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.
Reuters UK – British listed hedge fund manager Man Group Plc said on Monday first-half sales rose by about 25 percent to $10 billion, but its shares fell as market turbulence hit its funds under management.
Funds under management fell by $5.0 billion to about $70.3 billion — 12 percent down on the $79.5 billion at end-June — reflecting negative investment movement, Man said. Net inflows for the period rose 14 percent at $4.1 billion.
Shares in the group, which have lost 32 of their value over the last month, were down a further 5.4 percent at 353.5 pence, valuing the group at about 6.35 billion pounds, at 0737 GMT.
Times Online – Who would be in hedge funds right now? Man Group, which has long traded on its name as the world’s largest hedge fund manager, yesterday found the tag something of a liability.
The shares lost 35½p to 398p before a trading update next Monday, making a 46 per cent fall in six weeks, with analysts saying that it is heavily exposed to the whole hedge fund industry through its fund of funds portfolio. Barclays’ index of hedge fund performance shows a 5.6 per cent fall in the year so far to the end of August. Hedgies relied on high borrowing to generate high returns. Most are now being forced to sell positions to cut debt.
Meanwhile, there are growing question marks over Man’s flagship AHL managed futures fund, as its performance has slipped in the past quarter and the short-selling ban may have an impact on its strategy. Man itself is still available to be shorted.
Investec, which cut its target price from 650p to 460p, said: “The hedge fund industry looks set for further negative press, possibly impacting on short-term fund flows at Man, as well as its near-term share price performance.” Kaupthing cut its earnings forecast but held its 630p target pointing out that the AHL fund was still up 3 to 4 per cent in the year so far.
The Independent – Stanley Fink, the so-called godfather of UK hedge funds, has made a dramatic return to the industry after retiring from Man Group, the largest alternatives manager in the world, only two months ago.
Mr Fink confirmed yesterday that he had been appointed chief executive of International Standard Asset Management, an alternative asset manager with about £200m under management. The fund also announced the appointment of the former Labour Party fundraiser Lord Levy as chairman.
The London-based trading group said Mr Fink will assume responsibility for the operational management of the business to build a significant hedge fund presence, while both will use their extensive network of wealthy contacts to boost the fund’s assets under management.
International Standard Fund was set up by the former Merrill Lynch gold trader Roy Sher, a friend of Mr Fink, in 2003, and is mainly backed by private investors. Mr Sher said the big-name appointments should help the firm to win market mandates ahead of its hedge fund rivals.
Daily Telegraph – Stanley Fink, the former boss of Man Group, who became one of the City’s best-known financiers, is teaming up with Lord "Cashpoint" Levy to make a spectacular comeback to the hedge fund industry he quit last year.
Known as the "Godfather" of British hedge funds, Fink is to become chief executive of International Standard Asset Management (ISAM), a small London-based commodities trader. Lord Levy, the former Labour treasurer who was Tony Blair’s special envoy to the Middle East, is to be chairman of the group.
It will be Levy’s first high-profile role since being embroiled in Labour’s cash-for-honours’ scandal two years ago.
The pair plan to build ISAM, which currently has two funds trading in gold and fixed income, into a substantial player in the hedge fund world.
The return of Fink will be a major talking point in the City.
Financial Times – RAB Capital is planning to restructure its flagship hedge fund, which plunged more than a third this year, and offering investors lower fees in return for agreeing not to withdraw their money for three years.
It is unclear how much of the $1.4bn that RAB Special Situations had at the end of June will be locked up for three years.
But any agreement to limit withdrawals could be good for the London-based fund, much of which is invested in hard-to-sell Aim-listed shares and private equity.
RAB is the latest in a series of hedge funds to offer discounts to investors who agree to stick with a poorly performing manager. Others include Ore Hill, the New York credit fund half-owned by London’s Man Group.
According to people familiar with the requests, RAB could announce the restructuring within a few days.
Reuters – Hedge fund Ore Hill Partners, which specialises in credit strategies, has barred clients from redeeming their money from its flagship offering, imposing a freeze just as investors clamored for an exit, the company said on Friday.
