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.
Reuters – Bayswater Asset Management, a computer-driven hedge fund shut down last year after big losses during the credit crisis, has relaunched after revamping its risk management controls, its new backers said on Wednesday.
San Francisco-based Bayswater had initially been backed at its launch in 2004 with $25 million (15 million pounds) from Man Global Strategies, part of hedge fund giant Man Group.
However, its strategy of trying to exploit inefficiencies in global markets lost 12 percent in the six months to September 2007 and it returned money to investors after being caught out by a vicious circle of deleveraging in July and August that hit many computer-driven funds.
Bloomberg – Let’s say you hand a million dollars or more to an investment advisory firm that boasts a sterling reputation, grand results and a promise to thoroughly investigate hedge funds before recommending them.
For all the claims of super due diligence, this fine firm sinks your money into what turns out to be a Ponzi scheme.
Now your money is gone and the hedge fund founder who lost it is serving 20 more than years. Federal regulators belatedly find that your adviser didn’t actually do that much due diligence.
The Bayou Group hedge fund it put you into hadn’t had an independent audit almost since its beginning when an initial auditor noticed consistent losses and was let go, according to the Securities and Exchange Commission.
Reuters – Hedge funds stand to make gains from convertible bonds arbitrage again after last year’s huge losses decimated the sector, though improving markets have made the job more complicated.
Managers have been using a simple "buy and hold" strategy to ride a big bounce in depressed bond prices so far this year, enjoying gains of nearly 30 percent.
British asset manager Blue Crest is winding down its Specialty Asset Finance Fund after losses and redemptions forced the fund to close many positions at a heavy loss, sources familiar with the fund told Reuters.
BlueCrest declined to comment on the fund.
Three industry sources said the fund, which had assets of $200 million late last year, is one of many using an asset based lending (ABL) Strategy to be vexed by redemptions this year, with leveraged funds such as BlueCrest’s hit particularly hard.
Stuff – Hedge funds are living up to their high-flying reputation again with strong returns in the last three months, but many investors burned by last year’s losses are clamoring for reforms before committing new money.
Final June quarter data will not be released until next week, but Merrill Lynch analysts who track returns in the $1.3 trillion industry wrote on Monday that hedge funds will likely post their best quarterly performance since early 2000.
Reuters India – Hedge funds are living up to their high-flying reputation again with strong returns in the last three months, but many investors burned by last year’s losses are clamoring for reforms before committing new money.
Final June quarter data will not be released until next week, but Merrill Lynch analysts who track returns in the $1.3 trillion industry wrote on Monday that hedge funds will likely post their best quarterly performance since early 2000.
Assan Din, a former Lehman Brothers Holdings Inc. credit trader, is setting up a hedge fund to trade corporate bonds and derivatives in Asia.
SaKa Capital’s fund, which will have a capacity of more than $500 million, will start in September with $25 million to $50 million sourced mainly from founding members and friends, Din, 38, said. The Singapore-based firm will subsequently raise capital from institutional investors, including U.S. pension funds and endowments, once it builds a track record, he added.
Times Online – Hedge funds are on course to deliver their best first-half performance in a decade, as investors renew their faith in the sector in the wake of last year’s calamitous losses.
Hedge funds worldwide returned 5.63 per cent to their investors in the year to last Thursday, according to Hedge Fund Research (HFR), the Chicago-based research firm that compiles daily statistics on performance.
Strategies that predict big directional market moves made profits of 12.52 per cent over the period as equity markets in Europe, the US and Asia-Pacific posted strong gains and liquidity gradually returned to the credit markets.
Caymen Net News – Hedge funds and financial institutions based in the Cayman Islands have been pulling their money out of Britain as they are hit by the credit crunch, according to figures from the Bank of England. The low-tax regime and limited regulation of the Cayman Islands – with a population of 52,000 – has attracted 80% of the world’s $1.3tn (£790bn) hedge fund industry.
The drop in Cayman Islands’ deposits comes as hedge funds are being forced to return money to investors who have made big losses from the financial crisis. Loans from UK banks to Cayman institutions also fell, but at a lower pace. Outstanding loans from UK banks to Cayman institutions outweighed Cayman deposits in UK banks by $124bn in the first quarter, a sharp increase from $12bn in the last quarter of last year, the data shows.
Reuters – Hedge funds are crawling back to life after a turbulent 2008 that has almost halved their assets, and fewer but stronger survivors are set to regain their leverage to chase bargains in a less competitive environment.
Hedge funds, which manage their portfolios aggressively with various advanced strategies including derivatives to gain higher returns, suffered double-digit losses last year after global stocks and commodities tumbled because of the credit crisis.
As a result of client redemptions, the amount of investor capital managed by single-manager hedge funds might have halved to close to $1 trillion by mid-2009 from the 2008 peak of $2 trillion (1.2 trillion pounds), according to the European Central Bank.
Hedge funds and financial institutions based in the Cayman Islands have been pulling their money out of Britain as they are hit by the credit crunch, according to figures from the Bank of England.
The low-tax regime and limited regulation of the Cayman Islands – with a population of 52,000 – has attracted 80% of the world’s $1.3tn (£790bn) hedge fund industry.
Those institutions have almost halved their deposits in UK banks over the past 12 months, from $356bn at the end of the first quarter in 2008, to $173bn at the end of March, Bank of England data shows. The drop in Cayman Islands’ deposits comes as hedge funds are being forced to return money to investors who have made big losses from the financial crisis. It also reflects fund losses from falling markets.
The outflow of funds from Britain puts the spotlight on hedge fund threats to abandon the UK because of higher taxes, tighter regulation and potential caps on executive pay and bonuses.
Bloomberg – Asian hedge funds are attracting growing interest from investors as managers focusing on the region outperform global peers, said Andrew Hill, director of prime finance for Asia-Pacific markets at Citigroup Inc.
“There are pockets of proprietary money looking to be put to work in Asia,” Singapore-based Hill said in a June 12 interview. “There is going to be an outsized investment back into Asia. Some of the big pensions are going to be looking at Asia; it’s coming onto the radar screens.”
Asia-focused hedge funds gained 12.4 percent in the first five months of the year, outpacing returns in the U.S. and Europe, according to Eurekahedge Pte. That’s a reversal from last year, when clients withdrew almost $24 billion from the region’s hedge funds as managers posted bigger losses than global peers, the Singapore-based industry data provider reported.
