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Wall Street Journal - With anxiety about hedge-fund woes gripping the market, funds have their own fear: their investors.
Some investors, particularly what are known as "funds of funds," are demanding their money back and may ramp up requests in the weeks ahead. That has prompted hedge-fund managers to sell securities to raise cash.
"As the hedge fund investor base broadens, hedge fund portfolio management…slips out of the hands of the portfolio managers and into the hands of the investors," wrote Andrew Redleaf, who runs Whitebox Advisors, a Minneapolis hedge fund with about $5 billion under management, in an August client letter. "It is no insult to the investors to say that this worsens performance."
Funds-of-funds select hedge funds on behalf of pension funds, wealthy individuals or other investors, and charge a layer of fees on top of the hefty fees levied by hedge funds themselves. They often ask hedge funds for the option to redeem money as often as monthly and get good terms because they can bring in big chunks of cash at once.
West Palm Beach (HedgeCo.Net)- Southridge LLC, a New York financial holding company, is launching a "not as you know" market neutral fund to add to their portfolio of funds.
The new fund, Southridge Market Neutral US LP has the capacity to grow to $1 billion, the fund will have a $500,000 investment minimum, 2/20 fees and monthly liquidity.
Ten years in the making, Southridge Market Neutral is designed and managed by Andrew G. White, CFA. "We’re quite encouraged that our new fund strongly outperformed during first half of 08, despite being a start-up in truly hostile markets. We’re even more optimistic for the future." White commented.
“We launched the fund as quantitative market neutral, but not as you know quant or market neutral," White said, "High return with low downside risk is possible if you first focus on return using objective trend-following in US large/mid cap stocks and then employ risk control including NO leverage.”
Focusing on what works and why, the strategy is objective trend-following instead of subjective mean reversion. Investing in US large/mid caps (100% long / 100% short), the fund strategy unusually uses no leverage or factor hedging. Nonetheless, risk/return profile is similar to 6:1 leveraged market neutral funds, but with a vastly smaller market footprint and black swan exposure.
Stephen Hicks, Southridge’s CEO, said, “As we leverage our twelve year track record at Southridge, we look forward to further broadening our product line for our investor base and view the Southridge Market Neutral US strategy as an integral part of that mosaic.”
West Palm Beach (HedgeCo.net)- Global fund of hedge funds (FOHF) group Financial Risk Management (’FRM’), has hired Au King-lun, MH, PhD, as Chief Executive Officer of FRM Hong Kong.
"The firm has long been known for its strength in serving institutions and for its deep expertise in hedge funds." Dr Au said, "Asian investors are increasing allocations to hedge funds because of the absolute, uncorrelated returns and flexible investment strategies they can offer. FRM is in a strong position to deliver performance and products for this important and growing investor base."
With offices in Europe, Asia, North America and Australia, the new Hong Kong office is an effort to expand business efforts in Japan and Korea.
Dr. Au will join in September from HSBC, where he has been working for the past 11 years, most recently as Head of Institutional Business in Asia Pacific.
FRM opened its Hong Kong office in May 2008, building on its significant presence in Asia, including offices in Tokyo and Sydney, opened in 2000 and 2001 respectively. As one of the largest independent fund of hedge fund groups, FRM manages over $15 billion in assets for institutions and other sophisticated investors, including approximately 300 pension funds worldwide.
Dr. Au currently serves as Chairman of the Hong Kong Securities Institute and is a previous Chairman of the HK Investment Funds Association. In July Dr. Au was awarded the Medal of Honour (MH) by the Hong Kong SAR Government for his valuable contributions to the securities and asset management industry.
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Altassets - Cleantech-focused venture capital firm RockPort Capital Partners has closed its third fund, RockPort Capital Partners III, on over $450m, the hard cap of the fund. It had an initial target of $400m and held a first closing just three weeks ago, on $400m.
The new fund will continue the focus of RockPort’s previous funds, investing in the development of technology and products in emerging cleantech companies.
The investor base consists of US university endowments, family offices, foundations and institutional investors from both the US and Europe.
Wilber James, managing general partner, RockPort, said, ‘The cleantech sector provides enormous opportunities to identify and foster initiatives that offer solutions to global energy and natural resource needs, while providing superior investment returns. We have already seen how the teams we invest in can create enormous value. Our collaborative approach together with a business-building mentality and keen domain expertise has proven invaluable to growing companies.’