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.
Pensions & Investments – While every move of the New York State Common Retirement Fund is in the spotlight these days, what the bright lights don’t reveal are the dramatic improvements in the fund during the past two years.
An alleged massive pay-to-play scheme centered on the fund’s alternatives investments while Alan G. Hevesi held the New York state comptroller’s position from 2002 through 2006 has dominated the news about the pension fund for more than a month.
Mr. Hevesi’s successor, Thomas P. DiNapoli, immediately began reforming the investment department of the Albany-based fund once he took the helm in February 2007.
Seeking Alpha – If someone was asked to name a fund in the global macro game, undoubtedly Tudor Investment Corp or Moore Capital Management would be among the most frequent responses. The global macro strategy has fared well in the world of hedge funds. Paul Tudor Jones’ Tudor Investment Corp has earned an annualized return of greater than 20% over the span of two decades.
Louis Bacon’s of Moore Capital Management shares the same accolade. And, while they are both down this year, they have fared much better relative to many of their peers and the market indexes in general. Tudor’s flagship fund finds itself -5% for the year, while Moore was -2.9% year-to-date through November as we noted in our November hedge fund performance update.
But, in a never-ending quest for outperformance, Tudor and Bacon want more. And, in order to accomplish that, they see it fit to return to their roots.
Bloomberg – Van Biema Value Partners LLC, led by a former Columbia Business School professor, started a new fund to invest in Asian hedge funds while plunging markets and client withdrawals force rivals to scale back investments.
The Cayman Islands-domiciled van Biema Asia Value Fund Ltd. started on Aug. 1 with about $215 million from one of the company’s institutional clients, van Biema said in a statement issued through PR Newswire yesterday.
“Our niche, the value discipline, has demonstrated, over the long term, significant outperformance over market benchmarks,” the statement said.
Michael van Biema, who taught finance subjects including value investing at Columbia Business School from 1992 before founding his partnership in 2004, started the Asia fund as market declines and the worst hedge fund performance in 19 years force other funds of hedge funds to reduce investments and switch to cash to cope with investor redemptions.
Seeking Alpha – Sailors out there will know that boats can sail down with the wind - like a leaf being blown across the water – or into the wind at an angle, zigzagging back and forth along the way. Sailing downwind is easier and since it offers a direct path from A to B, and is therefore faster. Zigzagging directly upwind, on the other hand, requires more skill and is much slower. But who would want a boat that could only sail along with the direction of the wind? This is where sailing can offer a useful lesson for hedge fund investors.
Since the beginning of the last bull market, questions have been raised about the high correlation between hedge funds and equity markets. Arguably, this relationship gave birth to the field of hedge fund “replication” (a field that now involves a wide variety of “alternative” betas as well).
But all along, hedge funds have said that when markets rise, why shouldn’t they try to capture all this upside – and then some? The value in alternative investments comes not necessarily from their consistent absolute outperformance, but in the option-like behaviour of their returns. In other words, your “2 and 20″ buys you a market put. Long-only managers, hedgies are apt to say, simply don’t have the ability to make dramatic adjustments to net exposure in response to market gyrations.
