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.
HedgeCo.net (West Palm Beach) – Long/Short Equity hedge funds continued to increase overall net exposures in July, enabling managers to capitalize on market upswings early in the month, according to Jordan Drachman, Head of Research for Alternative Beta Strategies at Credit Suisse.
Dr. Drachman noted, ”As risk appetite returns to the market, many Long/Short Equity hedge fund managers have increased their overall net exposures, which enabled them to generate positive returns as equity markets bounced back early in July. Despite mid-month volatility, managers were able to preserve gains to finish up for the month. The Credit Suisse Long/Short Equity Replication Index was up 1.96% (net) for the month, while the Credit Suisse Global Macro Replication Index finished up 0.03% over the same period.”
AIR Indices seek to replicate the performance of major hedge fund strategies and enable investors to gain liquid, transparent insight into the Global Macro and Long/Short Equity sectors of the Credit Suisse/Tremont Hedge Fund Index. The AIR platform also offers inverse indices that seek to approximate short exposure to the aggregate returns of the universe of Long/Short Equity and Global Macro hedge fund managers.
Performances for the AIR Global Macro and Long/Short Equity Indices are calculated daily and shown net of a 1.15% per annum calculation fee.
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HedgeCo.net (West Palm Beach) – Hedge fundprime broker Merlin Securities and financial tech group Gerson Lehrman, announced an exclusive research partnership which will allow Merlin to provide emerging managers with access to Gerson Lehrman Group’snetwork of more than 200,000 experts. As a result of the partnership, Gerson Lehrman Group’s platform will be much more accessible to fund managers with assets of up to $150 million.
”We are very pleased to announce this exclusive partnership with Gerson Lehrman Group,” Stephan Vermut, founder and managing partner of Merlin Securities, said, ”Gerson Lehrman Group is a trusted name and resource for generating alpha, and as leaders in our respective markets, the combination of Gerson Lehrman Group’s worldrenowned expert network with Merlin’s prime, multi-prime and analytical solutions represents an extremely powerful offering for emerging managers.”
”The decision to offer services to emerging managers was a natural one,” Alexander Saint-Amand, president and chief executive officer of Gerson Lehrman Group, said, ”Like our current clients, emerging managers greatly value the sophisticated expertise offered through our global network. We are excited to be working with Merlin as our partner in providing Gerson Lehrman Group services to emerging managers.”
Merlin was recognized as the #1 prime broker for funds less than $1 billion by Alpha magazine’s 2008 hedge fundservice provider survey for the second year running. Merlin was also the top-ranked non-algorithmic-driven firm and second overall among brokerages trading NYSE stocks as measured by arrival price, according to the 2008 Elkins/McSherry annual transaction cost survey.
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HedgeCo.net (West Palm Beach) – Cinneas Foreign Exchange LLC, an alternative investment management firm specializing in momentum based trading in the foreign exchange market, have announced the launch of a Commodity Trading Advisor (CTA).
The Cinneas investment process combines technical, fundamental and intraday market flow analysis with the careful application of leverage for the purpose of delivering non-correlated returns, preserving capital and mitigating risk. Cinneas offers a low barrier to entry with a minimum investment of $5,000 with no lock-up period.
Cinneas was founded by Morgan Stanley veterans Michael Myrtetus and Douglas Borthwick. Myrtetus and Borthwick met in 1996 when Douglas joined Morgan Stanley’s foreign exchange trading team. At that time Morgan Stanley’s FX business had revenues approximating $200 million. Over the 9 years they worked together, the business grew to approximately $1 billion.
"We believe that an actively managed, globally diverse portfolio can adapt and grow with the changing markets," said Douglas Borthwick, Managing Partner. "Our approach draws upon global economic, fundamental, and technical analysis to identify momentum trading opportunities, with the ultimate goal of producing non-correlated risk-adjusted returns."
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West palm Beach (HedgeCo.Net) – Leading risk analytics provider Measurisk, LLC, an affiliate of J.P. Morgan Worldwide Securities Services (WSS), today announced that it has crossed an important industry milestone in modeling the full positions of over 1,000 hedge funds – making it the largest position-based hedge fund analytical platform in the industry.
