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.
Forex Pros – Global financial turmoil and recent attacks in Mumbai will likely spur foreign fund houses still looking to enter the high potential India market to hedge their risks with local partnerships rather than going it alone.
Factors such as high brand building costs and knowledge of local issues have already spurred most international players to favour joint ventures over "greenfield" operations as they seek to tap the relatively fast-growing and savings-rich economy.
The requirement that foreign fund houses put up $50 million in capital for a wholly owned operation, compared with a tenth of that or less for a joint venture, is also seen fuelling the trend as hard-hit Western money managers seek to preserve cash.
Proactive Investors UK – The top thirty gainers for the London Stock Exchange (‘LSE’) read out like a roll call for the British and Irish financial industry, after the Financial Services Authority (‘FSA’) announced late last night that it was imposing a temporary ban on short selling financial stocks. Groups with short positions over 0.25% in the 29 companies included in the ban will have to declare their positions by Tuesday.
Not surprisingly, the FTSE 100 roared to life this morning, climbed a whopping 340 points, or 7.1% to 5225 by 10:30am, the biggest single day gain in more than two decades. The surge higher was lead by financial institutions, which have been offered a temporary reprieve from the usually lucrative tactic by hedge funds to short sectors out of favour with the market. Even large spread betting firms, like CMC Markets, informed private investors this morning that it was not accepting any new short bets on financial stocks, as under normal circumstances, it would hedge those bets, but can no longer do so.
EurActiv – Hedge funds and private equity could be forced to abide by minimum capital requirement rules in future if a report adopted by an influential European Parliament committee becomes EU legislation.
The Parliament’s Committee for Economic and Monetary Affairs voted on Wednesday (10 September) in favour of a resolution recommending tougher regulation on hedge funds. The decision was almost unanimous, with just one vote against and one abstention.
The report, drafted by former Danish Prime Minister Poul Nyrup Rasmussen, was negotiated until the last minute by MEPs, with over 200 amendments brought to the original. It is widely expected to be confirmed when it is brought before the Parliament’s plenary for a final vote on 23 September.
Hedge Funds Review Magazine- In early 2007 HNWIs bet heavily on riskier asset classes. However further into the year, financial market turmoil and economic uncertainty intensified and HNWIs began to shift their investments to safer, less volatile asset classes.
Exposure to property and hedge funds was reduced in favour of safer investments, according to the “World Wealth Report” from Merrill Lynch and CapGemini.
An increasing proportion of hedge fund assets are coming from institutional investors instead of wealthy clients. This is shifting the main drivers of the industry’s growth.
“This year’s report found that the number of high net worth individuals, and the amount of wealth they control, continued to increase in 2007, with the greatest wealth being created in the emerging markets of India, China, and Brazil,” said Nick Tucker, market leader for the UK and Ireland, global wealth management arm at Merrill Lynch.
Business24-7- When oil prices were as low as $10-20 a barrel two decades ago, the UAE seriously considered borrowing from the local market to finance its swelling budget deficit. But the plan was shelved in favour of painful spending cuts.
Such reductions, however, could not be maintained for a long time because of the rising domestic development needs and a seven per cent growth in the population. As a result, the deficit in the country sharply widened.
Yet authorities still never considered borrowing or introducing income taxes for two reasons: the country’s petrodollar income was swelling and a gigantic overseas investment empire was taking shape.
Money Management- Despite tightening credit conditions, hedge funds are continuing to gain favour, with the latest Credit Suisse/Tremont Hedge Fund Index up 2 per cent in May.
The president of Credit Suisse Index Company, Oliver Schupp, said the index had been up in circumstances where hedge funds had continued to generate positive performance across strategies.
“We estimate that each of the 10 hedge fund sectors will end May with gains for the month, with long/short equity being the highest performing sector,” he said.
