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.
City AM – Billionaire investor George Soros at the weekend became the latest high-profile financier to wade into the bonus debate as he claimed the backlash against banking fat cats on lucrative pay deals is justified.
Speaking in an interview about large profits reported in recent weeks by Wall Street’s biggest banks, Soros said: “Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts from the government, so I don’t think that those monies should be used to pay bonuses.”
Barron – President Obama took credit Wednesday for the recovery in the financial markets while at the same time decrying Wall Street’s profits and the big bonuses that will be paid out as a result.
In his prime-time news conference, Obama said that if shaming those on Wall Street who take home multi-billion-dollar bonuses doesn’t work, he vowed to make sure shareholders of those companies were made aware of the compensation being doled out.
In the absence of "remorse" of Wall Streeters for raking in big paychecks once again, the president said financial regulatory reform would be necessary to prevent banks from taking risks that he said caused the financial crisis necessitating government bailouts.
CNN Money – Money managers must offer new portfolios and keep cutting costs to survive in an era where frightened investors prefer safer fixed-income funds to stock and hedge funds, a report released Monday showed.
Badly bruised by last year’s financial crisis when tumbling markets and investor redemptions shrank global assets 18 percent to $48.6 trillion, asset managers face more tough times in 2009 and the years ahead, The Boston Consulting Group wrote in its seventh annual asset management industry survey.
Profits will shrivel again, likely falling to 30 percent or less this year from 34 percent at the end of 2008 and 38 percent at the end of 2007, the consultants forecast.
Reuters – Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank’s sale, has seen profits surge 73 percent but warned this year will be tougher.
The Children’s Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.
Reuters – Activist hedge fund firm TCI, which launched an attack on ABN AMRO in 2007 that helped trigger the Dutch bank’s sale, has seen profits surge 73 percent but warned this year will be tougher.
The Children’s Investment Fund Management (UK) LLP reported profit available for sharing among members of 555.9 million pounds for the year to end-August 2008, up from 321.0 million pounds a year before.
The firm paid 484.3 million pounds to its charity CIFF (The Children’s Investment Fund Foundation), up from 271.4 million pounds a year before.
Assan Din, a former Lehman Brothers Holdings Inc. credit trader, is setting up a hedge fund to trade corporate bonds and derivatives in Asia.
SaKa Capital’s fund, which will have a capacity of more than $500 million, will start in September with $25 million to $50 million sourced mainly from founding members and friends, Din, 38, said. The Singapore-based firm will subsequently raise capital from institutional investors, including U.S. pension funds and endowments, once it builds a track record, he added.
Times Online – Hedge funds are on course to deliver their best first-half performance in a decade, as investors renew their faith in the sector in the wake of last year’s calamitous losses.
Hedge funds worldwide returned 5.63 per cent to their investors in the year to last Thursday, according to Hedge Fund Research (HFR), the Chicago-based research firm that compiles daily statistics on performance.
Strategies that predict big directional market moves made profits of 12.52 per cent over the period as equity markets in Europe, the US and Asia-Pacific posted strong gains and liquidity gradually returned to the credit markets.
Stuff – Hedge funds meeting for their annual get-together in Monaco this week are hoping recovering profits will help placate clients, after the industry was heavily culled and suffered its worst year on record.
An exodus of investors followed a year in which hedge funds saw performance losses of 19 percent, a stark contrast to a decade in which people scrambled to get access to an industry that claimed it could make money in any market.
Significantly, one entire session of the June 16-18 GAIM conference in the Mediterranean resort is titled "The Rise of Investor Power."
Reuters – Hedge funds meeting for their annual get-together in Monaco next week are hoping recovering profits will help placate clients, after the industry was heavily culled and suffered its worst year on record.
An exodus of investors followed a year in which hedge funds saw performance losses of 19 percent, a stark contrast to a decade in which people scrambled to get access to an industry that claimed it could make money in any market.
Significantly, one entire session of the June 16-18 GAIM conference in the Mediterranean resort is titled "The Rise of Investor Power."
Stuff – The beleaguered hedge fund industry is rife with talk of consolidation, as dwindling asset bases eat into firms’ profits, with the key barriers likely to be hedge fund managers’ egos and poor rewards for sellers.
Man Group and RAB Capital have both indicated they are in the market for smaller hedge funds, while Cheyne Capital and GLG have separately announced deals in recent months.
IndexUniverse.com – The New York-based ETF provider today filed papers with the Securities & Exchange Commission for three actively managed ETFs: the WisdomTree Real Return Fund, the WisdomTree Managed Futures Fund and the WisdomTree Long-Short Fund.
The Long-Short fund will pair positions in WisdomTree’s own dividend and profits-weighted ETFs against positions in comparable cap-weighted ETFs. The filing notes that WisdomTree’s fundamentally weighted ETFs “have the potential to outperform” traditional cap-weighted indexes, and this fund aims to capitalize on that potential. The Long-Short fund will be market neutral, holding equal long and short positions, aiming to deliver consistent returns regardless of market direction.
New York Times – Two weeks from now, a seven-year-old hedge fund called Alson Capital Partners will return around $800 million to its investors, and shut its doors for good.
The fund was founded and managed by Neil Barsky, 51, a former Wall Street Journal reporter-turned-Morgan Stanley analyst, who started his first hedge fund in 1998, just as the “hedge fund decade” was gaining steam. He was an old-fashioned stock picker who ran Alson Capital as a classic “long-short” stock fund, meaning that he bought companies he thought had good long-term prospects, while shorting companies he thought were likely to fall off the cliff. At its peak, Alson Capital had $3.5 billion under management, charged a 1.5 percent management fee, took 20 percent of the profits, and, when you include Mr. Barsky’s predecessor fund, produced compounded annualized returns of 12.11 percent a year. It’s fair to say he’s made a pretty penny.
