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.
Bloomberg – Brazilian hedge funds saw a record 14.3 billion reais ($6.7 billion) in withdrawals last month after returns trailed a fixed-income benchmark even while defying a 25 percent plunge in the Bovespa stock index.
The redemptions brought total outflows this year to 48.9 billion reais, shrinking the industry by 16 percent, according to data released by the National Association of Investment Banks yesterday. The rate of withdrawals is similar to hedge funds globally, even though the worst-performing Brazil funds lost a third as much on average as their overseas rivals.
Brazilian managers avoided declines even as the Bovespa plunged 43 percent this year. Investors withdrew money because they compare performance against fixed-income indexes, said Luiz Felipe Andrade, a director at the association known as Anbid. Bond yields in Brazil are among the highest in the world.
Bloomberg – Brazilian hedge funds saw a record 14.3 billion reais ($6.7 billion) in withdrawals last month after returns trailed a fixed-income benchmark even while defying a 25 percent plunge in the Bovespa stock index.
The redemptions brought total outflows this year to 48.9 billion reais, shrinking the industry by 16 percent, according to data released by the National Association of Investment Banks yesterday. The rate of withdrawals is similar to hedge funds globally, even though the worst-performing Brazil funds lost a third as much on average as their overseas rivals.
Brazilian managers avoided declines even as the Bovespa plunged 41 percent this year. Investors withdrew money because they compare performance against fixed-income indexes, said Luiz Felipe Andrade, a director at the association known as Anbid. Bond yields in Brazil are among the highest in the world.
Bloomberg – Energy Capital Management and Nordic Commodity Funds AB’s hedge funds are outperforming the competition in European energy markets, where power prices fell as much as 17 percent last month from a record.
Energy Capital’s MMT fund returned 19.2 percent through July, according to a letter to investors, the best result in a Bloomberg survey of 11 funds in Europe’s electricity, coal, natural-gas and emissions markets. Alfakraft AB’s Alfa Energy Fund posted the biggest drop, at 17.9 percent, according to its Web site.
The plunge in power prices and related commodities since early July ended a four-year surge in electricity costs that enabled funds to provide better returns than stocks and bonds. Coal costs, which affect European power markets, more than doubled in the first half, before sliding 13 percent in July.
Financial Times – Brian Hunter, the trader who was blamed for the collapse of $9bn hedge fund Amaranth Advisors two years ago, has taken advantage of last month’s plunge in commodity prices to help propel the year-to-date return at the fund he now advises to 230 per cent.
The Peak Ridge Capital Commodities Volatility fund, which Mr Hunter advises, returned 24 per cent in July as commodities prices fell 10 per cent for the month.
The prices were down 19 per cent from their peak on July 3rd – the biggest monthly decline since March 1980, measured by the Reuters-Jefferies CRB Index.
Slumping demand and steadily rising inventories sent the prices for contracts ranging from oil to soyabeans plunging in July, suggesting that the six-year-old commodity bubble may have burst.
BloggingStocks- With the plunge in the equities markets, there are certainly some compelling opportunities. Just look at Napster Inc., an online music operator. The company has $69.8 million in the bank and a market cap of $66.4 million. Yes, Wall Street is valuing the business at below zero.
Well, hedge funds are taking notice (this is a according to Bloomberg.com). For example, Eminence Capital LLC has increased its equity stake to a cool 9%. This is usually the first step in forcing a company to sell out.
One possibility is for Napster to go private. However, this will probably not carry much of a premium.
New York (HedgeCo.Net) – The manhunt continues for former Bayou hedge fund manager Sam Israel, who went missing just hours before his scheduled jail term of 20 years.
Israel’s 2006 GMC SUV was found abandoned on the bank of the Hudson River just north of New York City, with the words ‘Suicide is Painless’ written through the dust on the window. In recent days, however, no body has washed up on shore, as they usually do when somebody jumps from the Bear Mountain Bridge, prompting authorities to believe that this was nothing more than a staged suicide.
A police spokesman even confirmed that they are no longer searching the river because it is widely believed that he didn’t take the 175 ft plunge.
The US Marshals Service in Manhattan is considering Israel ‘armed and dangerous,’ as indicated on his ‘wanted’ poster, which describes the 48 year old, 5’11"/200lb scam artist.
Israel received the 20 year prison sentence after he was found guilty of defrauding investors of over $450 million.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