The firm, half owned by Man Group, the world’s largest publicly traded hedge fund, put up a so-called gate provision on its roughly $1.2 billion (650 million pound) Ore Hill International portfolio this week, limiting the amount of withdrawals after investors sought the return of roughly $300 million, said an investor who asked not to be identified.
Heavy redemptions for September triggered an automatic gate, said Sophie Sophaon, a spokeswoman for the fund. Fund directors are considering what measures to take that will be in the best interest of all investors, she added.
New York (HedgeCo.Net) – New York-based Ore Hill has suspended investor redemptions after hefty withdraws set off an “automatic gate.” The $1.2 billion Ore Hill International Portfolio, which is partially owned by hedge fund giant Man Group Plc, was frozen after investors sought to redeem about $300 million.
The credit strategies fund posted a loss of about 6.5 percent this year, after an unimpressive 2007 in which the fund returned a mere 1.8 percent. A board meeting has been planned to discuss the next course of action. Often, hedge fund will suspend redemptions in an effort to wait out unfavorable market conditions. Other times, it serves as a precursor to the eventual closing of the fund.
This year has proven to be one of the toughest for the hedge fund industry, with hedge funds down as a whole 3.5 percent, according to data from Hedge fund Research. Like many other funds, Ore Hill experienced losses stemming from the credit crisis.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Washington Post – John W. Henry & Co., the investment firm run by the Boston Red Sox baseball team’s owner, is among hedge funds that in July suffered their worst drops in almost 18 months as oil and other commodities retreated from record prices.
John W. Henry lost 17 percent on its JWH GlobalAnalytics fund, the firm said on its Web site. Altis Partners’ $1 billion global futures program fell 18 percent, paring its gain for the year to 10 percent. London-based Man Group’s AHL Diversified Futures, the computer program that trades about $25 billion of investments, dropped 5.5 percent through July 28, or a loss of about $1.37 billion in the month.
Oil, natural gas, nickel and corn prices all tumbled in July, making it the worst month for the Reuters/Jefferies CRB Commodity Index in 28 years. The drops pushed commodities trading advisers to their biggest declines since March 2007, according to data compiled by fund tracker Barclay Hedge.
Bloomberg – John W. Henry & Co., the investment firm run by the Boston Red Sox baseball team’s owner, is among hedge funds that suffered their worst drops in almost 18 months in July as oil and other commodities retreated from records.
John W. Henry lost 17 percent on its JWH GlobalAnalytics fund, the firm said on its Web site. Altis Partners Ltd.’s $1 billion global futures program fell 18 percent, paring its gain for the year to 10 percent. London-based Man Group Plc’sAHL Diversified Futures Ltd., the computer program that trades about $25 billion of investments, dropped 5.5 percent through July 28, or a loss of about $1.37 billion in the month.
Oil, natural gas, nickel and corn prices all tumbled in July, making it the worst month for the Reuters/Jefferies CRB Commodity Index in 28 years. The drops pushed commodities trading advisers, which manage about $234 billion, to post their biggest declines since March 2007, according to data compiled by BarclayHedge, a Fairfield, Iowa-based fund-tracker. So-called CTA funds rose 8.3 percent in the first half, making them the best performing strategy in an industry that had its worst start to a year in nearly two decades.
Wealth Bulletin- In January, 14 of the UK’s largest hedge funds, including Man Group, Brevan Howard and Gartmore, backed the Hedge Fund Working Group’s best-practice standards.
These aim to improve governance and disclosure and to promote transparent and independent valuation.
Six months on, however, only one, unnamed, hedge fund beyond the 14 working group members, has signed up to the code.
Sir Andrew Large, chairman of the working group, believes it is unrealistic to expect hedge funds to sign up immediately.
Reuters – Man Group Plc, the world’s biggest listed hedge fund company, said demand for its fund products had remained strong in the first quarter and it was confident about its prospects for the full year.
Sales in the three months to June 30 were $5.0 billion (2.5 billion pounds) while funds under management increased to $79.5 billion from the $74.6 billion seen at the end of March.
"Demand for our fund products has remained strong, both from private investors and institutions," Chairman Jon Aisbitt said in a statement prepared for the annual shareholder meeting on Thursday.
"This success in asset raising reflects the group’s broad geographic presence and the continued attraction of conservatively structured alternative investment products," he added.
