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.
Reuters – An increasing number of sovereign wealth funds are working in concert to make joint strategic investments in order to reduce risks and maximize returns, which could provide a stabilizing force in financial markets.
State-owned funds from China, Singapore, Malaysia, Korea, Abu Dhabi and Kuwait are among those which have recently signed agreements to form investment partnerships with each other.
These partnerships will enable state-owned funds to optimize local knowledge, leverage capital, spread investment risks and maximize returns.
Financial Standard – As the GFC batters confidence in long-only equities, sentiment is turning to hedge funds, provided you partner with groups that are reputable and well run, said Spencer Young, chief executive officer of HFA Holdings.
The result is institutional investors are looking to steer money towards hedge funds as they seek a safe haven for their capital, said Young.
"While investors in traditional long-only funds have lost around 40 per cent of their invested capital in the year to date, the hedge fund industry has recorded average losses of less than half that amount – around 18 per cent – and proven its long-term value," he said.
Young said several major consultancy groups are now forecasting institutional investors to tip more money into the hedge fund sector as they re-evaluate their strategies following the global market melt-down.
Bloomberg – The Australian and New Zealand dollars rose as Australian stocks advanced on anticipation interest-rate cuts worldwide will bolster global economic growth.
The currencies advanced against the yen as Australia’s S&P/ASX 200 Index gained for the fourth day, its longest winning streak since Aug. 12. Economists forecast the Reserve Bank of Australia will reduce its benchmark rate to 5.5 percent tomorrow after house prices fell in the third quarter and manufacturing contracted at a record pace in October.
“The Aussie dollar has been following equity markets quite closely on global risk sentiment,” said Jim Vrondas, manager of corporate business at online foreign-exchange dealer OzForex Ltd. in Sydney. “If other Asian equity markets rally we might see a bit of late Asian, early European buying of the Aussie.”
Financial-Planning.com – Many alternative asset managers, who brag about their ability to make money regardless of market conditions, posted their worst figures in years last month after worldwide sentiment suddenly changed on energy prices, financial stock and the U.S. dollar.
The hedge fund with the biggest loss is SRM, the Monaco-based group that took a huge gamble on Northern Rock last year. When Northern Rock was nationalized, the group lost approximately 85% of its investors’ money, according to The Wall Street Journal.
Many hedge funds were placing huge bets that energy prices and mining stocks would continue to soar and financials would continue to fall, but when that trend reversed last month, they took a major beating.
"There was a tendency for funds that did well in June to do badly in July," Christopher Fawcett, head of Fauchier Partners, told The Times.
Times Online- Hedge funds are continuing to feel the full force of the credit crunch, with 170 funds forced into liquidation during the first quarter, a Chicago research firm reported yesterday.
The bleak figures published by Hedge Fund Research (HFR) also showed that fewer funds were launched over the three-month period than at any time since 2000.
Publication of the report came as speculation was mounting that several London hedge funds are sitting on heavy losses after being caught on the wrong side of a sharp change in sentiment about future interest rates in the past fortnight.
