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.
Reuters UK – Thames River Capital is hoping to launch two investment grade credit strategies later this year and is looking at how best to target the U.S. institutional market, chief executive Charlie Porter told Reuters.
The independent fund house, which manages $11.5 billion (6.9 billion pounds) in traditional long-only and hedge-fund-style products, has been adding to its investment team to support new products, and hopes to scoop up rivals weighed down by the financial crisis.
"Whenever you have periods of turmoil and tumult, interesting opportunities are thrown up," Porter said in an interview.
New York Times – Despite the industry’s record losses in 2008, hedge funds generally aren’t lowering their fees without concessions from investors, such as longer lock-up periods and commitments of at least $100 million, money managers and consultants tell Bloomberg News.
While Larry Powell, deputy investment chief for the $16 billion Utah Retirement Systems, could crow at a June industry dinner in New York that more than half of Utah’s 40 hedge-fund managers agreed to changes in their fees, with four adopting his recommendations, top-performing managers haven’t adjusted yesteryear’s top-dollar fees, Bloomberg says.
West Palm Beach (HedgeCo.net) – Companiesandmarkets.com has released a report presenting views on the market for hedge fund investment based on a survey of 100 leading asset managers across Europe.
The report, which covers mass market, high net worth and institutional customer groups, forms part of a series looking at the market for alternative investments in Europe. Looking at the onshore hedge fund market in France, Germany, Italy, Spain and the UK, the report provides forecasts to 2012, analysing legislative developments and their implications for growth in the European hedge fund market. The report also identifies the primary client segments and appropriate marketing and distribution strategies for individual countries.
There will be strong growth in funds of hedge funds over the next year, the report states, with less demand for single hedge funds according to 65% of asset managers in Europe. Asset managers in Spain and Italy believe most strongly that the demand for funds of hedge funds will outstrip that for single hedge funds, followed by France, Germany and finally the UK.
Across the five core economies in Western Europe – France, Germany, Italy, Spain and the UK – institutional investors now dominate the market for hedge funds. On average, slightly more than two-thirds of asset managers confirmed that this group represents their biggest customer segment for hedge funds today. In Italy, mass market investors may also be put off by the price of hedge fund investment, according to 40% of asset managers there. In Spain, on the other hand, demand from mass market clients is being limited by competition from capital-protected and structured products and inadequate promotion of hedge fund products by banks and advisors.
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Reuters Dubai – The outlook for investments in the oil and gas industry remains healthy as demand growth from emerging economies is expected to recover, a co-manager of a shariah compliant oil and gas hedge fund said.
"There is constant demand for these finite resources from emerging economies like China and India, even though there is some downturn in the short term," said Russell J. Lucas of U.S.-based Lucas Capital Management, co-portfolio manager of Al Safi’s Lucas Energy Fund.
"You have to eat, you have to drive, you need heat to keep your family warm, I believe those are the things that should be the core of a portfolio, especially in uncertain times."
The Dubai oil and gas hedge fund could grow to $500 million (332.7 million pounds), from its initial investment of $50 million in the next 18 months, he said.
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.
New York (HedgeCo.Net) – One month after RAB was forced to revamp their flagship fund, the British hedge fund is halting redemptions on their Energy Fund. After losing more than 50% of its value this year, RAB has informed investors that they will not be able to make withdraws in the near future.
Investors who wish to stay in the fund will be offered the same deal as those locked up in the $1.4 billion Special Situations Fund. The deal entails paying smaller management fees in exchange for keeping their money in the fund for the next three years.
Investors have until this Friday to let RAB know whether or not they want to accept the offer. The alternative would be receiving “redemption shares,” which are basically an IOU promised by RAB to pay back the investors when they start posting profits.
The Special Situations Fund, one of the largest shareholders of Northern Rock, got burned with the British Government nationalized the faltering bank. Losing almost $55 million in the first half of the year, former RAB head Phillip Richards wrote it off as “very regrettable” while outlining some new strategies for the company that involved investing in under-developed regions throughout India and the Middle East. Richards stepped down shortly after as CEO to concentrate exclusively on the Special Situations Fund.
The RAB Energy Fund is run by Gavin Wilson and Mark Redway and once managed over $1.5 billion at its peak.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
CNBC – The Wall Street fallout is having aftershocks throughout the economy, but believe it or not, the entertainment industry is having no problem securing bank-financed credit.
Sure, it’s not boom time, but the fact that media companies are able to attract financing is impressive, and a testament to the fact that movie going is generally counter-cyclical.
On Friday the government was frantically putting together a bailout plan for the financial markets, while production houses attracted more investment. Last week Steven Spielberg secured $700 million in credit through JP Morgan to back his new production company in partnership with India’s Reliance Big Entertainment, from which he’s getting $500 million in equity.
Business Day – Private equity firm Actis says equity funds have embraced investing in Africa because many governments have instituted market reforms which are creating opportunities for brave investors willing to take a long-term view on Africa.
“There is increased private equity interest in the continent, illustrated by numerous new (private equity) funds being raised for Africa," Peter Schmid, head of Actis Africa, said yesterday.
His firm recently led a consortium to acquire Alstom South Africa, a big electrical engineering, manufacturing, distribution and contracting business, for R5,16 bn.
Analysts say the lure of emerging markets in countries such as Russia, China and India, and now Africa, has grown stronger after the bruising credit crunch in the US and Europe.
Reuters Singapore – U.S.-based Russell Investments, which manages over $211 billion (110 billion pounds) in assets, wants to boost its exposure to Asian real estate as it sees growing markets in China and India withstanding a global downturn.
The company, which raises money from institutions such as pension funds and invests it with other fund managers, said it expects to more than double its investments in Asia properties over the next three years, from about $300 million currently.
"Our clients tell us they want to be in Asia property, and we go where our clients want to go," said Martin Lamb, newly appointed Asia Pacific head of property for Russell, the funds and indices unit of Northwestern Mutual Life Insurance.
Reuters India- U.S. firm Morningstar Inc will expand its investment research coverage to Indian funds by early next year and hopes to hire 10-20 staff by March, a senior executive said on Monday.
Morningstar, founded by its Chairman and Chief Executive Joe Mansueto in his Chicago apartment in 1984, has made a name for itself by rating mutual funds, hedge funds and stocks and is popular for its star system of rating fund performance.
"India represents a very important investment area worldwide. So we need to be here not only to serve the Indian market but for the global investment community," Jaideep Vivekanand, director of business development for India at Morningstar Asia Ltd, said.
Reuters India- CQS has hired former Barclays Capital managing director David Kilgore as its head of trading in Hong Kong, part of a broader push by the $9.6 billion (4.9 billion pound) UK hedge fund manager to expand its presence in high-growth Asia.
CQS, a specialist in convertible bond arbitrage, is looking at further expanding its 20-person Hong Kong office and the launch of additional Asia-focused hedge funds is possible, CQS director Brian Pohli said on Tuesday.
"There are a number of different businesses we can bolt on here. But it depends on the skill set of the folks available and the complementary nature of the fit into our existing platform," he told Reuters in an interview at the firm’s Hong Kong office.
HONG KONG (Reuters)- As risk appetite for equities and property wanes, investors are willing to endure negative real returns for bonds from China, Singapore and Hong Kong because their economies are seen better equipped to tackle inflation.
Conventionally, bond yields have to be sufficient to compensate investors for their holdings as inflation erodes value over time, but those seeking safe haven destinations are choosing to brave lower returns in some markets.
Bond investors are proving less patient with India, Thailand and the Philippines, markets where yields will continue to rise on worries about fiscal imbalances and authorities’ limited effectiveness in overcoming inflation.
