mauled by the carnage on Wall Street, mutual funds are copying hedge fund strategies in an effort to regain some of the shine they have lost this decade.
Many investors have been burned investing in a single asset class and withdrew $234 billion (148 billion pounds) from U.S. stock funds last year as the deep bear market sparked the first annual outflow of long-term investment in mutual funds since 1988.
But as stocks sank, hedge funds soared. The Standard & Poor’s 500 Index .SPX, a benchmark for the broad U.S. stock market, returned a negative 40 percent this decade through the end of 2008. Hedge funds, meanwhile, gained 55 percent over the same period, Hedge Fund Research’s fund-weighted composite index shows.
West Palm Beach (HedgeCo.net) – Hedge fund research provider, Guidepoint Global, LLC, has acquired tech and media company, Vista Research, Inc. from Standard & Poor’s.
“In the current economic climate, investors and business decision makers are increasingly seeking on-demand knowledge and insights through expert networks,” said Albert Sebag, CEO of Guidepoint Global. “Guidepoint’s acquisition of Vista, a pioneer in the expert network field, gives our clients access to one of the most comprehensive primary research networks in the world, delivered with the single-minded focus on customized service that they have come to expect.”
Guidepoint has over 130,000 global experts and a compliance framework supported by a proprietary IT platform, as well as one of the most advanced online client interfaces.
With the acquisition of Vista Research, Guidepoint Global said it will expand its team of client service professionals and recruiters to support a client base that includes many of the world’s leading private equity firms, mutual funds, hedge funds, strategy consultancies and multinational companies.
Alex Akesson
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Bloomberg – Hedge fund investors’ growing demands for separate accounts may be an overreaction to increasing redemptions and fraud, participants said at an industry conference in Hong Kong this week.
Investors are demanding accounts that allow them to tailor investments, see trades and get out when they want, instead of the traditional way of pooling their money in a fund, as managers try to curb redemptions and after U.S. financier Bernard Madoff’s conviction for running a Ponzi scheme.
A record $155 billion was pulled from hedge funds last year, according to Chicago-based Hedge Fund Research Inc., while capital outflow may accelerate to $168 billion this year, a Deutsche Bank AG survey in March showed.
English Eastday – Investors continued to withdraw capital from hedge funds in the first quarter of 2009, redeeming nearly 103 billion U.S. dollars, according to data released on Tuesday.
The redemption figure, about 7.3 percent of overall hedge fund assets, was down from the record quarterly withdrawals in the fourth quarter of 2008 of over 152 billion dollars, said Chicago-based Hedge Fund Research (HFR).
Total hedge fund industry capital declined to 1.33 trillion dollars as of the end of the first quarter of 2009, 600 billion dollars below the its peak at the end of the second quarter of 2008 and 75 billion dollars less than the total asset at the year-end 2008.
Forbes – You’d be hard pressed to find anyone but limousine drivers and beaten-down investors shedding tears for the end of the hedge funds’ golden age.
The average hedge fund lost 18% last year, and one in seven shut its doors, according to Chicago’s Hedge Fund Research. The people who run these funds have, deservedly or not, come to symbolize an unsavory version of Wall Street greed that focused on accumulating vast wealth with little accountability or oversight.
Bloomberg – Compensation for U.S. hedge-fund employees may drop as much as 25 percent this year as the firms try to recoup last year’s investment losses.
The decline will cut hedge-fund paychecks to about half the record levels of 2007, according to estimates by Alan Johnson, founder of Johnson Associates Inc., a New York-based compensation-consulting firm whose clients include financial- services companies.
About 70 percent of the industry’s 6,800 so-called single- manager funds lost money in 2008 with the average fund dropping 19 percent, according to data compiled by Chicago-based Hedge Fund Research Inc. That means most clients don’t have to pay performance fees — generally 20 percent of profits — until the losses are made up. Many owners of the private partnerships will cover salaries out of their own pockets, or from pools set aside in previous years, to keep their best employees, Johnson said.
