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.
Citywire.co.uk – Fund selector Christian Lundström, from Independent Investment Group in Sweden, is welcoming the evolution of the Ucits III space which is seeing more and more hedge fund groups entering the area.
Last week, HSBC Asset Management’s Farley Thomas warned on the trend of hedge fund groups launching Ucits-compliant funds, saying ‘Ucits is about trust, so retail fund firms in Europe should be protective of Ucits. Will the hedge fund firms be there to hold retail investors’ hands when things go wrong?’
While there may be fears for retail investors accessing such funds, many selectors are greeting the changes with open arms. Lundström is excited by the opportunity to access strategies which can ‘generate portfolio returns with low or even negative correlation to equities and commodities.’
Winton Capital Management Ltd., the U.K. hedge fund with $12 billion in assets, will start a new fund in Japan and hire staff in Hong Kong as it expands when rivals such as Citadel Investment Group LLC retreat from Asia.
The London-based firm is going to advise a new fund sold to Japanese retail investors through Mitsubishi UFJ Securities Co. that will track the performance of its flagship commodity trading adviser fund as it seeks a slice of the nation’s $15 trillion in personal savings.
CNN Money – AQR Capital Management LLC, among the world’s largest hedge fund managers, will introduce another hedge fund-style mutual fund next month, as it expands its reach beyond the biggest investors.
Greenwich, Connecticut-based AQR, a $20 billion firm led by former Goldman Sachs Group Inc star Cliff Asness, led a new wave of hedge funds marketing to the masses when it launched the AQR Diversified Arbitrage Fund in January.
"We, in about two weeks, expect to introduce a whole new series of style exposures for retail investors," AQR co-founder David Kabiller told Reuters in a rare interview.
Barron’s is out with its annual hedge fund 100 list and we wanted to post up all the media relating to it. Barron’s mentions that hedge fund assets plummeted from $1.9 trillion to $1.4 trillion throughout the course of 2008. That is a staggering number, but it definitely highlights the real problems the industry had during the year. While redemptions were fierce over the last year, reports are out saying that nearly 80% of redemption activity was high net worth and retail investors, rather than institutions. This will definitely be interesting as it could affect the health of the industry moving forwards. If institutions suddenly drop their allocations to hedge funds, then there will be big ramifications across the industry.
Reuters – Fund manager Gartmore is preparing a major push into the UK retail hedge fund market after picking up strong demand for its first products in the sector, a senior executive said.
The plan comes after a rough year for hedge funds worldwide, and following steep outflows from Gartmore’s own institutional funds, but advisory Board member Phil Wagstaff is convinced demand from retail investors is on the rise.
"The hedge fund world and the UK retail world will collide – we see this as a core area for us going forward and we see this as a growth area for the industry," Wagstaff, who is also head of global distribution at the firm, told Reuters.
West Palm Beach (HedgeCo.net) – Deutsche Bank’s foreign exchange (FX) trading platform, dbFX.com, reported a surge in customer numbers in 2008 as FX grew as an asset class of choice for investors amid the financial crisis.
The trading platform saw customer numbers increase by over 250%, as investors looked to FX as an alternative, and uncorrelated, asset class to equities and bonds. Volumes also notably increased from 2007, as investors took advantage of significant volatility in the market.
From a currency perspective, the EUR/USD was the most popular currency pair on the platform accounting for 41% of all trades, versus 20% of volume the previous year.
"Retail FX’s popularity as an asset class truly soared in 2008 from a customer and trading perspective," Betsy Waters, Global Director of dbFX.com, commented, "Looking ahead, we’re very bullish about the long term prospects for retail FX. As active traders become disenchanted with the equity markets they will turn to the FX markets for trading opportunities. In many countries, retail traders can only buy and hold equities, while FX markets offer the ability to buy and sell currencies based on your market views."
"Ultimately, FX is proven to be uncorrelated to bond and equity markets so it’s no surprise that retail investors are looking to FX, which is a proven asset class with institutional investors as a means of generating returns.” Waters concluded.
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Sydney Morning Herald – The Westpac-controlled BT Investment Management delivered grim season’s greetings to retail investors when it froze withdrawals from a $1.2 billion fund days before Christmas.
The funds manager suspended all redemptions from its Global Return Fund, which has invested in international hedge funds since 2001 and into which investors have each poured a minimum $50,000.
"BT Investment Management has decided to suspend redemptions from the fund … as we believe, because of unstable market conditions, assets cannot be realised at prices that would be obtained in a stable market," Dirk Morris, the chief executive of BT Investment Management, wrote to investors. "At this point, we are unable to ascertain when the suspension will be lifted."
