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.
Zawya – Hedge funds focusing exclusively on the Middle East and North Africa have seen a 10-fold increase in assets under management over the past five years, with futher gains of about 17 per cent through the first half of 2009, according to Hedge Fund Research, a provider of hedge fund industry data.
The Middle East and North Africa region, also known as MENA, is the smallest emerging market in terms of dedicated capital. It currently has more than 20 hedge funds that account for 1.52 per cent, or $1.17 billion, of the $77 billion in total assets invested in emerging markets worldwide, Hedge Fund Research, or HFR, said in a statement on Wednesday.
Business24-7 – Six months after their worst drawdown on record, regional stock markets are outperforming the Middle East and North Africa (Mena)-focused hedge funds, suggesting markets are once again warming up to equity participation.
According to Emirates Business research, Mena markets have posted gains of 9.73 per cent on average, beating the 10 region-focused hedge funds, which have posted returns of 4.4 per cent since the beginning of this year.
Even the GCC markets, battered by their exposure to relatively lower oil prices and global economic environment, have turned in a marginally better performance, at 4.42 per cent, suggesting that risk appetite among investors in the regional markets is on the upswing.
Reuters India – Hedge fund firm 47 Degrees North has launched a portfolio that will invest in funds in areas such as electricity, transportation and volatility arbitrage as it seeks fresh ways to sidestep falls in traditional markets.
The firm, which is part-owned by Iveagh, the investment office of the super-rich Guinness family, said the 47 Degrees North Innovation fund will invest in 20-to-25 funds in non-traditional areas that will also include insurance-linked securities and Middle East and North African equities.
Zawya.com – Although nearly half of all sovereign wealth funds (SWFs) are based in the Middle East and North Africa region, only 32 per cent of them invest in Mena-focussed hedge funds, new data has revealed.
Almost all of the SWFs known to be investing in hedge funds pursue a global investment strategy.
North America, as a mature and large hedge-fund market, is also a popular destination for investments in this asset class, with most of the larger SWFs, including the large Mena funds, targeting hedge funds there, a report by Preqin said.
Reuters – Amiri Capital, the Islamic asset manager backed by investment firm Olivant, said on Monday it has teamed up with broker Newedge to launch the first Islamic fund of long/short hedge funds marketed in the Middle East.
The partnership with Newedge — itself a joint venture between Calyon and Societe Generale — allows Amiri to launch the fund, which was put on hold when original partner Lehman Brothers filed for bankruptcy protection in September.
Hedge funds are a relatively new concept in Islamic finance and a bone of contention, with some scholars rejecting them as speculative and others sanctioning them as a tool for diversification.
Middle East Online – Can a Hedge-Fund Island Lose Its Shirt and Gain Its Soul?
In December, reports surfaced that Treasury Secretary Henry Paulson pushed his Wall Street bailout package by suggesting that, without it, civil unrest in the United States might grow so dangerous that martial law would have to be declared. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), warned of the same risk of riots, wherever the global economy was hurting. What really worried them wasn’t,
Al-Bawaba – Never before in its short history was the hedge funds community confronted with the challenges nor the pressures it is facing today, following a six-year boom,with Madoff’s scandal coming as the icing on the cake following the US financial crisis.
With investors already becoming more demanding with regards to fees, transparency and regulation, these and other industry standards are expected to become topics of contention within this once powerful industry globally and in the region. Investors, regulators and hedge fund managers are expected to have compelling debates on all these issues at the 10th Hedge Funds World Middle East Conference taking place this year from 10 to 12 March 2009 at Madinat Jumeirah in Dubai.
Business Intelligence Middle East – International Tax lawyers are urging private-equity and hedge-fund clients to restructure their partnerships so they can sidestep the higher taxes that president-elect Barack Obama has vowed to impose on their profits.
Obama’s promise to revive a failed 2007 bill forcing executives to pay rates of 35% or more instead of the 15% capital-gains tax has prompted lawyers to advise the firms to take measures such as setting up offshore entities. That would help circumvent higher taxes on so-called carried- interest profits that executives at the firms typically earn.
The lawyers say they are pressing their clients to act before the year’s end on the assumption that any law or regulatory change won’t apply before 2009.
“If you wait to do it, then to unwind or restructure later will be very difficult and trigger significant tax penalties,” said Mike Kosnitzky, who heads Boies Schiller & Flexner’s tax practice in New York and is advising clients.
Bloomberg – Millennium Partners LP, the $13.5 billion hedge-fund firm run by Israel Englander, plans to return $1 billion to investors who asked for their cash back by year-end, according to two people familiar with the matter.
The redemptions, equal to 7.4 percent of client assets, would have been higher except the New York-based firm limits redemptions in any quarter, said the people, who asked not to be identified because the information is private. A spokeswoman for Millennium declined to comment.
Millennium lost about 3 percent this year through October, the people said, compared with hedge funds’ average decline of 16 percent, according to data compiled by Hedge Fund Research Inc. Two percentage points of Millennium’s loss were caused by assets frozen in the September bankruptcy of Lehman Brothers Holdings Inc., one of the people said.
