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.
Forbes – Markets around the world have been rallying all year. So how did Polygon’s flagship hedge fund manage to lose money?
Polygon Global Opportunities Master Fund delivered a negative 2.92% net return as of June 30, lagging far behind other so-called multi-strategy funds which invest across a broad spectrum of asset types. Relative value and multi-strategy funds have returned 13.08% in the first half of this year, according to Hedge Fund Research, a Chicago-based firm that tracks the performance of these lightly-regulated investment pools.
New York (HedgeCo.net) – Richard H. Baker, President and CEO of the Managed Funds Association (MFA) wrote a letter to MFA members this afternoon, highlighting today’s announcement by the Obama Administration requiring all advisers to hedge funds and other private pools of capital, including private equity and venture capital funds, to register with the Securities and Exchange Commission (SEC).
Baker highlights how the Administration’s proposed legislation would:
* eliminate the private adviser exception in the Investment Advisers Act and require hedge fund managers and other investment advisers to private investment pools with at least $30 million in assets under management to register with the SEC;
* eliminate the exemption from registration in the Advisers Act for certain commodity trading advisors registered with the CFTC if the commodity trading advisor acts as an investment adviser to a private fund (defined as a company that would be an investment company under the Investment Company Act of 1940 but for the exceptions contained in Section 3(c)(1) or Section 3(c)(7));
* give the SEC authority to require investment advisers to maintain records and submit reports of information relating to both the adviser and funds it manages, in order to allow for the supervision of systemic risk by the Board of Governors of the Federal Reserve and the Financial Services Oversight Council, and to provide such information to the Board and Council. The reported information must include at least, for each private fund, the amount of assets under management, use of leverage (including off-balance sheet leverage), counterparty credit risk exposures, trading and investment positions, and trading practices. Each adviser must maintain records of such information and make them available to the SEC upon request, and would be subject at any time to periodic, special, or other examinations by the SEC. Information provided by the SEC to the Board or Council would be kept confidential.
* give the SEC authority to require investment advisers to provide reports, records and other documents of private funds to investors, prospective investors, counterparties, and creditors, for the protection of investors or the assessment of systemic risk.
* permit the SEC to keep confidential any information in reports required to be filed with the SEC, except pursuant to requests from Congress or other federal agencies
* provide the SEC with the authority to define the term ‘client’ differently for different purposes of the Advisers Act and clarify other aspects of the SEC’s rulemaking authority with respect to registered investment advisers.
Click here to read the Administration’s press release announcing the proposed legislation.
Denver Post – Hedge funds are being offered a deal to help the feds rescue the banking system: A low-risk opportunity to buy bad bank assets that could one day make them a killing.
But the deal could make for an uneasy partnership. The government also wants to closely police hedge funds — large investment pools that cater mainly to the rich — some of which have been accused of placing irresponsible bets that helped trigger the financial crisis. Such regulatory overhaul could reshape an industry known for secrecy and little oversight.
The Columbus Dispatch – The hedge-fund industry, battered and humbled by the market downturn, no longer is planning to fight an increased role for government in regulating and inspecting the secretive investment pools.
Opposition has melted away as the market decline and prominent frauds have shattered the confidence of the pension funds, university endowments, charities and wealthy individuals who invest in the exclusive investment pools.
Bloomberg – Like plenty of financial players, hedge funds are taking a beating.
Many once-high-flying managers have been swamped by losses. Others have abandoned the business after discovering it wasn’t such an easy path to riches. Even some of the biggest firms — Citadel Investment Group LLC, D.E. Shaw Group and Tudor Investment Corp., among others — have had to block investors from withdrawing money.
This is great news for, well, hedge funds and their investors.
The retrenchment might force hedge funds, lightly regulated investment pools, to rediscover what they once were — small, guerrilla investors focused on returns, not artery-clogging management fees.