Measurisk acts as an independent intermediary facilitating the flow of risk information between hedge funds and investors. Measurisk receives the full positions from the hedge funds, but only provides summary risk and exposure statistics to investors. In this way, investors receive the risk transparency they need, while hedge fund managers maintain the confidentiality of their individual positions.
Measurisk also announced that the platform now includes managers that collectively make up more than 50% of the total $1.3 trillion* hedge fund industry assets.
“We are excited that the industry has chosen Measurisk as the preferred outlet to bridge the needs of both the investor and the manager" said Andrew Lapkin, President of Measurisk. "In today’s markets, transparency and risk management are paramount. Position-based risk information provides investors with a higher level of information necessary to make the best investment decisions – especially when having to navigate these difficult market environments.”
Measurisk’s independent, third party risk solutions are designed to address the needs of pension plans, endowments and foundations, family offices, insurance companies, hedge funds and funds of hedge funds. Measurisk compliments the full breadth of J.P. Morgan WSS services including: fund administration; custody; performance analytics and securities lending.
JPMorgan Chase & Co., is a leading global financial services firm with assets of $2.1 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan, Chase, and Washington Mutual brands.
J.P. Morgan Worldwide Securities Services (WSS) is a premier securities servicing provider that helps institutional investors, alternative asset managers, broker dealers and equity issuersoptimize efficiency, mitigate risk and enhance revenue. A division of JPMorgan Chase Bank, N.A. (NYSE: JPM), WSS leverages the firm’s unparalleled scale, leading technology and deep industry expertise to service investments around the world. It has $13.5 trillion in assets under custody and $3.7 trillion in assets under administration.
HedgeCo.net (West Palm Beach) – A survey by RSM McGladrey, a financial services consultancy, found that hedge fund managers are surprisingly ready to work with SEC regulators to cooperate with authority, despite wide-spread wariness about over-excessive regulation from the Obama administration.
However, the Obama financial regulatory plan was a top concern with 75%, fearing that further regulation will go too far and stifle the market’s recovery.
The survey polled more than 100 hedge fund managers during the last month and focused on hedge fund industry sentiment toward the Obama administration regulation.
Fund managers are also optimistic about the industry’s prospects, according to the survey. 60% believe the current environment provides more investment opportunities than challenges. An overwhelming majority (69%) see the U.S. economy returning to positive growth by Q2 2010.
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HedgeCo.net (West Palm Beach) – New York-based currency manager FX Concepts is launching a new Luxembourg-domiciled fund investing in its flagship Global Currency Program (GCP). The fund has been set up in conjunction with Deutsche Bank.
“Investor interest in active currency strategies has been very strong this year, and we’re delighted to make our Global Currency Program available to investors in UCITS format” said John R. Taylor, Chairman and CEO of FX Concepts. The new fund offers daily liquidity and has a €25,000 minimum ($35,000). Investments are fully collateralized and ring-fenced in accordance with the UCITS III directive. The fund will offer share classes in Euro, US Dollars, Sterling and Yen.
“In the current financial climate, investors are looking for strategies which offer maximum liquidity and transparency”, says Daniel Szor, Managing Director and head of FX Concepts’ London office. “FX fits these criteria very well, and now clients can participate through a fund which offers daily liquidity and minimized counterparty risk”.
The Global Currency Program invests in a diversified portfolio of 20-25 currency positions chosen from a universe of over 30 currencies. The program targets annualized returns of 10-15% with low volatility and has a track record of over eight years.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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UPDATE: HedgeCo.net (West Palm Beach) – Najy N. Nasser, Chief Investment Officer of the Bahamas/UK based hedge funds, Headstart Advisers Limited (HAL) and Headstart Fund, has agreed with the SEC to pay $17.8 million in a settlement regarding a 2003 alleged late trading scheme.
Without admitting or denying the allegations, the civil settlement includes payments of $17 million by the defunct Headstart Fund Ltd (domiciled in the Bahamas), $200,000 by Headstart Advisers Ltd and $600,000 by Mr Najy Nasser, the Chief Investment Officer. This settlement will conclude the case brought by the SEC against Headstart Fund Ltd, Headstart Advisers Ltd and Mr Najy Nasser arising from Headstart’s historic market-timing strategy.
The Commission’s Complaint alleged that the Bahamas hedge fund, Headstart, acting through its United Kingdom investment adviser, HAL, engaged in fraudulent late trading and deceptive market timing of U.S. mutual funds through accounts at U.S. broker-dealers. Headstart has since September 2003 focused its business on other successful strategies.
