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.
Seeking Alpha – Sailors out there will know that boats can sail down with the wind - like a leaf being blown across the water – or into the wind at an angle, zigzagging back and forth along the way. Sailing downwind is easier and since it offers a direct path from A to B, and is therefore faster. Zigzagging directly upwind, on the other hand, requires more skill and is much slower. But who would want a boat that could only sail along with the direction of the wind? This is where sailing can offer a useful lesson for hedge fund investors.
Since the beginning of the last bull market, questions have been raised about the high correlation between hedge funds and equity markets. Arguably, this relationship gave birth to the field of hedge fund “replication” (a field that now involves a wide variety of “alternative” betas as well).
But all along, hedge funds have said that when markets rise, why shouldn’t they try to capture all this upside – and then some? The value in alternative investments comes not necessarily from their consistent absolute outperformance, but in the option-like behaviour of their returns. In other words, your “2 and 20″ buys you a market put. Long-only managers, hedgies are apt to say, simply don’t have the ability to make dramatic adjustments to net exposure in response to market gyrations.
New York (HedgeCo.Net) – Turnberry Capital Management LP has decided to close its doors and liquidate its assets, after many investors inquired about getting their money back. The hedge fund, which specializes in purchasing distressed debt, once held approximately $800 million under management.
"We intend to take a series of steps to liquidate the Fund and redeem all Fund investors at the same pace," Portfolio Manager Jeff Dobbs wrote in a letter to his clients. “After Labor Day, we will commence a sell-down of the Fund’s security holdings in order to raise cash to fund redemptions.”
Being careful not to waste any potential marketing platform, Dobbs also added that he is planning to own a corporate bond portfolio, and that anyone who has an interest in learning more may submit a request.
About 70 percent of the credit derivative book has already been liquidated.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Reuters – The commodity half of oil tycoon T. Boone Pickens’s BP Capital hedge fund lost 35 percent of its value in July, the New York Post said, citing sources.
The fund is believed to be down about 10 percent for the year, the paper said.
A Pickens spokeswoman told the paper that commodity-fund investors were informed that the steep decline in natural gas and oil prices has had an adverse impact on its performance.
"We continue to analyze the market and adjust accordingly," the spokeswoman was quoted as saying.
West Palm Beach (HedgeCo.net) - Research and Markets has announced the addition of the "The Barclay Managed Funds Report" subscription to their offering.
Published quarterly, for the last 17 years, the Barclay Managed Funds Report provides industry professionals with information on the most relevant industry trends and performance rankings for the managed futures (CTA) and hedge funds investment industries. The first published in 1991, this newsletter contains 24 hedge fund and managed futures performance ranking tables, in-depth manager profiles, and roundtable discussions on topics of current interest for hedge fund investors and professionals.
The Fund Review article is an in-depth manager profile, which explores the performance history and management approach of a fund or program. This article delves into the fund or programs’, key short-term and long-term strategic approaches, its risk management system, a comparison of its peer group, and outlook. Account information, performance analysis, correlations and past returns are also highlighted.
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!
Reuters – Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed.
Asia-focused hedge funds received a net $530 million from investors in the April-June quarter, down from $1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.
Asian hedge funds grew by approximately $200 million to $100.48 billion, up just 0.25 percent from the first quarter, as inflows were mostly offset by a decline of nearly $320 million due to poor performance.
"Asian hedge fund investors reacted to continuing market volatility by adjusting allocations opportunistically to those regional markets that had posted sharp year-to-date losses," said Kenneth Heinz, president of Hedge Fund Research.
West Palm Beach (HedgeCo.Net)- A recent Bank of America Survey of high net worth Americans indicates that US investors understand the risk and rewards of hedge fund investments. Many expressed greater satisfaction over the last 12 months with their holdings in alternatives, including hedge funds, venture capital, real estate and private equity, than their more traditional investments, including stocks and bonds.
Surveying more than 400 high net worth investors with greater than $3 million in investable assets, 267 held investments in alternatives overall, including 92 who held investments in hedge funds or hedge funds of funds. Nearly one-third (32%) of the data collected focused on the attitudes of individuals with investable assets of $10 million or more.
The findings also indicated a positive relationship between satisfaction with alternative investments and the length of time the investments were held. Investors with 10 or more years of experience in alternatives were almost twice as likely as those with fewer than 10 years of experience to be "extremely satisfied” with their total portfolio since their initial investment.
Negative stories published about hedge funds appear not to have deterred experienced hedge fund investors, according to the survey’s findings. When asked if negative publicity about hedge funds impacted their investment decisions, 44 percent of those invested in hedge fund vehicles said no and only 20 percent said yes.
