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Bloomberg - The global hedge-fund industry lost $64 billion of assets in November, with an index tracking its performance declining for a sixth month as economies in Asia and Europe joined the U.S. in recession, Eurekahedge Pte said.
“It’s very clear that there is going to be significant consolidation in the hedge-fund industry,” said Duncan Smith, a partner in Hong Kong at Ogier, a firm that provides corporate and legal services to financial companies. “Conditions are quite difficult and that really goes without saying. Underlying liquidity is very hard for funds.”
Market declines contributed to $18 billion in net losses, while investor redemptions made up $46 billion, Singapore-based Eurekahedge said, based on preliminary figures taken from 41 percent of the funds it surveys. It said hedge-fund assets shrank by $110 billion to $1.65 trillion in October.
Bloomberg - The global hedge-fund industry lost $64 billion of assets in November, with an index tracking its performance declining for a sixth month as economies in Asia and Europe joined the U.S. in recession, Eurekahedge Pte said.
“It’s very clear that there is going to be significant consolidation in the hedge-fund industry,” said Duncan Smith, a partner in Hong Kong at Ogier, a firm that provides corporate and legal services to financial companies. “Conditions are quite difficult and that really goes without saying. Underlying liquidity is very hard for funds.”
Market declines contributed to $18 billion in net losses, while investor redemptions made up $46 billion, Singapore-based Eurekahedge said, based on preliminary figures taken from 41 percent of the funds it surveys. It said hedge-fund assets shrank by $110 billion to $1.65 trillion in October.
CNN Money - In another sign the financial crisis is hitting Asia’s once booming hedge-fund industry, Alexis Fosler, the head of Citigroup Inc.’s ( C) prime brokerage team in Singapore has left the company, two people familiar with the situation said Tuesday.
Fosler was leading a three-person team that was set up more than a year ago to serve hedge funds clients in the island. She had previously worked in the offshore banking industry based in the British Virgin Islands.
One person said Citigroup remains committed to the Singapore prime broking business despite Fosler’s departure.
Bloomberg - The global hedge fund industry lost $100 billion of assets in October, according to an estimate from Eurekahedge Pte, as firms including Sparx Group Co. and Man Group Plc were hammered by investor redemptions.
Funds fell an average 3.3 percent, based on preliminary figures from the Singapore-based data provider, as measured by the Eurekahedge Hedge Fund Index, which tracks the performance of more than 2,000 funds that invest globally. That compares with a 19 percent slide in the MSCI World Index last month.
The biggest market losses since the Great Depression and investor withdrawals hurt the $1.7 trillion hedge funds industry that manages largely unregulated pools of capital. The index of global funds has lost 11 percent this year, set for the worst performance since 2000 when Eurekahedge began tracking the data.
Times of India - Can the wealthy trust their wealth managers any more after losing 30 to 60% of their wealth during the current global financial crisis?
The world’s top banks including brands like Morgan Stanley, UBS, Barclays and Standard Chartered operating in Asia are desperately struggling to find a suitable answer to this question.
It is interesting to see the usually suave and self-confident community of private bankers looking dazed and fearful of survival. There is already a run on deposits with some of Asia’s wealthy pulling out money from accounts of private banks. The future looks dismal. Some of the world’s top banks have either gone bust or merged with others to stave off closure.
"Professional advisers have failed to prove their worth," Peter Flavel, senior managing director of The Standard Chartered Private Bank told a conference of wealth managers in Singapore on Friday. "The players have changed in a way that was unimaginable a few months back. They will continue to change," he said.
Reuters - Asian stocks plummeted, led by an 11 percent drop on Japan’s Nikkei, and oil prices dropped to a one-year low on Thursday as fears grew of a more protracted and sharp global slowdown than initially expected.
Major European stock markets were expected to open down as much as 5.9 percent, according to financial bookmakers, as investors anticipated poor corporate results in such an uncertain economic environment, while the dollar gained in a flight from risk.
Optimism about the stabilisation in money markets has been swept aside and widespread selling of global equities has resumed in earnest as the quarterly results season gets underway and reports trickle in about sharp losses at hedge funds.
"I think today there is just a combination of uncertainty and deleveraging in the market," said Amar Gill, head of thematic research at CLSA in Singapore.
