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Commodity Online – Gold prices had an excellent run last week, led by the extensive fall in the US dollar and strong rally in the equity markets. The rise in crude oil prices also resulted in lifting bullion.
The US currency showcased the biggest decline in a month against euro last week as US data showed that the world’s largest economy contracted lesser than forecasts, which hinted that the recession is fading and gave rise to investor demand in riskier counters such as commodities and equities.
The outlook is bright – the most active benchmark contract at the Comex has pulled off a strong recovery, ending at $953.70 near the resistance at $960, a break and close of which will take prices towards new highs of $966.70/oz and $970.40/oz, state traders.
Bloomberg – Daniel Och had about 35 percent of his $20 billion of hedge-fund assets in cash during the first quarter because he suspects global stock markets will start falling again.
“The world will not just bounce back to where it was,” Och, the 48-year-old chief executive officer of New York-based Och-Ziff Capital Management Group LLC, wrote last month in a letter to investors, referring to the gain of almost 35 percent in the Standard & Poor’s 500 Index since March 9. “We continue to believe that economic recovery will be a long process.”
OZ Master, Och-Ziff’s biggest hedge fund, rose 6.3 percent this year through April after losing 15.5 percent last year. The S&P 500 fell 3.4 percent in the first four months of 2009 after dropping 38 percent in 2008.
West Palm Beach (HedgeCo.net) – In a letter to investors, Hedge Fund manager Pentwater Capital announced that due to a number of unexpected redemption notices for year-end they have suspended redemptions and withdrawals, effective immediately.
"The entire hedge fund industry is bracing for large redemptions at year-end so as not to become forced sellers in the midst of a severe market crisis," says the Pentwater letter, "In turn, this has put additional pressure on hedge fund investors to find liquidity wherever they can, because they have to fund their own potential redemptions."
"If the Fund were to meet the year-end redemption requests we have received, the Fund would be forced to sell more of its investments into one of the worst markets since the great depression."
The fund has instead opted to create two new classes that have modified liquidity, fee and expense provisions as compared with the current classes. Investors will have the choice to transfer all or part of their investment into one or both of the new classes or remain in the existing classes.
"We will allow investors that wish to invest new capital to do so in one of these new classes and until further notice allow them to retain the benefit of their existing high water mark on any new investment. Further, investors that have already submitted a redemption notice will have a one-time option to rescind that notice, reduce the size of their redemption request, and/or choose to participate in one of our new classes."
Pentwater was not immediately available for comment.
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Bloomberg - Man Group Plc, the largest publicly traded hedge-fund manager, rose in London trading after its biggest pool reported gains for a fourth consecutive week.
“It increases the probability that they will be earning performance fees on the fund,” said Gurjit Kambo, an analyst at Numis Securities, who rates the stock an “add.”
AHL Diversified Plc gained 1.9 percent in the week to Oct. 20, and is up 12 percent in the past 12 months, Man said in a statement yesterday. AHL, whose computer-trading program dictates about a third of Man’s investments, is now closer to its so-called high-water mark, the level above which the firm begins to collect performance fees.
London-based Man rose as much as 6.1 percent and was up 14.5 pence at 368.5 pence by 10:10 a.m. The stock has gained 16 percent so far this week, valuing Man at about 6.3 billion pounds ($10.3 billion).
West Palm Beach (HedgeCo.net) - California based Martin Asset Management (MAM) is replicating hedge-fund-like returns and risk factors through its ETF strategies without the heavy fees, lockups and non-transparent holdings, the boutique alternative investment firm said.
"Our approach allows investors to obtain the very same benefits as they would with a hedge fund without the limitations usually associated with hedge funds", says Francisco Martin, Senior Managing Director and Founder of Martin Asset Management.
"We use a similar investment philosophy as you would with ‘Global Tactical Asset Allocation’." Martin said, "It is an investment strategy that attempts to exploit short-term market inefficiencies by taking positions in various markets with a view to profiting from relative movements across those markets."
The approach focuses on general movements in the markets rather than on performance of individual securities within them Positions are generally taken with a relatively short-term time horizon (3 – 6 months) – hence the term Tactical Asset Allocation – and in markets across the globe – hence the term Global.
"Our philosophy is simple; we don’t charge any management fees but participate with a 10% performance fee and a High Water Mark. The transparency of a separate managed account and the elimination of all hedge fund imposed barriers make our approach much more attractive to the investor," says Martin.
MAM is expected to launch its new product by August of 2008.
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