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USA Today – Technically, a bear market is when stocks fall 20% or more from their highs. But there’s a saying that a bear’s true signature is making a fool out of everyone. Based on that, we’re all laughingstocks, because there has been virtually no way to avoid this bear market’s claws.
Following a 445-point slide to 7552 Thursday, the Dow Jones industrial average is down more than 6,600 points from its high. The broad stock market is at it lowest level in 11½ years, with the Standard & Poor’s 500 index off 52% from its high in October 2007 and on pace for its worst year ever, S&P says. Only 13 of its 500 stocks are not down for the year, and more than 100 trade for less than $10 a share.
EPFR – Moneycontrol.com – Brad Durham, Managing Director of EPFR said there could be some acceleration in outflows from hedge funds. He added that India funds saw USD 24 million of inflows and that recently, outflows from some EMs (emerging markets) have tamed.
He said there has been slowdown in the pace of outflows from long-only funds and that selling momentum in some EM funds has slowed down.
Reuters UK – Dozens of hedge funds have told investors they cannot get their money back right now as managers try to limit a wave of redemptions to safeguard all their clients’ investments — as well as their own futures.
Only a few months ago, hundreds of the world’s estimated 9,000 hedge fund managers made it tough for wealthy investors to put money into their funds by requiring high investment minimums of $1 million (617,500 pounds) or more and charging heavy fees.
Now managers are making it hard for investors to get out.
"Everyone is looking at their gate provisions (mechanisms that limit redemptions) and what rights they have to close their gates," said Timothy Mungovan, a partner who advises hedge funds at law firm Nixon Peabody LLP. "It is a phenomenon that has been occurring for some time and is picking up pace now."
Stamford Advocate – A Greenwich hedge fund company is among hundreds of the risky investment entities that have closed or are projected to close this year amid volatile equity and commodity markets.
Turnberry Capital Management told investors last week that it will liquidate its fund and close its doors after most of the clients sought to withdraw their money, Reuters reported. The fund, which invests in distressed debt, once managed about $800 million.
"We intend to take a series of steps to liquidate the Fund and redeem all Fund investors at the same pace," fund manager Jeff Dobbs wrote in a letter to clients that Reuters obtained. "After Labor Day, we will commence a sell-down of the Fund’s security holdings in order to raise cash to fund redemptions."
InvestmentNews – Emerging-market strategies gained some momentum during the quarter ended June 30, but are still struggling, according to Hedge Fund Research Group LLC of Chicago.
HFR reported today that emerging-market hedge funds took in $995 million during the second quarter, reflecting a 66% increase over the $597 million worth of inflows into the strategy during the first quarter of the year.
But the inflows into the category paled in comparison to the year-ago quarter, when emerging market hedge funds took in $3.7 billion.
If the current pace of asset flows continues through the end of the year, the emerging-markets strategy could experience its worst year for investment flows since 2000, when the category had net outflows.
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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