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) – TriAlpha recently a launched property hedge fund of hedge funds, the TriAlpha Global Property Strategy Fund in June this year.
The fund seeks absolute returns by focusing on hedge fund managers that specialise in the global property sector. In its first month the fund outperformed the FTSE EPRA Global Index by an estimated 11%. Included in the portfolio are recognised names such as Credit Suisse, Thames River and New Star Property hedge funds. Minimum investment for the TriAlpha Global Property Strategy Fund is $5 million (or equivalent).
“We are already seeing a high level of interest in the TriAlpha Global Property Strategy Fund and by having the fund available through Transact we are broadening the availability of this exciting new offering,” commented Cobus Kruger, director at TriAlpha.
Trialpha’s five sub funds of the ‘TriAlpha Alternative Strategy Unit Trust’ have been also approved as restricted recognised schemes for distribution in Singapore.
"With our roots in Stonehage (our private wealth management parent company,) we have extensive experience in dealing with and providing investment solutions to private clients." Cobus Kruger, Director at TriAlpha, says, "Our hedge fund of funds products have been received well by these clients, fitting in neatly with their investment objectives and risk profiles. With increasing numbers of private banks in Singapore we believe that our hedge fund of funds products will be an appropriate solution for their clients."
The five absolute return funds offer investors a variety of risk profiles and investment strategies, the ‘TriAlpha Relative Value Fund’, which invests in market-neutral, multi-strategy event driven, multi-strategy arbitrage and option arbitrage; aims to achieve stable, absolute returns with volatility similar to the Citigroup World Government Bond Index.
The ‘TriAlpha Multi Strategy Fund’ invests across Asia, European and U.S. hedge strategies, emerging markets, macro, event driven and arbitrage; aims to offer stable, absolute returns with volatility similar to the Citigroup World Government Bond Index.
The ‘TriAlpha Growth Strategy Fund’, which invests in Asia, European and US hedge strategies as well as emerging markets and macro hedge funds with a smaller exposure to arbitrage strategies than the Multi Strategy fund; looks to achieve absolute returns with lower volatility than the MSCI World Equity Index.
The ‘TriAlpha Hedge Equity Fund’ which invests in Asia, European and US hedge strategies; offers investors absolute returns with lower volatility than the MSCI World Equity Index.
And finaly, the ‘TriAlpha Global Property Strategy Fund’ will focus on hedge fund managers that specialise in the global property sector.
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West Palm Beach (HedgeCo.net) – Privately owned asset manager, Unigestion, has appointed Konstantinos Iordanidis as Managing Director and Head of Hedge Funds. Unigestion has $11 billion invested in hedge funds, private equity funds and quantitative equity strategies.
Iordanidis is a co-founder of Z.I. Investment, LLC, a global macro hedge fund in Chicago and former Head of Asset Allocation at Julius Baer Asset Management in Zurich from 2003 to 2005. He joins from Olympia Capital Management in Paris where he has been Co-Chief Investment Officer since 2005.
Based in Geneva, his role will be to lead the development of Unigestion’s fund of hedge funds business which comprises 43 investment professionals based in Geneva, London, New York, Paris, Singapore and Guernsey.
The arrival of Iordanidis will provide the opportunity for Bernard Sabrier, Chairman of Unigestion, and Patrick Fenal, CEO, to devote more time to the overall management of the Group focusing on the strategic direction of Unigestion over the next decade. Both will continue to have a key involvement in the fund of hedge fund business, including close relationships with hedge fund managers and Unigestion’s clients.
"It is a natural move for us to reinforce our management structure as we continue to build a multi-disciplinary, multi-cultural and multi-geographic hedge fund team delivering superior quality products to our clients in a consistent and disciplined way." Patrick Fenal, CEO of Unigestion said.
"We are proud to have attracted such a talented individual to strengthen our team." Chairman of Unigestion Bernard Sabrier added, "No doubt he and the team will build on our existing expertise and continue to provide our clients with a combination of products and client service at the leading edge of the fund of hedge fund industry."
