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 – The investment banks and global hedge funds that are the usual buyers of debt and equity in struggling Asian companies have largely fled the market, leaving the distressed asset space to home-grown investors.
Local players with the cash — and the stomach — to remain in the hunt for cheap assets find themselves with the luxuries of time, choice and pricing power.
"We’re just taking our time and doing our homework, because a lot of the traditional buyers are not in the market," said Chris Gradel, managing partner at Hong Kong-based Pacific Alliance Group, which runs $1.6 billion in hedge funds.
People – Bowing to Europe’s enthusiasm fora new global financial order, U.S. President George W. Bush has agreed recently to host a world summit on reforms of the international financial system.
After a weekend meeting at Camp David some 100 km north of Washington D.C., Bush said in a joint statement with French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso that the summit would "seek agreement on principles of reform needed to avoid a repetition of the problems and assure global prosperity in the future."
It was regarded as a victory for European Union (EU) leaders, who are pushing hard for an overhaul of the current global financial system in the wake of the financial crisis.
Europe has become a big victim in the financial crisis, which originated in the United States. As European banks are still struggling with tight credit triggered by the U.S. sub-prime mortgage defaults, Europe learned it can hardly be separated from the United States.
Guardian Unlimited – After being accused of precipitating the present financial crisis by short-selling banks, hedge funds are now turning their attention to student loans.
Jim Chanos, founder and president of Kynikos, one of the best known short- selling hedge funds in the US, has student loan companies high on his list to short for the foreseeable future.
‘This industry has much in common with the sub-prime mortgage industry,’ Chanos said. ‘Things do not look very bright.’
They don’t. More than two-thirds of American university students rely on loans to pay for college, but loan applications are being turned down in record numbers as the near collapse of the credit market is making all but the most secure loans impossible to write.
Independent – Hedge funds could have an unprecedented level of cash pulled out by investors this quarter, according to insiders, just as they faced millions of pounds of losses from last week’s shock regulation of short selling. It has been a tough year for the industry with high-profile funds blowing up, clients increasing redemptions, as well as public fury over short selling and increased threats of regulation.
One hedge fund expert pointed to The Hedge Fund Implode-O-Meter (HFI) as how he judges the state of the industry. The HFI was set up online in the wake of the credit crunch "to track as hedge funds learn the double-edged-sword nature of the often extreme leverage they use".
The group’s "imploded funds" list has hit 51 companies since the sub-prime mortgage crisis in the United States kicked off a widespread downturn. That compares with its historical list, stretching back more than a decade to the end of 2006, of just 14, including the collapse of Long-Term Capital Management and Amaranth.
Folks, I want to share some information with you on "hedge funds."
I have wanted to do this for some time now, but it seems each week some other topic pushes this one aside.
Hedge funds are simply large – no, huge is a better term – piles of money. The very rich and very large institutions, like pension funds and banks, give billions of dollars to a "money manager" to play with. These funds aren’t used to produce anything. They are mainly for the manipulation of markets.
Hedge funds are the least regulated of all money institutions. That in itself is scary because when we deregulated the savings and loan industry, greed cost the taxpayer, you and me, in the neighborhood of $750 billion. Then, when we deregulated the banking industry, it cost us, the taxpayers, $500 billion to save banks from their own greed. This was the recent sub-prime mortgage fiasco. And of course the sub-prime problem not only cost taxpayers, it also cost home owners a number too large to write in this space, in lost home value.