Bloomberg - The Artradis AB2 fund, run by Singapore’s biggest hedge-fund firm, gained 4.96 percent in September, when Asian equities had their worst month in 18 years, two people with knowledge of its performance said.
The $2.2 billion hedge fund, managed by the firm’s co- founders Stephen Diggle and Richard Magides, returned 20.64 percent in the first nine months of the year, the people said, asking not to be identified because details are private. Asia’s hedge-fund average returns fell 16.2 percent this year, the region’s worst annual performance, according to Singapore-based data provider Eurekahedge.
Hedge funds such as those run by Artradis Fund Management Pte, which manages more than $4 billion, tend to outperform when markets are falling because they trade on volatility, which increases when prices decline. The 30-day volatility of the MSCI Asia-Pacific Index, a gauge of the average fluctuation of 990 stocks, has almost tripled to 55 percent, from 21 percent at the end of August.
KEZI - Most Asian stock markets recovered Monday after last week’s historic sell-off as governments around the world intensified efforts to boost the ailing financial system.
Hong Kong’s Hang Seng Index, which tumbled more than 7 percent Friday, opened over 2 percent but shed its gains to trade about 360.50 points higher, or 2.44 percent, at 15,157.37.
In Australia, the S&P/ASX200 index was up 4 percent in response to a government plan to guarantee bank and other lender deposits for three years. The benchmark plunged over 8 percent on Friday, its biggest single-day fall ever.
South Korea’s benchmark gained more than 2 percent and Singapore’s key stock measure was up about 1 percent. But China’s key Shanghai index traded 2 percent lower, while Taiwan’s benchmark lost more than 3 percent.
Bloomberg - Asia hedge-fund closures jumped 19 percent this year, with the industry set to shrink for the first time as clients withdraw more money after funds in the region underperformed rivals in the U.S. and Europe.
“It is likely that we’ll see a net reduction in the number of Asian hedge funds through this current year,” Peter Douglas, principal of Singapore-based hedge fund consulting firm GFIA Pte, said in an interview yesterday. “Almost without exception, the managers that we talk to in Asia are seeing capital outflows, some of it is minor, some of it major.”
About 70 hedge funds in Asia have shut down as of August, an increase from 59 in the first eight months of last year, according to Eurekahedge. There are 618 Asia-focused managers managing 1,199 hedge funds, compared with 1,196 funds in December. Assets under management fell to $168 billion in August, from $176 billion at the end of 2007, according to the Singapore-based hedge fund research and publishing company.
Asia’s hedge-fund managers — more than half of whom trade only equities — have underperformed their U.S. and European counterparts whose more diverse strategies allowed them to profit from turmoil in financial markets. Asia’s hedge-fund average returns fell 12.6 percent this year, compared with declines of 0.1 percent in North America and 5.8 percent in Europe, Eurekahedge said. Asia gained 18 percent in 2007, outperforming both regions.
Reuters Singapore - U.S. investment bank Morgan Stanley is weighing whether it should remain independent or merge with a bank, given the recent turbulence in the company’s share price, broadcaster CNBC reported on Wednesday.
Morgan Stanley officials were not in merger talks as of late Tuesday, CNBC said, citing unnamed people close to the matter.
"But senior people at Morgan concede that further zig-zags in the company’s stock price could and possibly will force the company to change course and seek a merger partner, probably a well capitalized bank," CNBC reported on its Website.
Morgan Stanley shares closed down 10.8 percent at $28.70 on Tuesday, having fallen 46 percent so far this year.
Morgan Stanley officials in Hong Kong declined to comment on the report.
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 Singapore - Investors almost halved the money they put into Asia-focused hedge funds in the second quarter compared to the first three months of the year as a selloff in stocks hurt appetite for risky assets, data showed.
Asia-focused hedge funds received a net $530 million (268 million pounds) from investors in the April-June quarter, down from $1 billion in the first quarter, Chicago-based Hedge Fund Research said in a statement released late on Thursday.
Asian hedge funds grew by approximately $200 million to $100.48 billion, up just 0.25 percent from the first quarter, as inflows were mostly offset by a decline of nearly $320 million due to poor performance.