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HedgeWeek – TriAlpha, the asset management arm of the Stonehage Group, an international wealth management group, has launched the TriAlpha Global Property Strategy Fund, a fund of property hedge funds.
The fund seeks absolute returns by focusing on hedge fund managers that specialise in the global property sector. The portfolio will include property hedge funds from prominent management firms such as Credit Suisse, Thames River Capital and New Star Asset Management.
‘With increasing uncertainty and volatility in the property sector, a fund of hedge funds approach to this asset class looks extremely favourable,’ says TriAlpha director Cobus Kruger. ‘The easy money has been made – given this volatility it’s now time for the skills of hedge fund managers to be employed.’
TriAlpha has a 10-year track record in managing funds of hedge funds, and through Stonehage Property Partners the group has extensive experience in property investment.
‘Using a fund of funds approach allows us to exploit opportunities across global property markets with an absolute return focus through the full property cycle,’ says Sean Curry, head of TriAlpha’s fund of hedge funds team.
Bloomberg – Man Group Plc, the world’s largest publicly traded hedge fund manager, began selling a managed futures fund with a capital guarantee to Hong Kong individuals seeking protection from falling stock markets.
Man AHL Guaranteed Futures 3 Ltd. will trade mostly futures and option contracts on currencies, bonds, stocks, interest rates, metals, energy and agricultural products using computer-driven models, according to a fund sale brochure.
Credit Suisse Group will provide a guarantee for 90 percent of the initial investment in the dollar shares of the fund. The Australian dollar shares will be 105 percent capital guaranteed.
A 22 percent decline in Hong Kong’s Hang Seng Index since its Oct. 30 peak is forcing the city’s residents to reduce stock holdings and seek capital protection of their investments.
"We’re seeing strong demand for products that allow investors to diversify away from equities,” said Giselle Lee, head of sales for Man Investments (Hong Kong) Ltd. The protection of the initial capital investment adds comfort, "especially for first-time investors in alternative products.”
Managed futures funds bet on the directions of markets for various assets by trading instruments such as futures, options and forward contracts. Man Group began selling its capital guarantee fund in Hong Kong yesterday.
Bloomberg – Merrill Lynch & Co., the third- largest U.S. securities firm, is probing one of its trading desks in London and has suspended a trader after discovering he may have overstated the value of some of the bank’s equity derivatives.
“The firm routinely reviews the marks our traders set,” Merrill spokesman Jezz Farr said May 23 in an e-mailed statement. “Our preliminary review determined that one desk used marks that appear to be outside of our accepted policy. We have suspended a trader and we continue to review this matter.”
The trader, whom Merrill declined to identify, was a member of a team that traded derivatives based on individual stocks for the firm’s own account, according to a person with direct knowledge of the matter. Merrill, based in New York, has determined that he may have overstated the value of some holdings by less than 10 million pounds ($19.8 million) during April, when his marks were detected, the person said.
Declines on European and U.S. markets this year have exposed a growing list of errant traders, tarnishing firms including Credit Suisse Group and Societe Generale SA. The discovery of potential trading lapses at Merrill may spur regulatory scrutiny as Chief Executive Officer John Thain works to reassure shareholders that the firm has improved risk management after his predecessor’s bad bets on mortgages contributed to a record loss of $7.8 billion in 2007.
“This case shows our oversight system works,” Farr said in the statement, referring to the firm’s detection of the suspended trader’s conduct. Merrill dropped $1.35, or 3 percent, to $43.15 at 2:30 p.m. in New York Stock Exchange composite trading on May 23.