New York (HedgeCo.Net) – Hedge fund assets, which were once estimated to reach almost $3 trillion, finished the year at around $1.8 trillion, according to research conducted by London-based HedgeFund Intelligence.
The report contends the fall in assets happened almost entirely in the second half of 2008, as markets took a beating and many hedge funds were forced to close shop. In addition, hedge fund firms that manage $1 billion or more fell from 395 in mid-2008 to 311 at year’s end. Also contributing to the fall was the fact that new fund launches didn’t come close to filling the void left by failed funds. While just 55 new funds were launched last year in the United States with assets of $50 million or more, 200 hedge funds were shut down or liquidated.
Hedge funds as a whole posted their worst year to date in 2008, with the average fund losing about 19 percent, according to data compiled by Chicago-based Hedge Fund Research. The firm also reported hedge funds are already experiencing a better year, with the average fund gaining 0.39 percent in January and falling a mere 0.51 in February, though still outperforming the stock market.
HedgeFund Intelligence predicts that assets may drop another 20 percent or more in the coming months, before leveling off sometime during this year.
According to their data, Bridgewater Associates is the largest hedge fund based on assets under management, with $38.6 billion. Coming in second, JP Morgan manages $32.9 billion, while John Paulson’s Paulson & Co. slid into third place with $29 billion in assets under management.
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. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Bloomberg – Ray Dalio’s Bridgewater Associates Inc. overtook JPMorgan Chase & Co. to become the biggest U.S. hedge-fund manager, even as the firm lost assets during the industry’s worst year, according to a survey.
Bridgewater, based in Westport, Connecticut, managed $38.6 billion on Jan. 1, down 11 percent from July, according to Absolute Return magazine. New York-based JPMorgan, which owns Highbridge Capital Management LLC, ranked second at $32.9 billion, a decline of 26 percent.
“The bulk of hedge funds were delivering returns that were highly correlated with the market,” said Sharath Sury, chief executive officer of S4 Capital LLC, a Chicago-based firm that advises clients on investing. “So when the markets fell, so did their assets.”
Investment returns dropped an average of 19 percent last year, the most on record, according to data compiled by Chicago- based Hedge Fund Research Inc. Hedge-fund assets shrank to $1.2 trillion at the end of 2008 from the June peak of $1.9 trillion on the market losses and investor withdrawals, according to Morgan Stanley analyst Huw van Steenis in London.
Assets at U.S. hedge funds that managed at least $1 billion each fell 32.3 percent in the second half to $1.1 trillion, according to Absolute Return, which is published by London-based HedgeFund Intelligence Ltd.
Ginga Service Sector Fund, the third-best performing Japan-focused hedge fund in 2008, held its ranking in January by investing only in the telecommunications and services companies.
The 3.4 billion yen ($36 million) fund, advised by Tokyo- based Stats Investment Management Co., returned 0.7 percent last month, extending its 13 percent advance in 2008, according to a letter to investors.
Average losses in the $1.4 trillion hedge-fund industry reached 19 percent in 2008, the worst on record, as the biggest market declines since the Great Depression slashed asset values and caused investors to withdraw their money, according to Chicago-based Hedge Fund Research Inc.
Reuters – Global assets of hedge funds may drop to $1.2 trillion by the end of the first quarter, down 35 percent from 2007 as the number of managers decline and funds rely less on strategies that use leverage, a UBS executive said on Tuesday.
"We are gonna see a reduction in hedge fund assets, we are gonna see decline in the number of hedge funds, we are gonna see some strategies that will not work in this environment," Timothy Bell, global head of hedge funds advisory at UBS Wealth Management, told reporters in Singapore.
Hedge funds had assets worth $1.9 trillion at the end of 2007, which peaked at $1.93 trillion in the middle of 2008, according to data from Chicago-based Hedge Fund Research. These assets dropped to $1.4 trillion at the end of 2008.