"Our study demonstrates that, despite the portrayal of hedge fund investors as risk-takers investing in aggressive managers," David Bailin, president of Bank of America Alternative Investment Solutions, said, "Many high net worth investors have a realistic understanding of the risks associated with their holdings and realize that large alternatives managers are institutional in their investment approach and the quality of their investment professionals.”
eFluxMedia- Quoting an unnamed Wall Street source, the New York Post said that Apple’s hedge fund investors are very worried after Steve Jobs appearance at MacWorld 2008.
In June, Apple downplayed the rumors rumors and speculations regarding Steve Jobs’ health. The company has issued a statement saying that he was affected by “a common bug”. Apple’s spokesperson noted that he had received antibiotics as treatment and is now recovering. After his speech at WWDC, some major news sites and various blogs have commented about Job’s physical appearance. Apple’s CEO appears to have lost some weight and he looked a little pale.
But since then the company didn’t provide any other update on Jobs’ health. The New York Post noted also that other people who have met with Jobs in the weeks surrounding the introduction of the iPhone 3G on July 11, said they came away troubled by his thin appearance.
Jobs’ health is a reason of concern, because he was diagnosed with pancreatic cancer in October 2003, but Apple did not announce the illness until nine months later, in July next year. Jobs underwent a successful surgery in August 2004.
Independent- The UK’s financial watchdog has targeted hedge funds for the second time this month, demanding more disclosure for those trying to build anonymous stakes in companies using a complex derivative, in a bid to combat market failure.
The move to force disclosure of contracts for difference (CfDs), which comes just weeks after the regulator brought in disclosure rules for short positions in certain circumstances, will leave some hedge funds "fuming", according to one market expert. CfDs and shorting are tactics predominantly used by hedge fund investors.
The Financial Services Authority outlined plans yesterday for investors to disclose their positions if they have built up more than 3 per cent in a company through CfDs. Under the new rules, investors must disclose a position, whether held through shares or CfDs or a combination. Previously there had been no requirement to disclose any CfDs positions other than when the target was in a takeover process.
Financial Times- When hedge fund manager and convicted fraudster Samuel Israel III disappeared this month, leaving nothing but the message "suicide is painless" scrawled in the dust on his car, you can be sure his life assurer did not pay out – not least because police believe he was trying to fake his death.
Another type of insurance policy might soon help investors caught up in scams such as the $400m Mr Israel sucked out of Bayou Management.
At the least, the new products being created should provide hedge fund investors with peace of mind amid widespread fear of fraud in the industry.
Today, a second insurance product begins offering hedge fund investors cover for fraud losses, as Integro, a New York insurance broker, and Amber Partners, a risk rating agency for the industry, aim to capitalise on the fear of swindlers.
"While they [frauds] are not frequent within our industry, they occur enough that it causes investors to consider it seriously," said Reiko Nahum, chief executive of Amber.
Financial Times- When hedge fund manager and convicted fraudster Samuel Israel III disappeared this month, leaving nothing but the message "suicide is painless" scrawled in the dust on his car, you can be sure his life assurer did not pay out – not least because police believe he was trying to fake his death.
Another type of insurance policy might soon help investors caught up in scams such as the $400m Mr Israel sucked out of Bayou Management.
At the least, the new products being created should provide hedge fund investors with peace of mind amid widespread fear of fraud in the industry.
Today, a second insurance product begins offering hedge fund investors cover for fraud losses, as Integro, a New York insurance broker, and Amber Partners, a risk rating agency for the industry, aim to capitalize on the fear of swindlers.
West Palm Beach (HedgeCo.net)- Security Global Investors (SGI) announced a strategic initiative to intensify its capital raising efforts for alternative global equity product offerings. The performance, transparency of the process and a 13-person investment team has garnered attention from hedge fund investors.
The company’s accelerated effort coincides with the hiring of industry veteran Sanjay Yodh to focus on the firm’s global alternative products. Yodh has more than a decade of institutional sales experience with J.P. Morgan and Deutsche Asset Management.
"Our experience and focus on risk management makes SGI’s alternative products especially attractive for institutional investors in today’s volatile markets,” noted Yodh.
Team leader John Boich, with more than 17 years experience in successfully managing global equity portfolios said,“We’ve always had a skilled team, a well-defined process, and competitive risk-adjusted performance track record.”
SGI has been managing institutional assets since 1962 and currently has approximately $9 billion in assets under management. The global equity team manages a Global Long Only (GLO), A Global Long / Short Long-Biased (GLS), and is launching a new Global Market Neutral strategy (GMN) this year.
