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.
West Palm Beach (HedgeCo.net) – The Energy Hedge Fund Center (EHFC) announced that it has added a ‘green’ hedge fund directory to its product inventory. EHFC’s Directory of Energy Hedge Funds was launched four years ago, but with the interest in ‘green’ hedge funds, the company has created a new green directory for investors. The directory includes carbon, renewable, cleantech, forestry, water and weather derivative funds.
"We decided that now was the time for a standalone green directory and will be offering it for prepublication in January 2009," said Peter Fusaro, co-principal of the EHFC. "The market is now large enough and growing to warrant this service with over 100 green hedge funds."
"EHFC has received innumerable requests for such a product this last 12-months or so as investor appetite for environmental and alternative energy has increased," reports Dr. Gary M. Vasey, Co-Principal, EHFC. "As a result we have complied with that demand and have now added a new directory that focuses on just the ‘green’ hedge funds."
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Globe and Mail – This is how bad things are for hedge funds right now. On the CanadianHedgeWatch.com website, a hub for the hedge business, the lead article one recent day was headlined "The hedge fund collapse."
The article, which originally appeared on the Portfolio.com website, tells us that as many as half the 10,000 hedge funds that existed earlier this year could fail or be wound up in the next 12 months. Outsmarted by the financial crisis of 2008, some prominent hedge fund managers lost 20 to 65 per cent of their assets even before October came. "The hedge fund mystique died with the crash of 2008," the article says.
The mystique is dead for sure, but hedge funds are not. The Horizons Global Contrarian Fund proves it.
What we have in Horizons Global Contrarian is a hedge fund of the old school. Rather than acting as a supercharged equity fund willing to push all risk boundaries, it tries in a measured and conservative way to make money no matter what the stock markets are doing.
Bloomberg - Man Group Plc, the largest publicly traded hedge-fund manager, rose in London trading after its biggest pool reported gains for a fourth consecutive week.
“It increases the probability that they will be earning performance fees on the fund,” said Gurjit Kambo, an analyst at Numis Securities, who rates the stock an “add.”
AHL Diversified Plc gained 1.9 percent in the week to Oct. 20, and is up 12 percent in the past 12 months, Man said in a statement yesterday. AHL, whose computer-trading program dictates about a third of Man’s investments, is now closer to its so-called high-water mark, the level above which the firm begins to collect performance fees.
London-based Man rose as much as 6.1 percent and was up 14.5 pence at 368.5 pence by 10:10 a.m. The stock has gained 16 percent so far this week, valuing Man at about 6.3 billion pounds ($10.3 billion).
USA Today – Given the stock market’s wretched performance this year, your current retirement plan may involve a modest part-time job, such as woodworking or forgery.
Before you take up a life of crime, however, remember that really rotten markets sometimes uncover opportunities. In fact, the worse the market, the more bargains you can find. And right now, you can buy stocks and bonds of the nation’s best-run and most profitable businesses at astoundingly low prices. What’s more, you can collect dividends and interest while you wait for the economy to recover and for other investors to regain their senses.
First, and let’s not whitewash things here, the current market has all the appeal of a weekend in the local viper pit. The Dow Jones industrial average plunged 679 points on Thursday alone; it has shed 5,585 points, or 39%, in the past 12 months.
Cayman Net News – Despite the ongoing housing crisis in the US, the credit crunch, and the general slowing of the American economy the number of hedge fund terminations in the most recent financial year has been only slightly higher than last year.
Caroline Williams, a partner at Walkers told Cayman Net News: “It is interesting that the number of hedge fund terminations in the last financial year is only slightly higher than in the previous 12 months.
“In some cases where funds have run into difficulties, the hedge fund manager has employed certain techniques to try and weather the storm and continue trading, such as imposing gates, which limit the amount of redemptions that can be made, or by creating side pockets in which the illiquid or hard-to-value securities are placed.
“Overall, for both investors and hedge fund managers, the winding up and dissolution of a hedge fund is very much a last resort and as such these situations are quite rare. Investors prefer to avoid having the fund wound up and dissolved, because they realise that there is less chance that they will have their benefits maximised.”
Ospraie Management, the US hedge fund led by Dwight Anderson, has seen about $1bn (€678m) in value being wiped out of Ospraie Fund, its biggest, over the last 12 months amid misplaced bets on commodities, according to a report in The Wall Street Journal.
