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Chicago Tribune - Strong returns are a mixed blessing this year for investment funds that specialize in trading futures contracts.
While the stock market plunged about 35 percent, managed futures funds posted annual returns of about 16 percent, according to the Credit Suisse Tremont Hedge Fund Index.
That makes them one of the few havens for investors at a time when pensions, retirement savings and even prominent local hedge funds such as Citadel Investment Group and Magnetar Capital LLC have recorded big losses.
But the success of managed futures has also left them vulnerable to client withdrawals. Because market turmoil froze the assets in many portfolios, some institutional and individual investors are pulling money from managed futures.
Reuters - A Citadel Investment Group LLC executive who ran an unprofitable credit investment group for the large hedge fund company has resigned, a person familiar with the matter said on Friday.
Joe Russell, who was instrumental in making Citadel’s investments in E*Trade Financial this year and in failed hedge fund Sowood Capital last year, left the Chicago-based firm this week, said the source, who requested anonymity in order to speak freely about the matter.
Russell ran the smallest of Citadel’s three credit groups, and it was the only one that was not profitable.
He resigned amid disagreements over how to manage the group, which like all of Citadel’s credit groups invested in highly leveraged companies, the source said. The group that Russell ran will now be folded into the two other credit groups that concentrate on convertible and structured debt.
Bloomberg - Balyasny Asset Management LP recruited more than 30 money managers and analysts from competing hedge funds in the first eight months of the year, exceeding its total for all of 2007.
“We have been aggressively looking for talent, and in a year like this, there are a lot more candidates out there,” said Barry Colvin, vice chairman of the Chicago-based firm, which oversees $2.5 billion. Hires came from New York-based Satellite Asset Management LP and Magnetar Capital LLC in Chicago, which have both lost money this year.
While more than 200 hedge funds shut down this year, Balyasny, SAC Capital Advisors LLC and Citadel Investment Group LLC are taking advantage of the industry’s worst performance in a decade to go on a hiring spree. Hedge funds, diminished by a scarcity of credit and enfeebled stock markets, fell by an average 4.7 percent as of Aug. 28, according to data compiled by Hedge Fund Research Inc. in Chicago.