Nasser said in response to the settlement, “Headstart is very pleased to have reached a settlement. We responded to US concerns about market timing and immediately ceased this element of Headstart’s business in September 2003. We have since worked hard to build up Headstart’s funds using different strategies. As we equalled or bettered our overall returns against our benchmark, we are especially pleased with what we have achieved.
"We have superb long-term performance against both the market and our peer group and have some interesting plans to grow Headstart’s investment business,” he concluded.
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West Palm Beach (HedgeCo.net) – European hedge fund manager, NB Private Equity Partners (NBPE), and a new fund launched by Altus, ‘Altus Resource Capital,’ have been accepted by The London Stock Exchange into the The Specialist Fund Market (SFM).
As an EU Regulated Market, SFM is designed to offer access for specialist investment vehicles targeting institutional, professional and highly knowledgeable investors. It’s admission standards offer sufficient flexibility for single strategy hedge funds, private equity funds and other alternative strategies and structures. The market is open to both UK and international issuers.
"We are delighted to welcome two new funds to the Specialist Fund Market today. Altus Resource Capital demonstrates that despite the wider economic climate, London’s investors continue to be responsive to new investment opportunities, (Altus recently raised GBP26 million ($43 million) for the launch)." Tracey Pierce, Head of Equity Primary Markets at London Stock Exchange Group, said, "NB Private Equity Partners’ decision to join highlights some of the London markets’ other key strengths: the enhanced liquidity and increased investor profile that they offer to issuers on an ongoing basis."
"We are very pleased to launch Altus Resource Capital (ARC) on the Specialist Fund Market today." Marc Gordon, partner at Nimrod Capital LLP, placing agents for Altus Resource Capital, commented, "This is our second successful fundraising within 12 months on the London market. The Specialist Fund Market has provided the flexibility to bring the new fund to the attention of leading asset managers and to attract interest even in these difficult times."
Since the start of 2008, a number of specialist funds have taken advantage of new opportunities to access London-based investors through the London Stock Exchange’s Main Market and Specialist Fund Market, including: Boussard and Gauvaudan Holdings, BH Global, Castle Alternative Invest, FRM Diversified Alpha, Marwyn Value, and MW Tops. They benefit from the deepest liquidity available to publicly quoted alternative investment vehicles.
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West Palm Beach (HedgeCo.net) – Euromoney Institutional Investor is planning to launch a new magazine and online offering covering US and international hedge funds in September.
The company’s hedge fund publishing assets include Institutional Investor’s Alpha magazine and Absolute Return magazine, which is published by HedgeFund Intelligence, the world’s leading information source on hedge funds. The new publication will be titled "AR".
"The new publication will include everything that Alpha and Absolute Return contained, but it will be a new magazine which will contain a lot of editorial that neither magazine does, including new surveys, rankings and high-powered web functionality," says Euromoney Institutional Investor chairman and Editor-in-chief Padraic Fallon.
"With the hedge fund sector under intense scrutiny from Washington, regulators and investors, this is an excellent time to launch a hedge fund publication," he says. "Building on the strengths of both Institutional Investor and HedgeFund Intelligence, we have the opportunity to produce the world’s leading hedge fund title which will keep investors, managers, regulators and the whole hedge fund community informed on developments in the sector."
"Hedge fund performance has recovered strongly in 2009, after the sector’s worst ever performance in 2008, and there are now significant opportunities," says Michelle Celarier, editor of Absolute Return. "The new magazine is an exciting development because it joins two prestigious monthly magazines that cover hedge funds to create a single authoritative voice. Our mission is to create the most insightful, entertaining and definitive content about the hedge fund industry, in both the printed magazine and online. We will offer readers information they cannot find elsewhere, including news and performance data on thousands of funds, along with in-depth analysis, research and profiles of the biggest hedge funds."
Advertising will be sold by Christine Cavolina, publisher of Institutional Investor, and the Institutional Investor sales team, led by Joy Desanto.
"AR will provide an unparalleled editorial environment for advertisers interested in the hedge fund industry," says Cavolina. "It presents the ideal opportunity for companies serving this audience to influence decision-makers and generate new business."
