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.
New York (HedgeCo.Net) – Credit Suisse’s Quantitative Equities Group released a new whitepaper, “Equity Market Neutral: Diversifier Across Market Cycles,” outlining the potential benefits of an Equity Market Neutral strategy. The paper details the various types of Equity Market Neutral funds as well as the traits which have historically helped the best managers stand out.
Equity Market Neutral (EMN) funds have been generally successful in profiting from a variety of environments and have provided an effective counterbalance in diversified portfolios during periods of market volatility, such as following the Lehman Brothers bankruptcy in September 2008. The findings of the paper suggest that:
EMN is a potential diversifier given the low beta it showed to the 2008 equity markets in what was a historically volatile year
EMN has lower annualized volatility than other hedge fund strategies over the long term and has provided generally positive risk-adjusted returns over the last ten years
After the significant market dislocation experienced by quantitatively managed funds in August 2007, many managers increased the range of data used, including building proprietary data and risk models, in an effort to try to mitigate the effects of a future mass deleveraging event
In order to achieve diversification within the strategy, investors should seek managers who work with a range of uncorrelated factors and proprietary models in order to avoid crowded trades. This diversification of factors and models was a key element in the strategy’s ability to weather market volatility in 2008 and will likely remain the cornerstone of alpha generation for the strategy going forward in the near term
EMN managers see the post-Lehman landscape as opportunity-rich for the strategy because there is less capital being deployed as well as less competition in program and high-frequency trading.
Editing by Alex Akesson
For HedgeCo.net alex@hedgeco.net HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
West Palm Beach (HedgeCo.net) – Arden Asset Management LLC, a leading independent fund of hedge funds manager, and J.P. Morgan today announced an agreement under which Arden will manage a $1.1 billion proprietary hedge fund of funds portfolio for J.P. Morgan’s investment banking division, effective July 1, 2009. J.P. Morgan’s investment bank has agreed to seed several new Arden funds and invest in one of Arden’s current flagship funds with these assets.
As part of the agreement, a team led by Shakil Riaz, Chief Investment Officer of J.P. Morgan’s proprietary hedge fund of funds program since inception in 1995, will join Arden. Mr. Riaz will become a member of the Arden Investment Committee and continue his investment leadership role for new funds seeded by the J.P. Morgan assets. The existing Arden funds and customized accounts will continue to be managed by Arden senior investment professionals and Investment Committee members: Averell H. Mortimer, Chairman; Henry P. Davis, Managing Director and Head of US Manager Research; Ian P. McDonald, Managing Director and Head of European and Asian Manager Research; and Matthew Bianco, Managing Director and Head of Risk Management.
“Arden’s high quality institutional infrastructure and well-established investment processes were important in our decision to select the firm to manage these assets,” said Robert Case, head of Principal Investment Management for J.P. Morgan’s investment bank. “Partnering with Arden, which has a proven track record of managing absolute return programs through many market cycles, enables us to continue participation in this attractive asset class, while better managing our overall capital commitments.”
Averell Mortimer, Arden President and Chief Executive Officer, said, “We are pleased to partner with J.P. Morgan on this unique venture, which we believe will create significant value for both Arden investors and J.P. Morgan in the years to come. Importantly, this initiative further strengthens our organization and brings additional specialization and expertise to Arden’s global investment program. We warmly welcome Shakil and his colleagues to Arden and believe investors will benefit from their market experience and long-term investment record as we develop new strategies to meet the expanding needs of our sophisticated institutional clientele.”
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Forbes – In light of the higher risks which are sweeping global markets, Finvest Asset Management is set to launch a new capital protected offering for investors who are seeking to generate annual returns of between 12-20 percent in a low risk structure.
The total offering is for $500 million and is open to non-U.S. investors only. It is anticipated, based on early interest in the product, that the product will be oversubscribed. The capital protected investment vehicle will be protected by a AAA institution which will not have any association with an investment bank or exposure to sub-prime which has been a crippling factor to global markets, and an issue of concern through the current credit crunch crisis. In an environment where cash is king, and several high profile hedge funds have experienced blow outs, this capital protected product offers investors an alternative possibility of security and the ability to earn above average risk adjusted returns.
Zawya – Lionhart (Middle East) Limited, part of the Lionhart group of companies, a firm specializing in global multi-strategy arbitrage, today announced that it has gained regulatory approval from the Dubai Financial Services Authority (DFSA) to open an office in the Dubai International finance Center (DIFC).
The Dubai office will be headed by Jim Quinn who has over 20 years experience in the asset management industry with 10 years experience in the Gulf region. The office opening and the establishment of a dedicated team is the culmination of many years of investing in the Middle East. The increasing sophistication of Gulf investors and the rapid development of economies mean that the region is set to play an increasingly important role in the world’s economy. With this new office opening, Lionhart is committing itself to the Gulf region for the long term.
Abdulla Al Awar, Managing Director of DIFC Authority said: "The funds industry in the Middle East has seen rapid growth in the past few years, spurred by the growth of the economy and the availability of a world-class financial services infrastructure. The increasing commitment shown by leading firms like Lionhart in the region will boost the market for funds generally, and for hedge funds specifically. We look forward to providing Lionhart with the services that will support their efforts to develop their business in the region."
