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Bloomberg – Some hedge fund managers provided inaccurate information to investors in newsletters and monthly fact sheets, Hong Kong’s Securities and Futures Commission said.
In one instance, the hedge fund manager excluded the fund’s largest stock holding from its top five investments because of “oversight,” the regulator said in a statement issued late yesterday to all licensed hedge fund companies in the city. In other cases, the managers misstated the funds’ debt ratios and net asset values “to a limited extent.”
The findings were results of a recent SFC inspection of eight small locally established hedge fund managers overseeing $5 million to $800 million and employing three to 30 people. The regulator didn’t identify the managers involved. Ernest Kong, a SFC spokesman, declined to provide further comments.
Regulators worldwide have been increasing oversight over the $1.7 trillion hedge fund industry amid a crisis that has laden the world’s largest banks and securities firms with more than $670 billion of losses and led to the failure of Lehman Brothers Holdings Inc. Hedge funds are bracing for the industry’s worst year in almost 20 years and trying to stem investor withdrawals.
Reuters – Union Bancaire Privee has cut its exposure to hedge funds and industry performance has disappointed, while other assets look more attractively-priced, a top executive said.
Christophe Bernard, the Swiss-based firm’s head of asset management, also told the Reuters Wealth Management Summit that the industry, estimated at $2.6 trillion, could shrink by one-third over the coming quarters as investors withdraw assets.
"The extent of what’s happening this year is unseen in the industry," he said, adding the industry’s problems are more drawn out than during 1998′s demise of Long Term Capital Management and Russian crisis or losses it sustained in 2001 and 2002.
"Hedge funds are meant to produce absolute returns. If we say nothing happens (by the end of the year) it will be down 10-11 percent. The basic function of hedge funds will have failed."
Economic Times Mumbai – The concomitant impact of huge selling in European markets such as FTSE, CAC and DAX, falling more than 3 per cent, has seen a dip back home in realty, bank, IT and capital goods stocks.
Sectors like power, metal, pharma, auto and oil & gas saw a huge selling pressure and dropped more than 5 per cent, with an exception of realty, which was down more than 10 per cent.
Reports are doing rounds that US-based hedge funds are going for redemption within a span of 90 days and this announcement has pulled the market to a large extent.
Reuters- Hedge feeder fund BH Global said on Friday it has raised $1 billion (500 million pounds) from a placing with investors, double its initial target of $500 million, which will make it one of the UK’s biggest listed funds.
The fundraising highlights the demand that exists for certain hedge strategies, despite the poor returns from many funds in the industry this year, and trumps that by fund of hedge funds Dexion Absolute which in December raised an above-target $950 million.
"We are pleasantly surprised by the extent of the response," BH Global chairman Lord Turnbull told Reuters.
