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.
The Swedish Wire – Sweden, which holds the rotating EU presidency, is consulting European capitals and “most of them are positive” about the idea, said Roberta Alenius, spokeswoman for Swedish Prime Minister Fredrik Reinfeldt.
“The prime minister wants a summit if it is really needed, and if it gives a common position before the Pittsburgh meeting” on September 24-25, she added.
EU member states have already agreed among themselves to boost surveillance of the banking and insurance sectors as well as hedge funds.
Bloomberg – Tokio Marine Holdings Inc., Japan’s biggest casualty insurer, plans to trim hedge-fund investments and shift more of its portfolio in the industry to strategies such as macro and long-short equity funds.
Tokio Marine & Nichido Fire Insurance Co., a unit of Tokio Marine Holdings with 8.4 trillion yen ($90 billion) in assets, will trim its holdings in hedge funds “slightly” this year from about 100 billion yen at the end of March, said Eisuke Shigemura, who runs the firm’s hedge-fund investment group. He declined to quantify the planned reduction.
Daily Times – (Islamabad) The government intends to establish hedge fund under Trade Policy 2009-12 to keep the cost of capital, production cost and also account for inflation so that export orders remain within the projected cost. In order to attract international investors in a time of uncertain security, the Trade Policy would also offer life insurance cover to international buyers intending to visit Pakistan. The government would provide inland freight subsidy to export-oriented industries so that transportation charges from industries to shipment destinations is kept at a minimum.
Insurance Cover: Official sources informed that it is important to encourage international buyers visiting Pakistan so that local industries are able to fetch export orders. He said that in the course of policy formulation, the ministry is examining to provide insurance cover to international buyers intending to visit Pakistan for signing import-export contract with local export-oriented industries.
Bloomberg – Meiji Yasuda Life Insurance Co., with 23 trillion yen ($244 billion) in assets, said it will cut its investments in hedge funds this year as it switches to investments with steadier returns.
Japan’s third-largest life insurer will reduce its allocation to the industry by “several tens of billions of yen,” from 64.6 billion yen at the end of last fiscal year through March 31, said Shinji Makino, manager of the insurer’s investment planning division. The Tokyo-based insurer last year slashed its hedge-fund holdings by more than 40 billion yen.
Reuters India – Hedge fund firm 47 Degrees North has launched a portfolio that will invest in funds in areas such as electricity, transportation and volatility arbitrage as it seeks fresh ways to sidestep falls in traditional markets.
The firm, which is part-owned by Iveagh, the investment office of the super-rich Guinness family, said the 47 Degrees North Innovation fund will invest in 20-to-25 funds in non-traditional areas that will also include insurance-linked securities and Middle East and North African equities.
Financial Standard – Pension funds around the world are expected to pump up their $547 billion hedge fund allocation by more than $60 billion before December as they look to balance assets and liabilities, new research shows.
Hedge fund managers are expected to heap an extra $63 billion into their coffers from pension funds and family offices.
But insurance companies, private banks, endowments and foundations are all likely to decrease their allocations to the sector, according to Barclays Capital.
The report, which surveyed 300 investors and 100 hedge fund managers representing $873 million of hedge fund assets, noted investors were ready to aggressively allocate their cash balances but will demand liquidity in the process.
Insurance Journal – Demand for disaster derivatives is surging as insurers seek alternatives to scarce reinsurance and expensive catastrophe bonds, with the forthcoming North Atlantic hurricane season likely to give a further boost.
Prices are at record levels for Industry Loss Warranties (ILWs) and derivatives such as catastrophe futures, used by insurers to cover their potential losses from natural disasters.
"People are trying to purchase as much cover as they can, be they insurance companies in Florida or reinsurers in Bermuda, and obviously pricing has been driven up considerably," said Stephen Breen, Executive Vice President at Tradition Re, which brokers traditional reinsurance and catastrophe derivatives.
Boston Globe – The trustee in the bankruptcy case of swindler Bernard L. Madoff has told a hedge fund business owned by Massachusetts Mutual Life Insurance Co. to return money that it received from Madoff over the past six years.
Responding to a Boston Globe inquiry, bankruptcy trustee Irving Picard confirmed that he had sent a so-called clawback letter to Tremont Group Holdings Inc.
Tremont is among more than 225 former Madoff investors who have received such letters from Picard, on the grounds that the money belonged to other investors, because Madoff never generated any real investment profits. Picard wants to recoup the disbursed funds to have more money to repay investors for their losses. He has threatened to sue anyone who doesn’t return the funds.
FOXBusiness – U.K. life insurance and pensions provider Aviva said Wednesday that it’s agreed with a policyholder advocate that a reattribution offer can be put to policyholders.
The offer gives policyholders in two with-profits funds the right to choose whether to receive a payment now or keep their right to uncertain future payouts.
Boston Globe – Secretary of State William F. Galvin is investigating Massachusetts Mutual Life Insurance Co.’s relationship with a hedge fund operation that lost $3.3 billion to admitted swindler Bernard L. Madoff.
Galvin, who oversees the state Securities Division, said his office is looking into MassMutual as part of an ongoing probe of investment firms that placed clients’ funds with Madoff. The division is examining whether MassMutual did enough to safeguard its customers’ money.
Springfield-based MassMutual owns Tremont Advisers Inc., a Rye, N.Y., hedge fund firm that sustained the second-biggest loss of all the confessed swindler’s clients.
Guardian.co.uk – Lloyd’s of London, the specialist insurance market, has offered to buy back up to 100 million pounds ($145 million) worth of bonds at a hefty discount.
The offer applies to fixed/floating rate subordinated notes due 2024 and subordinated notes due 2025 as well as perpetual subordinated capital securities. The bonds are all rated A-.
Lloyd’s said the transaction would allow it to benefit from a significant discount on the securities without materially affecting its capital position.
Boston Globe – Investors of disgraced financier Bernard Madoff have filed 18 lawsuits against Massachusetts Mutual Life Insurance Co. in an effort to recoup $3.3 billion that its hedge fund group lost in the scandal. But the Springfield insurer is trying to distance itself from the ordeal and says it has no liability in the matter.
MassMutual maintains that the losses racked up by investors in its hedge fund group, Tremont Group Holdings Inc., are their own – and not the responsibility of the insurance company. Tremont had the second-largest loss among Madoff clients after Fairfield Greenwich Advisors, a New York hedge fund that lost $7.5 billion.