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West Palm Beach (HedgeCo.net) – Institutional brokerage and hedge fund services company BTIG LLC, announced the expansion of its international capabilities with the addition of a three-person U.S. based live hours (8pm-2am EST) Japan team.
The U.S. based Japan team will initially consist of William Chandruang, Jeff Gallo, and David Schneider, all hired at the managing director level. Schneider will be based in Greenwich, and Gallo and Chandruang will be in Los Angeles. All three have covered the Japanese markets for the majority of their careers, and have worked in Japan, which gives them an edge in understanding the nuances of Japan’s equity market.
“William, Jeff and David bring a wealth of experience, long standing and deep rooted institutional relationships, and an in-depth knowledge of the Asian equity markets,” Steven Starker, Co-Founder of BTIG, said. “Providing our clients with seamless execution across the globe and around the clock has become increasingly important in today’s rapidly changing environment.”
Chandruang spent the last 15 years working in Japan most recently at UBS where he was a managing director and both co-head of client trading & execution. Gallo joined BTIG after living and working in Tokyo for a total of 15 years. He most recently worked at Nikko Citigroup. Schneider was previously with Merrill Lynch in Japan where he was in charge of the entire execution services platform.
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West Palm Beach (HedgeCo.net) – The Cayman Islands Government signed a Tax Information Exchange Agreement (TIEA) with Ireland at a ceremony held at the British Embassy in Berlin.
Signing the agreement on behalf of the Cayman Islands was the Leader of Government Business/Premier Designate and Minister for Financial Services, the Hon. McKeeva Bush, OBE, JP.
“The Cayman Islands is pleased to sign this agreement today with Ireland, marking another important step towards our ongoing commitment to international cooperation and OECD standards for transparency and exchange of information on tax matters. This signing will commemorate the beginning of what I am sure will be a highly productive and mutually rewarding relationship between the Cayman Islands and Ireland,” Bush said.
He added, “Our newly formed ‘Negotiation Team’ has worked tirelessly to secure technical agreements quickly. Our signing last week of a Double Taxation Agreement with the UK together with today’s signing is a direct result of their commitment and hard work. We look forward to continuing these efforts and I am confident that we will be on the OECD’s white list very soon.”
The Cayman Islands delegation, which was led by Mr. Bush also included the Minister of District Administration, Works, and Gender Affairs the Hon. Julianna O’ Connor-Conolly, JP; Chief Secretary the Hon. George McCarthy, OBE, JP; Financial Secretary the Hon. Kenneth Jefferson, JP; Chief Officer for Ministry of Financial Services Carson Ebanks, OBE, JP; Senior Assistant Secretary Michelle Bahadur; Senior Political Assistant Richard Parchment; Cayman Islands Monetary Authority General Counsel/Deputy Managing Director Langston Sibblies and Paul Byles.
Signing on behalf of the Irish Government, Martin Mansergh, TD, Minister of State at the Irish Department of Finance said, “We are very pleased to be here to sign this TIEA with the Cayman Islands. This is concrete evidence of the significant progress that has been made in recent months. Ireland welcomes the commitment of the Cayman Islands to implement the OECD standards of transparency and exchange of information in tax matters and their willingness to enter into tax information exchange agreements. The signing of this agreement represents a new chapter in relations between Ireland and the Cayman Islands.”
The Cayman Islands now maintains ten bilateral tax information agreements with the following countries: United States, United Kingdom, Denmark, Faroe Islands, Finland, Greenland, Iceland, Ireland, Norway and Sweden.
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West Palm Beach (HedgeCo.net) – Quantum Global Financial Corp. has launched the multi strategy New Renaissance Fund with over 37% return for its first 11 months ended May 29, 2009.
The fund uses a systematic approach that employs a new technology. These are dynamically self adapting forecasting models. The algorithms have been in development for 18 years, tested for 7 years in simulation, and finally put into practice 11 months ago resulting in a substantial positive performance gap.
QGF achieved their 37% return with average leverage ratio of 1.25. For the same period, the CSFB Managed Futures Index was down 2.37%, Barclay Multi Strategy Hedge Fund index was down 13.89% and the S&P 500 was down 37.67%.
The fund focuses on delivering absolute performance throughout the economic cycle, transparency, liquidity and partnerships with firms that demonstrate extraordinary ethical compliance and global sustainability.
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