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Money Management – HSBC will soon provide local services to its global hedge fund and private equity clients as they chase “the superannuation dollar”.
HSBC plans to increase its footprint in the Australian market with the introduction of local alternative fund services.
The alternative fund services business will form part of HSBC Securities Services in Australia and will provide local fund accounting, investor servicing and financial reporting to a range of hedge funds, fund of hedge funds, absolute return managers and private equity partners.
HSBC head of fund services, Asia Pacific, Lillian Wong said the group has seen increasing demand from its global hedge fund clients for “onshore servicing in Australia as they target the superannuation dollar”.
Wong said the group aims to provide its clients with a “seamless service” for their Australian domiciled businesses.
The group’s new alternative fund services division will be led by Howard Yip and will be part of the wider HSBC global banking business led by Janie Wanless in Australia.
Reuters UK – Funds of hedge fund portfolios are battening down the hatches in the current volatile markets by building up cash or steering clear of strategies with too much exposure to market movements.
With returns in the hedge fund industry hard to come by as the credit crisis continues to hit markets, managers who hold portfolios of hedge funds have become wary of strategies that could be caught out by another sharp downturn.
"These are the toughest conditions I’ve seen in 16 years," said Ken Kinsey-Quick, fund of hedge funds manager at Thames River Capital, who expects billions of dollars more of asset sales by banks.
"We’re expecting a big leg down in all financial assets … We do think in the short-term we don’t want much beta." Beta means exposure to overall market movements.
Reuters – Funds of hedge fund portfolios are battening down the hatches in the current volatile markets by building up cash or steering clear of strategies with too much exposure to market movements.
With returns in the hedge fund industry hard to come by as the credit crisis continues to hit markets, managers who hold portfolios of hedge funds have become wary of strategies that could be caught out by another sharp downturn.
"These are the toughest conditions I’ve seen in 16 years," said Ken Kinsey-Quick, fund of hedge funds manager at Thames River Capital, who expects billions of dollars more of asset sales by banks.
Bloomberg – Rogers Investment Advisors Y.K., a Tokyo-based hedge fund adviser, has hired Yoshiaki Iizuka and Eric Chong as it expects to more than double assets by the year-end.
Iizuka, 52, joined Rogers Investment on Aug. 1 as a managing director and head of Japanese research in Tokyo, after his most recent stint as chief investment officer of Tokyo-based Traders Investment Management Co., now JPS Asset Management Co., Ed Rogers, chief executive officer of Rogers Investment, said in an interview in Tokyo. Iizuka was chief executive officer of American Express Financial Advisors Japan Inc., Rogers said.
Chong, 36, joined Wolver Hill Advisors in New York, the U.S. counterpart of Rogers Investment, in mid-July, as a risk manager, Rogers said. He was most recently a risk manager at Societe Generale Asset Management Inc. in New York, where he was responsible for risk evaluation and analysis for a $5 billion fund of hedge funds, according to Rogers. Prior to that, Chong was a vice president at Stamford, Connecticut-based K2 Advisors LLC, a $6 billion multi-strategy fund of hedge funds.
The Independant – Susan Solovay, founder of a New York-based fund of hedge funds, explains to Martin Baker why her strategy of investing only with female managers will pay off – and why Warren Buffett is in fact a woman trapped in a man’s body.
Susan Solovay is every inch the modern female executive in the revved-up engine room of New York finance. She breezes into a noisy, trendy restaurant in midtown Manhattan, and a number of things are pretty much immediately apparent: she is super-smart, pencil-slim with dark hair, deceptively youthful (she’s in her late 40s), fast-talking, full of energy, successful – and late.
Over the din, Solovay apologises profusely. The markets may be going through a dodgy period, and the US economy teetering on the edge of recession, but the founder of Pomegranate Capital, a fund of hedge funds that invests exclusively with women hedge fund managers, is still moving at top speed and cramming ever more into a working day. By the time we meet, all the little overruns have put her behind schedule, and she’s very sorry.
