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.
New York (HedgeCo.net) – Jean-Philippe Blochet has left Europe’s biggest hedge fund firm, Brevan Howard, Bloomberg reported today. “Following his return from sabbatical last year, Jean-Philippe Blochet has decided to cease to be an active member of Brevan Howard Asset Management LLP,” the firm said in a statement.
Blochet was co-founder of Brevan Howard and was part of the hedge fund firm’s macro team, focusing on currencies and interest rates.
Brevan Howard had $25.7 billion in assets under management as of September 2009, it returned more than 20% last year while the average hedge fund lost around 19%.
Also leaving Brevan Howard is UCITS fund manager Stephane Diederich, who was hired from Credit Suisse in 2007 to set up an alternative CDO (collateralized debt obligation) business, an area of the financial world that was hit hard by the credit crisis, Bloomberg reported.
European Voice – Europe may be laying the foundations for the next financial bubble, through its monetary, industrial and regulatory policies.
In the midst of the worst crisis in half a century, it is easy to forget that the real problem is not the bust but what preceded it: a boom filled with bad investments.
The boom was a natural consequence of too much easy money for too long. That policy was itself a response to the bursting of the dotcom bubble, to which Alan Greenspan and the Federal Reserve responded by cutting interest rates from 6.5% to 1% – and keeping them that low for a whole year. The result was a market drowned in cheap money.
Reuters – Wall Street was set to open flat on Thursday, with investors eyeing retail sales and weekly jobless data for fresh insight into the state of the recession-hit economy.
* Investors will watch a 30-year treasury note auction for direction on interest rates, one day after a weak 10-year auction sent yields on the benchmark note to a eight-month high. The latest results are due at 1 p.m. EDT.
* Stock investors have been concerned that rates may dampen an economic recovery by increasing borrowing costs for consumers and businesses and are drawing money away from the stock market.
Alibaba News Channel – Hedge fund firm 36 South said on Monday it had launched a "high risk/high return" fund designed to protect investors’ portfolios against a surge in global inflation. The Excelsior fund will target returns of five times the rate of inflation in the G5 group of economies, if that inflation rate exceeds 5 percent, by buying long-dated out-of-the-money options across assets such as equities, commodities, currencies and interest rates, the firm said in a statement.
However, if the rate of inflation stays below 5 percent then investors could lose all their money, a spokesman said.
"Inflation is the single greatest risk facing the world economy at present," said 36 South director and founder Jerry Haworth.
"Whilst the prevailing view is that a sustained period of significant global inflation is unlikely, investors need to be attuned to this risk and the devastating effect it will have on their portfolio should this scenario come to pass."
The Associated Press – Relations between President Barack Obama and U.S. corporate leaders have grown tense in recent weeks, with business groups bristling over his sharp rebukes of lenders and multinational companies in particular.
Executives and trade groups that praised Obama’s outreach during his post-election transition period say they have felt less welcome since he took office in January. More troubling, they say, are his populist-tinged, sometimes acid critiques of certain sectors, including large companies that keep some profits overseas to reduce their U.S. tax burden.
On Thursday in New Mexico, Obama chastised the credit card industry for sharply raising interest rates or fees with hard-to-find notice. He said consumers should be protected from "all kinds of harsh penalties and fees that you never knew about." Some of the dealings by credit card companies, he said, "are not honest."
Bloomberg – Octagon Capital Management Pte, run by former managers of the Government of Singapore Investment Corp.’s quantitative-investment group, plans to start a fund that seeks to profit from broad economic trends.
Octagon, which uses computer models to pick trades, will raise money “in the near future” for a quantitative macro fund that wagers on currencies, equities, interest rates and commodities in Asia, said Lam Poh Min, 39, co-founder of the Singapore-based hedge-fund firm, in an interview. The firm is looking for a “more opportune time” to start the fund, Lam said yesterday.
Reuters – President Barack Obama will weigh in on Thursday on the lending practices of U.S. credit card companies, an issue that has triggered an outcry from consumers hit with high fees and interest rates.
Obama has joined a push by lawmakers to rein in credit card practices that his aides have labeled as "abusive" and plans to air some of his concerns at a White House meeting with 13 executives from top banks and companies that issue the cards.
American Thinker – The credit system has broken down. Banks have cooled on lending (maybe because they are not sure if the Obama administration will force a cram down in the future that would result in their loans being worth much less than they thought?). But the system also relies on hedge funds to purchase loans that banks make and package as securities.
Hedge funds would stand ready to buy these loans from banks, releasing more money that could then be used to make additional loans. Hedge funds-often heavily leveraged-made billions over the years with these types of securities. They often rode a wave of lower interest rates that inflated the value of their holdings. It was relatively easy money (especially if you were sophisticated and large enough to borrow overseas in Japan where interest rates were miniscule).
Seeking Alpha – Ken Griffin’s Citadel has plans to roll out a few more funds, even after Citadel’s flagship funds had a rough year in 2008. One will focus on currencies and interest rates, one will focus on stocks, and another will focus on convertible bonds.
Citadel is trying to roll out lower fee funds in an effort to attract more investors. Additionally, it’s hoping to raise $2-5 billion for the Global Macro Fund.
Reuters – Artradis Fund Management, Singapore’s largest hedge fund manager, said on Monday it has hired David Dredge from Royal Bank of Scotland as managing director for portfolio management.
Dredge was deputy global head of local markets at RBS as well as its head of local markets trading and risk management in Asia. He is also deputy chairman of the Singapore Foreign Exchange Market Committee.
Artradis said in a statement it saw opportunities in foreign exchange and interest rates, and has re-opened two of its funds to take in fresh money from investors.
HedgeCo.net – Artradis Fund Management, Singapore’s largest hedge fund manager, said on Monday it has hired David Dredge from Royal Bank of Scotland as managing director for portfolio management.
Dredge was deputy global head of local markets at RBS as well as its head of local markets trading and risk management in Asia. He is also deputy chairman of the Singapore Foreign Exchange Market Committee.
Artradis said in a statement it saw opportunities in foreign exchange and interest rates, and has re-opened two of its funds to take in fresh money from investors.
Reuters - U.S. hedge fund Citadel Investment Group LLC plans to roll out several new funds, including one with lower fees that will aim to make money on currencies, interest rates and other trades based on broad economic trends, the Wall Street Journal reported.
Citadel could not be reached for comment.
The firm hopes to raise $2 billion in coming months and could raise $5 billion for its new Citadel Global Macro Fund Ltd, the paper said citing marketing documents.
