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.
Stuff – As the collectivisation of middle class capital accelerated, a multiplicity of managed fund choices emerged to confuse the investor. There are active funds, passive funds, index funds, hedge funds, specialist funds trading in commodities, shares, junk debt, securitised rubbish, mortgages, small cap shares, large cap shares, contrarian funds.
You name it, there is a manager out there for every conceivable flavour of investment approach and every conceivable investment asset. In addition you can buy ethical funds and green funds to tap into the social issues, which by the way underperform but we feel better somehow. (Ethical funds seem to outperform but this is more to do with the weight of money argument (see below) than the underlying performance of the assets).
Reuters – Investors, encouraged by a growing number of acquisitions and public floats in the past few months, are keeping a close eye on a coterie of promising startups in Silicon Valley.
An informal poll of venture capitalists and others pointed to six privately held companies as the ripest for acquisition or readiness to go public, out of 34 cited in industries ranging from alternative energy to social networking.
For now, the Silicon Valley Six say they intend to keep growing rather than agreeing to be acquired or go public during the recession.
Forbes – Investor Timothy Barakett on Tuesday said Atticus Capital, which suffered some of the hedge fund industry’s steepest losses last year, is closing two of its three funds and will return $3 billion to shareholders.
The Atticus founder and chief executive told investors in a letter that he is closing down his flagship fund, Atticus Global, and the $600 million Atticus Trading fund ‘solely’ for personal reasons.
Reuters – Hedge fund firm Citadel Investment Group will return millions to clients who asked to exit last year, but were locked in when its flagship funds lost more than half their value during the financial crisis.
The Chicago-based firm, which invests $12 billion, informed clients on Tuesday it plans to give back $250 million on October 1 and to make another distribution at the end of the year, according to an investor who asked not to be named.
Citadel last year was one of many hedge funds to block investor exits. Now its decision to return the money suggests the worst may be over for the $1.4 trillion hedge fund industry after it suffered its worst-ever losses and record outflows last year.
Kansas City infoZine – The SEC’s complaint, filed in U.S. District Court for the District of Minnesota, alleges that Gregory Bell and Lancelot Management LLC invested more than $2 billion in hedge funds assets with Petters and pocketed millions of dollars in fraudulent fees at the expense of investors in the funds.
The SEC’s complaint also charges Petters with fraud for perpetrating the massive Ponzi scheme through the sale of notes related to consumer electronics. When Petters’s scheme began to unravel, Bell participated in a series of sham transactions to conceal that Petters owed more than $130 million in investor payments on the notes.
CNN Money – Money managers must offer new portfolios and keep cutting costs to survive in an era where frightened investors prefer safer fixed-income funds to stock and hedge funds, a report released Monday showed.
Badly bruised by last year’s financial crisis when tumbling markets and investor redemptions shrank global assets 18 percent to $48.6 trillion, asset managers face more tough times in 2009 and the years ahead, The Boston Consulting Group wrote in its seventh annual asset management industry survey.
Profits will shrivel again, likely falling to 30 percent or less this year from 34 percent at the end of 2008 and 38 percent at the end of 2007, the consultants forecast.
Bloomberg – Dear investor, our statutory obligations demand that we update you on how well we’ve taken care of your money here at Coin-Toss Investment Management.
Attached to this missive is a picture illustrating our fund’s performance this year, showing how wonderfully our back- to-basics approach is working after the derivatives-inspired lunacy of recent years. We’re calling our new strategy “mark- to-flatline” — slow and steady, it sure beats floundering on the double-black expert slopes of last year’s chaotic madness.
Sioux City Journal – Last year’s winning bid for lunch with legendary investor Warren Buffett topped $2.1 million, but given the economic turmoil, who knows if this year’s bidding will approach that level.
Yet Buffett has built a devoted following as demonstrated by the crowd of 35,000 people at his recent Berkshire Hathaway shareholders meeting, and he offers only one lunch per year.
The online bidding begins at $25,000 Sunday in a charity auction that benefits the Glide Foundation, which provides social services to the poor and homeless in San Francisco. The bids will likely escalate significantly before the auction closes Friday evening at 9 p.m. CDT.
Stuff – Hedge funds meeting for their annual get-together in Monaco this week are hoping recovering profits will help placate clients, after the industry was heavily culled and suffered its worst year on record.
An exodus of investors followed a year in which hedge funds saw performance losses of 19 percent, a stark contrast to a decade in which people scrambled to get access to an industry that claimed it could make money in any market.
Significantly, one entire session of the June 16-18 GAIM conference in the Mediterranean resort is titled "The Rise of Investor Power."
Reuters – Hedge funds meeting for their annual get-together in Monaco next week are hoping recovering profits will help placate clients, after the industry was heavily culled and suffered its worst year on record.
An exodus of investors followed a year in which hedge funds saw performance losses of 19 percent, a stark contrast to a decade in which people scrambled to get access to an industry that claimed it could make money in any market.
Significantly, one entire session of the June 16-18 GAIM conference in the Mediterranean resort is titled "The Rise of Investor Power."
Reuters – Improving markets and a need to recoup 2008 losses will prompt investors to pour $50 billion (30 billion pounds) into hedge funds this year and slow redemptions, Barclays Capital said in a report on Tuesday.
More than 300 investors surveyed by Barclays’ prime brokerage unit reported stashing, on average, 14 percent of their portfolios in cash. Nearly 80 percent of these investors said they plan to start putting some of that cash back into hedge funds.
"In spite of dramatic changes in the investor landscape, certain investors were ready to deploy their cash balances aggressively once markets stabilized," Brian Reilly, a Barclays Capital managing director, said in a statement.
Bloomberg – Fion Ye, who led the Pinpoint Rising China Fund to a 70.9 percent gain last year, has started a new asset management company aiming to profit from the country’s growing sway over global commodity markets.
Ye and former Pinpoint Investor Advisor Ltd. Chief Executive Officer Alex Li are setting up the Hong Kong head office for Everest Investment Advisors Ltd. Their first fund began investment on May 4 with initial capital of about $45 million, 60 percent of which came from outside investors, Li said in an interview yesterday.