The fund, which is believed to have peaked near $3.8bn in assets late last year, has fallen more than 20% this year as of this week, continuing a downfall that amounted to a negative 13% return in July alone.
Overall, Ospraie, in which Lehman Brothers controls a 20% stake, manages about $9bn in assets. Its investment strategy is focused on energy, financials, retail and health care.
Al-Bawaba – The Global Islamic Funds of Funds has demonstrated excellent performance in terms of returns and stability and has consistently outperformed other funds in the same category.
Global Investment House “Global” announced today that its Global Islamic Fund of Funds was ranked number one in July 2008 by Zawya. The Fund recorded a +5.72% YTD return and was posted on the homepage of the Zawya platform, where only leading funds make it there.
Global launched the fund in July 2007 in order to actively evaluate and invest in the growing number of Shari’a compliant products. With a dynamically evolving Hedge Funds team and an established track record of erudite investments across 80 different hedge fund managers, this fund has greatly benefited from the experience of the Hedge Fund team.
Mr. Omar El-Quqa, Executive Vice President at Global said, ”It is worth mentioning that, in the first 12 months since inception the fund has recorded a creditable performance of 11.00%, of which nearly 6% has been achieved in the first half of 2008”. Mr. El-Quqa further added, ”It must also be noted that on a panoramic landscape, clouded by credit crisis in the global markets, where the shallow waters of uncertainty threatened to return, this fund has done tremendously well. One of the key element to this performance is that the fund adopts aggressive strategies accompanied by low volatility of only 4.5% as compared to the other Islamic funds that portray high volatility”.
InvestorDaily- While Australian superannuation funds and institutional investors have discovered hedge funds, their participation is not to the extent of most of their developed market peers.
But the current market downturn may change that behaviour, because the juicy returns they had become used to from the traditional asset classes have disappeared for the moment.
"The industry super funds were early adopters of hedge funds, but for most other dealer groups and institutions, they didn’t have the imperative in 2003-2007 to look fully into alternative assets, because traditional ones were motoring along so well," Lonsec head of investment consulting Amanda Gillespie says.
"When you’ve got investors and advisers looking at the phenomenal returns we’ve seen in traditional markets – up until the last 12 months – it’s been a really hard sell to talk them into making really big allocations to alternatives in that environment. But I think that more of them are ready to look at alternative investment categories now."
Reuters UK- A near one year-old credit crunch still has plenty of venom and will sting global financial markets and the economy well into next year or even into 2010, a Reuters poll found.
On the eve of its one-year anniversary at the start of August the credit crisis is still spitting out victims and darkening the outlooks from global central banks.
Most of the 87 economists polled from across Europe, the U.S. and Canada said the worst was not over and most felt that the fallout would last for another six to 12 months at least.
The sudden rescue plan for U.S. mortgage finance agencies Freddie Mac and Fannie Mae arranged by the U.S. Treasury and the collapse of IndyMac bank last week has 34 economists forecasting the crisis will roll on for another year or even more.
BOSTON (Reuters) – Keeley Asset Management, which made its name by selecting small and forgotten companies, said on Wednesday that it took an 18 percent stake in beleaguered money manager Pzena Investment Management.
Keeley now owns 1.09 million Pzena shares, making it one of the company’s biggest owners, according to a regulatory filing.
"They have been through some pretty tough times in the last 12 months, but we still think they are a pretty good shop," said Mark Keeley, who oversees marketing for Chicago-based Keeley, a 26-year-old, family-owned investment firm.
Reuters – Jerome Abernathy has a proposition for the world’s biggest pension funds — better returns than hedge funds without the headaches or heavy costs.
This may sound too good to be true to institutional investors, who have poured billions of dollars into the loosely regulated $2 trillion hedge fund industry in the hope of earning better returns, even as they worry about poor performance and the possibility a fund will fail.
But Abernathy, a money manager armed with electrical engineering and computer science degrees, is quietly convincing skeptics with proof that his Alternative Beta Fund delivers exactly that by investing in indexes instead of managers.
Sometimes called a "synthetic" hedge fund product or a "hedge fund replicator" — a phrase Abernathy said he dislikes because it sounds pejorative — the $250 million fund ended its first 12 months of trading in April with a 3.18 percent return after fees. That trumps the average hedge fund’s 1.78 percent return during the same period, Hedge Fund Research data show.
