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West Palm Beach (HedgeCo.net) – Preparations are underway for the creation of a new European hedge fund association, hedgemeetings.com, which has the objective to communicate the public utility of this industry for wealth creation and risk management. A first meeting for founding participants will take place this Friday, November 14, in Paris.
Rene Friedrich, 45, who has analyzed and selected hedge funds since 1996, is launching the initiative, as he sees the industry’s advantages undervalued, "There a many opinions about the risks of hedge funds and about the wealth created for their managers, but one sees rarely a balanced view of the general public utility of better asset management in general and of hedge fund work in particular. The realness of the benefits only seems to become apparent when the opposite occurs and wealth is lost in financial markets. The fact is that effective asset management contributes wealth to the economy."
"The initiative aims to give the hedge fund industry a more just image: While individual hedge funds can have more risks than other investment products and investors may lose all or part of their invested capital, the industry overall has, so far this year, avoided the degree of wealth loss of equity investments in general. And a notable number of funds even has avoided losses altogether, no small achievement. It can be argued that future regulations, which could facilitate a greater diversification into hedge funds and funds of hedge funds, may ultimately help to reduce the sum of wealth destructions in cyclical downturns."
"Asset management is not a zero sum game, financial investments are the source of capital in projects, and any wealth created, or not lost, is added, or maintained, in the economy. These are basic principles, and for all the criticisms of financial markets, some just and some not, the objective must be to use what is helping," Friedrich concluded.
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Reuters UK – Artificial intelligence is helping trend-following commodity hedge funds triumph in treacherous markets when human brains alone aren’t enough.
With industry data showing the average hedge fund down 20 percent or more this year due to strategies messed up by plunging commodity and stock prices, some in the game called Commodity Trading Advisors are up 50 percent or more.
But the trend-following CTAs say it isn’t all their work: credit should also go to their computerized trading systems.
"It’s like a computer playing chess against an excellent individual chess player," said Bernard Drury, president and chief executive at New Jersey’s Drury Capital, a CTA relying entirely on systemic trading or trading without discretion.
"The computer can be counted on not to make human errors, not to make a miscalculation, not to be tired and not to have a bad day," said Drury, whose systemic flagship fund is up 57 percent on the year managing about $155 million (98 million pounds) in commodity and financial investments.
CTAs count themselves as part of the $1.7 trillion hedge fund industry, trading in a wide array of markets that include energy, metals, agriculture, financial futures, bonds, stock indexes and currencies. Like hedge funds, they have management fees of 2 percent and performance fees of 20 percent and strive for alpha, or performance beyond market expectations.
Forbes – Russia’s government and central bank must act to lure additional funds into its financial market, President Dmitry Medvedev said on Thursday.
"The government and central bank should undertake all necessary measures to ensure inflows of additional funds into the financial market," Medvedev told reporters ahead of a meeting of government officials on financial markets.
"The situation on the Russian market today does not reflect the real state of the economy," he said. "Russian remains an attractive place for financial investments."
Russia’s stocks fell more than 5 percent on Wednesday to a fresh two-year low as poor performance prompted redemptions from hedge funds ahead of results, while falling oil prices weighed on future prospects.
The sell-off has seen the benchmark RTS index shed nearly half of its value since mid-March.