West Palm Beach (HedgeCo.net) – Established leader in the management of fund of hedge funds, Tremont Capital Management, has appointed Scott R. Metchick as Chief Investment Officer. Metchick brings to Tremont over 20 years of experience in the fund of hedge fund industry and a proven performance record.
"The role of the fund of hedge funds is even more important for investors in today’s market which makes Tremont’s over 20 years of experience and dedication to excellence critical factors in delivering the products and performance that our clients need and deserve," said Metchick. "I’m excited to join the firm and look forward to all that’s ahead of us."
Tremont says his demonstrated ability to manage a defined process-oriented investment philosophy while managing a global investment team complements the existing investment approach at Tremont, allowing the firm to deepen its presence in key global institutional and distribution markets.
"Investment excellence is core to our strategy of establishing a scalable, institutional standard multimanager fund of funds business," said Rupert Allan, President and Chief Executive Officer. "Scott’s appointment represents the execution of the final phase of this strategy by capping a series of senior hires which, together with our existing expertise in the investment management group, completes the leadership team at Tremont."
Metchick’s hire as CIO, replacing Cynthia Nicoll who left Tremont for personal reasons, is the most recent in a succession of senior appointments in the investment team including Andrew Kaneb, former head of Global Equities at Lighthouse Partners, and Jim Purnell, who came from the structured product group at Dresdner Bank to lead the risk management group at Tremont.
Allan has moved quickly within a challenging external environment since becoming CEO last year, adding to his role as President. "Now more than ever," said Allan, "clients want to know that they are working with an investment manager that has the experience, the infrastructure and the ability to deliver on a mandate in various market conditions with the products and solutions they need. We now have the team in place to do just that."
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Bloomberg- Mitsubishi Asset Brains Co., an investment advisory firm of the Mitsubishi financial group, plans to start a fund of hedge funds as it seeks to invest in managers that can make money in falling markets.
The company aims to start advising a fund in the next “two- to-three years” with the aim of raising “several tens of billions of yen,” Akihiro Nishi, executive director at the Tokyo-based company’s investment advisory division, said in an interview in Tokyo. The company has hired a hedge fund manager who will start in August, he said.
Mitsubishi Asset Brains aims to tap growing demand for funds of hedge funds since the credit crunch that stemmed from U.S. subprime loan problems prompted investors to seek diversified investments to secure steady returns. The money managed by funds of hedge funds has grown more than 800 percent since 2003, according to Singapore-based research firm Eurekahedge.
Times Online- They may be partly responsible for the mess the banks are in but bankers are not sticking around for the clean-up. Many top bankers have lost confidence in their institutions and are quietly heading for the exit. The smart ones, it seems, are going to hedge funds.
GLG, Europe’s largest hedge fund, recently poached Goldman Sachs partner and top trader Driss Ben-Brahim. The bank was “not amused” by Ben-Brahim’s defection, according to one source.
Karim Abdel-Motaal and Bart Turtelboom, the global co-heads of emerging markets at Morgan Stanley, were also snapped up by GLG.
Last week, Fauchier Partners, a fund of hedge funds, announced the appointment of Jamie Kermisch. Also from Morgan Stanley, he has been in investment banking for 19 years. This follows high-level recruitment by Citadel, Tudor Investment and CQS, which has already drafted in some 45 people this year.
West Palm Beach (HedgeCo.Net) New York-based Fairfield Greenwich Group ("FGG"), a $16.6 billion global hedge fund and fund of hedge funds management firm has formed a cooperative venture with Sceptre Investment Counsel Limited, one of Canada’s leading independent money management firms.
The venture sees two of the oldest, most established, and most accomplished management firms in their respective markets forming a mutually supportive relationship to provide Sceptre’s clients access to the best-of-breed alternative asset products on FGG’s global platform.
"Sceptre has many strong relationships in the Canadian investment community, and our clients have long trusted us to manage their pooled funds, mutual funds, and other investments. FGG manages some of the industry’s finest funds of hedge funds and other alternative asset products." Richard L. Knowles, Sceptre’s President and CEO said, "We believe that Sceptre’s clients will understand the great value that FGG brings to the table, and that they will have considerable interest in the outstanding hedged products to which they may now gain access through this new relationship."
