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.
CNN Money – John Costas, who helped make UBS AG into one of the world’s biggest investment banks, wants to build a lasting Wall Street player — and put the 2007 demise of hedge fund Dillon Read Capital Management behind him.
Costas and long-time partner Michael Hutchins have launched The PrinceRidge Group, a boutique broker-dealer that is, for now, focused on trading mortgage and corporate debt.
Over time, though, he intends to expand into a mid-size investment bank, seizing "unprecedented" opportunities created by the shake-up on Wall Street.
U.S. News & World Report – Andrew Lo, hedge fund manager and director of MIT’s Laboratory for Financial Engineering, is a long-time student of investor behavior, especially the sort that belies the notion that markets move with cool efficiency. Particularly today, he sees animal spirits lurching about in some worrisome ways that could have long-term consequences for markets and the economy. "The big message is that right now all, of us are in a state of emotional shell-shock," he says. That goes for investors, regulators, bankers, and anyone else unlucky enough to get caught up in the fear and uncertainty flowing through the current financial crisis.
In this two-part Q&A with U.S. News, Prof. Lo discusses the best way to build a robust regulatory system for the financial sector (part one is here.) Below, he considers what massive changes in the investment landscape over the past few years might mean for your investments:
Forbes – Commodity prices will remain low for a long time, possibly up to 7 years because of the global recession and falling demand, hedge fund Red Kite told a British newspaper.
Michael Farmer founder of Red Kite, a big player in the industrial metals markets, told the Financial Times the world economy has gone from boom to bust and that markets are going to be bust for a while.
Reuters – Hedge fund manager PMA has the capacity to manage as much as $4 billion without curtailing returns given current market opportunities in Asia, its chief executive said in an interview.
The Hong Kong-based firm, which now manages about $2.5 billion, has also seen significant inflows into its funds this year despite the downturn in Asian financial markets, PMA CEO Farhat Malik said.
"The way that the platform is structured at the moment, in terms of capacity, in terms of investment opportunities that we see in the marketplace, we can easily go from $2.5 billion to $4 billion, we feel without sacrificing performance," he told Reuters in an interview late on Tuesday.
"We’ve had significant inflows from institutional investors outside of Asia," he added.
Guardian.co.uk – Hedge funds are known for playing many roles on Wall Street, but last-resort lender to small businesses that are turned down by banks is hardly one of them.
Yet with the credit crunch pushing many major U.S. banks to set tougher lending standards for small and medium-sized businesses, hedge funds have stepped in.
The money isn’t cheap, with interest rates of 14 percent or more. But small businesses have few places to turn.
"A major void has been created in the marketplace by banks tightening their credit standards and trying to stabilize their balance sheets," said David Grin, co-founder of Laurus-Valens, a hedge fund with around $1.7 billion under management. "From the investment point of view, this is as good as it gets."
Laurus-Valens provides loans to public and private companies with average revenues of $30 to $50 million. The fund charges interest rates of about 10 percent to 11 percent, and takes equity stakes in the companies.
CNBC- For the first time, more hedge funds will fail this year than are originated, according to Philip Duff, of Duff Capital Advisors.
In a rare interview with CNBC, Duff said the difficulty in gauging the health of banks has made it a challenging year for the fund industry.
"The dream of starting a hedge fund has been an enormous pull for people coming in off the streets," he said. "At the same time, delivering a consistent risk-adjusted return … is not an easy thing to do."
Yet Duff said the future continues to be strong for hedge funds. He welcomed more government regulation and predicted that as investment banks continue to experience problems funds will continue to grow.
"I think the hedge funds will take over a lot of the roles of investment banking in the basic function of intermediating capital and intermediating risk in the marketplace," he said. "I do think there will be more regulation, and I view that as a good thing."
Reuters UK- Polling and research group YouGov said on Monday it is aiming to raise up to $50 million (25 million pounds) for the launch of a hedge fund that will use polling data to highlight lucrative investment strategies.
The YouGov Alpha fund, which will be managed by investment boutique Four Capital, aims to gain an investment edge through YouGov’s research, which it believes can highlight areas where the stock market is being too optimistic or pessimistic, for example in retail sales.
"We’re looking to use it where the signals we get from the YouGov research are almost diametrically opposed to signals in the marketplace," said Four Capital fund manager Chris Rodgers, previously head of HSBC Halbis Partners’ UK Equity team and a senior fund manager at Schroders
LONDON (Reuters) – Polling and research group YouGov said on Monday it is aiming to raise up to $50 million (25 million pounds) for the launch of a hedge fund that will use polling data to highlight lucrative investment strategies.
The YouGov Alpha fund, which will be managed by investment boutique Four Capital, aims to gain an investment edge through YouGov’s research, which it believes can highlight areas where the stock market is being too optimistic or pessimistic, for example in retail sales.
"We’re looking to use it where the signals we get from the YouGov research are almost diametrically opposed to signals in the marketplace," said Four Capital fund manager Chris Rodgers, previously head of HSBC Halbis Partners’ UK Equity team and a senior fund manager at Schroders.
