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NASDAQ – The pace of new European hedge fund launches has stalled this year after the industry’s dismal 2008 performance made investors unwilling to back new ventures.
Data provider EuroHedge Monday said just 47 funds started trading in the first six months of the year, the least in a decade and less than half the number in the same period of 2008. The new funds collectively raised $2.09 billion – a figure that in "normal" times might have been raised by one fund alone.
However, EuroHedge said there are signs the second half could be more fruitful, with several high-profile funds already started or in the pipeline. Those include Theleme, a global equities strategy being set up by Patrick Degorce, a co-founder of The Children’s Investment Fund who left to strike out on his own, and Gyldmark Liquid Macro Fund, a fund started by former BlueCrest Capital portfolio managers.
Reuters – Gottex Fund Management Holdings Ltd said on Wednesday assets under management slipped 4.6 percent to $8.1 billion in the second quarter, denting its shares, but it saw some positive signs for the second half.
The fund of hedge funds provider said the fall in assets under management was mainly due to client redemptions and partly offset by positive performance.
Reuters UK – Man Group, the world’s biggest listed hedge fund firm, reported a rise in sales to private investors and said it expects to return to overall net client inflows in its second half, boosting its shares.
In a statement on Thursday, the firm said it attracted net private investor inflows in its first quarter of $1.9 billion (1.1 billion pounds) into its funds, which aim to deliver positive investment returns whether markets rise or fall. This partly offset net outflows of $3.3 billion from institutions such as pension funds.
CNBC – Hedge funds posted their best monthly performance in a decade in May, taking advantage of rallying stock markets and distressed opportunities across the board, according to the latest numbers from the Absolute Return Composite of hedge fund indices.The industry has been increasingly under the microscope by Washington and investors alike since the second half of last year. On top of registering their worst performance ever in 2008, with the average fund down 19 percent for the year, the $50 billion Madoff fraud delivered a severe blow to the already suffering industry and gave rise to a huge wave of redemptions.
But this year has been different. On average, hedge funds gained 3.1 percent over May, bumping up year-to-date gains across the $1.33 trillion industry to about 6.1 percent.
New York (HedgeCo.Net) – Hedge fund assets, which were once estimated to reach almost $3 trillion, finished the year at around $1.8 trillion, according to research conducted by London-based HedgeFund Intelligence.
The report contends the fall in assets happened almost entirely in the second half of 2008, as markets took a beating and many hedge funds were forced to close shop. In addition, hedge fund firms that manage $1 billion or more fell from 395 in mid-2008 to 311 at year’s end. Also contributing to the fall was the fact that new fund launches didn’t come close to filling the void left by failed funds. While just 55 new funds were launched last year in the United States with assets of $50 million or more, 200 hedge funds were shut down or liquidated.
Hedge funds as a whole posted their worst year to date in 2008, with the average fund losing about 19 percent, according to data compiled by Chicago-based Hedge Fund Research. The firm also reported hedge funds are already experiencing a better year, with the average fund gaining 0.39 percent in January and falling a mere 0.51 in February, though still outperforming the stock market.
HedgeFund Intelligence predicts that assets may drop another 20 percent or more in the coming months, before leveling off sometime during this year.
According to their data, Bridgewater Associates is the largest hedge fund based on assets under management, with $38.6 billion. Coming in second, JP Morgan manages $32.9 billion, while John Paulson’s Paulson & Co. slid into third place with $29 billion in assets under management.
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Boston Business Journal – Just days after winning regulatory approval for the manufacture and marketing of its cancer therapy for bladder cancer, Indevus Pharmaceuticals Inc. disclosed that a North Carolina hedge fund has acquired 8.5 percent of its common stock.
Lexington, Mass.-based Indevus made the announcements via regulatory filings late Friday and early Monday with the Securities and Exchange Commission.
On Friday, the company said the U.S. Food and Drug Administration had approved its supplemental new drug application for Valstar, a therapy that aims to treat bladder cancer through an injectable technology.
Valstar was first approved by the FDA in 2002, however design as well as manufacturing issues have prevented Indevus from marketing the drug in the United States since 2002.
Indevus said it intends to market Valstar during the second half of this year.
Bloomberg – Mohammed Syed has spent the past seven years scouting out the best hedge-fund investments for clients of his Axiom Fund Manager Ltd. Now, he’s seeking to expand the $100 million he oversees by acquiring rivals.
“I am looking for two or even three firms that can complement my business,” said Syed, 45, who founded London-based Axiom in 2002. “A year ago most people wanted huge premiums for their businesses, but now it’s a different story.”
Hedge funds are consolidating after record investment losses and customer withdrawals cut assets by 37 percent in the second half of 2008, squeezing their main source of fees. As many as 40 percent of the 9,000 hedge funds and funds of funds may disappear in the next two years, according to Karamvir Gosal, a New York- based investment banker at Jefferies Putnam Lovell. While some will return money to investors and shut their doors, mergers and acquisitions will be more prevalent than in the past.
Fort Wayne Journal Gazette – During the first six months of 2008, commodities looked to be the savior of investors who were losing money in the stock market. In the second half, particularly for those who had invested in oil, futures contracts were their undoing.
At the start of 2009, commodities have little appeal. Most analysts expect prices to remain under pressure as worldwide demand continues to wane for basic materials of all kinds.
“For commodities to do well, they need demand and they need present demand,” said Matt Zeman, head trader at LaSalle Futures in Chicago. “Until we see the physical demand picking up, we’re going to have a hard time moving forward.”