"We are excited to be working with Sceptre in Canada. For more than 25 years, FGG’s expertise in manager selection, due diligence, and risk management has benefited our investors." David B. Horn, Partner and Chief Global Strategist of FGG commented, "We have great confidence that Sceptre’s extensive network of investors will appreciate the quality and diversity of FGG’s platform of products, and the institutional investment and risk management with which we support it."
Sceptre manages client assets of $9.5 billion, utilizing a broadly diversified investment approach. Originally founded as an institutional fund manager, Sceptre has broadened its expertise to include both retail and private client portfolio management. Sceptre manages segregated and pooled fund portfolios for pension and other savings plans of corporations, government sponsored funds, universities, unions, charitable foundations, endowments and reserve funds of insurance companies.
West Palm Beach (HedgeCo.net)- In a summary of hedge fund performance for the second quarter of 2008, Morningstar, Inc. marked June as a bad end to a good quarter. The Morningstar 1000 Hedge Fund Index fell 0.73% during the month, pushing down second-quarter returns to 2.07%. Year to date, the index is up only 0.31%, as hedge funds struggled through poor market conditions.
Overall, hedge funds, including funds of hedge funds, buffered the traditional stock and bond markets over the second quarter. Equity and bond markets saw losses all over the world, while the Morningstar Fund of Hedge Funds Index gained 1.43%. Over the last year, the Morningstar 1000 Hedge Fund Index and the Morningstar Fund of Hedge Funds Index outperformed the major global stock indexes, which experienced double-digit declines (with the exception of emerging markets). Both hedge funds and funds of hedge funds underperformed bond markets, however, over this same period.
“Equity markets suffered steep declines in June,” said Morningstar hedge fund analyst Nadia Van Dalen. “Volatility returned to levels not seen since March, amid fears of recession and rising inflation. Most hedge funds are not immune to these economic shocks, despite what their name might imply.”
There were significant exceptions. Over the last 12 months, the Morningstar Global Trend Hedge Fund Index, which tracks funds that profit from price trends in futures, options and currencies, benefited from the sharp rise in commodity prices, returning over 18% (3.28% in June). Funds in the Morningstar Global Non-trend Hedge Fund Index, those that take macro-economic bets on interest rates and currencies, benefited from the falling dollar and the rising Euro, earning 0.33% in June and more than 12% over the last 12 months. The last 12 months also saw high volatility. Those equity arbitrage funds that specialize in trading volatility helped drive the Morningstar Equity Arbitrage Hedge Fund Index to a gain of more than 8.57% in the last year and 1.12% in June.
Not surprisingly, these top-performing categories have also experienced the most inflows. For the period ending May 31 (asset flow reporting lags performance reporting), hedge fund investors poured more than $6 billion into global trend funds and $2.4 billion into global non-trend funds tracked by Morningstar. On the opposite end of the spectrum, investors fled the U.S. equity and Europe equity hedge funds in the Morningstar database, taking more than $7.7 billion and $6.9 billion out of these categories, respectively.
Morningstar’s hedge fund flow data also show that, through May, assets moved to the Morningstar-rated 4-, and 5-star hedge funds, and redeemed the 1-, 2-, and 3-star hedge funds. Four- and 5-star hedge funds received more than $10 billion in new assets through May, while 1- and 2-star hedge funds bled almost $10 billion in assets over the same period.
Returns of Morningstar’s Broad Category Indexes, indexes that group funds in related categories, highlight that the event-driven funds were the hardest hit. This index includes funds in the Morningstar Corporate Actions and Distressed Securities Categories, which sometimes take bets on depressed or out-of-favor companies, and look for a reversal over the longer-term. These bets may look worse before they look better, given the economic conditions.
Morningstar has approximately 8,500 hedge funds and funds of hedge funds in its database and is is a leading provider of independent investment research in North America, Europe, Australia, and Asia.
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