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 – Man Group, the world’s biggest listed hedge fund firm, reported a rise in sales to private investors and said it expects to return to overall net client inflows in its second half, boosting its shares.
In a statement on Thursday, the firm said it attracted net private investor inflows in its first quarter of $1.9 billion (1.1 billion pounds) into its funds, which aim to deliver positive investment returns whether markets rise or fall. This partly offset net outflows of $3.3 billion from institutions such as pension funds.
MENAFN - U.K. hedge fund manager Man Group reported a further decline in its assets under management Thursday, but said institutional customers have significantly slowed their withdrawals and private investor sales have been strong.
The group said funds under management at the end of its fiscal first quarter were $43.3 billion, down 7.5% from $46.8 billion at the end of March.
Forbes – Man Group PLC, the world’s largest publicly traded hedge fund, said Thursday that funds under management declined in the first half despite a recent growth in private investor sales.
The group said it had $43.3 billion in funds under management on June 30, down from $44 billion at the end of May and $46.8 billion on March 31.
Private investor sales in the three months ending June 30, the company’s first quarter, were $3.4 billion, producing a net inflow of $1.9 billion. However, institutional sales amounted to just $300 million, with a net outflow of $3.3 billion.
HedgeCo.net (West Palm Beach) – A survey by RSM McGladrey, a financial services consultancy, found that hedge fund managers are surprisingly ready to work with SEC regulators to cooperate with authority, despite wide-spread wariness about over-excessive regulation from the Obama administration.
However, the Obama financial regulatory plan was a top concern with 75%, fearing that further regulation will go too far and stifle the market’s recovery.
The survey polled more than 100 hedge fund managers during the last month and focused on hedge fund industry sentiment toward the Obama administration regulation.
Fund managers are also optimistic about the industry’s prospects, according to the survey. 60% believe the current environment provides more investment opportunities than challenges. An overwhelming majority (69%) see the U.S. economy returning to positive growth by Q2 2010.
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!
West Palm Beach (HedgeCo.net) – Swiss bank UBS AG’s money manager, Luxalpha, was one of the main European hedge funds that gave money to US money manager Bernard Madoff, it is now being shut down by CSSF, Luxembourg’s financial supervisors.
The Luxalpha assets were frozen in January, in what appears to be the first court action in Europe. Another private investor in a second UBS-run feeder fund, Luxembourg Investment Fund-US Equity Plus, is also considering legal action against the Swiss bank.
People with knowledge of the situation claimed that the two Luxembourg funds were not actively marketed by the bank and were set up at the request of clients to send money to Madoff. One of the Luxalpha board members, Rene-Thierry Magon de la Villehuchet, committed suicide in December after loosing $1.4 billion in his Madoff investments.
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!
Times Online – Hedge funds are supposed to like risk and to love leverage. However, in the current markets, it has all got too much for Man Group.
The world’s biggest quoted hedge fund manager – and historically one of the most successful – shocked investors yesterday by announcing plans to unwind all the leverage in its $8.6 billion (£5.5 billion) Man Global Strategies fund. It also surprised shareholders by a sharper than expected fall in assets under management which slipped to $67.6 billion, compared with a forecast $70.3 billion.
That was enough to knock almost a third off its share price.
Many hedge funds are being forced to cut leverage by their lenders, but in Man’s case the move is voluntary. Because markets are so difficult, it has decided to pay back its lenders and put MGS’s holdings in cash.
Daily Mail – Man Group, the world’s biggest listed hedge fund manager, saw profits slide 24 per cent in the last six months as its managed funds fell and fee income dwindled.
It took $107million (£67.4million) hit on upfront commissions for one of its top funds, Man Global Strategies.
Sales to end-September, at $10.2billion, outstripped redemptions of $6billion.
New York (HedgeCo.Net) – Citadel Investment Group announced yesterday it will shut down its $1 billion fund of hedge funds portfolio and use the capital to invest in other businesses.
The Fusion fund was launched a year and a half ago, with nearly 95 percent of the capital coming entirely from Citadel. The money will be used to invest in businesses that finance new asset managers. The remaining 5 percent of capital will be returned to investors.
"We have seen strong interest in the incubation and seeding strategies that we’ve developed," Katie Spring, spokeswoman for Citadel told Bloomberg News. "We believe these will be important components of expanding investment talent over the years to come.”
This move comes after months of swirling rumors that the $18 billion firm, headed by Kenneth Griffin, may not be able to weather this year’s credit crisis. Citadel’s largest fund, the $10 billion Kensington Global Strategies, has fallen 30 percent this year stemming from losses tied to convertible bonds.
Seeding has seen a spike in popularity in recent years. It involves focusing on new and emerging funds and fund managers in hopes of someday partaking in profit sharing once the fund experiences success. Seeding is something that new hedge funds generally seek out if start-up capital isn’t readily available, to help get their fund off the ground. New hedge funds may receive anywhere from half a million dollars to several hundred million dollars.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – After a disappointing year, Citadel will launch several new hedge funds in hopes of countering the losses of their main hedge fund.
The multi-strat $10 billion Kensington Global Strategies Fund has fallen over 30 percent this year. CEO Ken Griffin attributed some of that loss to the temporary ban on short selling, saying it “created material dislocations across many of our portfolios and disrupted our ability to assume and manage risk.”
After much speculation and some bad press, Griffin warned investors last week that returns on the fund would experience “significant volatility” in the next few weeks.
The new funds will focus more on global macro, convertible arbitrage and fixed income strategies, according to the Wall Street Journal.
Griffin told investors, "The financial crisis dramatically raised the cost of borrowing and reduced the availability of credit to market participants, materially reducing the value of cash assets as compared to the value of derivative instruments.” He went onto explain how he did not foresee the financial crisis that has unfolded this past year.
While the Kensington Fund will still be available to investors, many clients are interested in allocating their assets across numerous strategies.
Citadel was founded in 1990 and manages over $20 billion in capital.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – The largest hedge fund run by Citadel Investment Group has fallen 30 percent this year stemming from losses tied to convertible bonds. The $10 billion Kensington Global Strategies Fund has been hit hard by the credit crunch, prompting CEO Kennith Griffin to warn investors that returns may be extremely volatile in the next few weeks.
Yesterday, Mr. Griffin sent a letter to investors stating that September was the “single worst month, by far, in the history of Citadel. Our performance reflected extraordinary market conditions that I did not fully anticipate, combined with regulatory changes driven more by populism than policy.”
Rumors of the lagging performance were so strong that Mr. Griffin was forced to set the record straight. He also cited the temporary ban of short selling as one of the reasons for the losses, saying it “created material dislocations across many of our portfolios and disrupted our ability to assume and manage risk.”
Yesterday, Dealbreaker.com had published some of the swirling rumors highlighting Citadel’s problems, fueling fear and speculation in the market. The website eventually took the post down after Citadel expressed their disdain. Dealbreaker wrote: “We removed the citadel post after it was brought to our attention that it was a baseless rumor, and was irresponsible to repeat.”
Dealbreaker had pointed out that the fund uses 4 to 1 leverage, down from 7 to 1 earlier this year. Although they noted that this was high, it is not uncommon for hedge funds to use this much leverage, though some choose to use none. To put it into perspective, Long Term Capital Management and its infamous collapse used 25 to 1 leverage, or for every $1 they had, they borrowed $25.
Citadel was founded in 1990 and manages over $20 billion in assets throughout locations in the United States, Asia, England and Bermuda.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
