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 – Early-stage investors in hedge funds should not be too greedy when negotiating with start-ups or it may hit their own investment, warns Man Investments, which this week agreed a short-term deal with an Asian start-up fund.
Net outflows of $300 billion between October and June, and the closure of the seeding operations of some banks, specialist funds and large hedge funds, have tipped the balance in favor of investors willing to back small funds.
Some seed investors now say conditions are fantastic for their strategy, allowing them good access to the best funds, often on favorable terms or by committing less capital.
Reuters – A wave of hedge funds are being launched this year by traders as the financial crisis fuels a shakeout of talent from Wall Street banks and big investment firms, an industry executive said.
Record redemptions last year prompted hundreds of hedge funds to shut down, and swooning markets have made it difficult to raise new capital. Still, one leading financial services technology firm said a growing number of managers are braving the tough environment to strike out on their own.
"There’s a huge resurgence of new start-ups," said Jayesh Punater, chief executive of Gravitas Technology, whose company builds and manages technology systems for investment firms.
Boston Globe – Despite the gloom gripping the markets, Bain Capital has raised $475 million for a new venture capital fund, according to two executives with direct knowledge of the fund.
It is the firm’s fourth fund that invests in start-ups. Bain is perhaps best known for its multibillion-dollar private equity deals. The Boston firm manages about $70 billion total, including a hedge fund and a debt fund that it runs.
West Palm Beach (HedgeCo.net) – Hedge funds returned a healthy 1% in January, wrapping up a tumultuous 2008 at -12.3%, according to Eurekahedge. Hedge fund assets fell $380 billion or 20% in 2008, from just under $1.9 trillion to just over $1.5 trillion.
Eurekahedge’s forecast expects to see more hedge fund start-ups in the near future, given the increasing number of people moving out of investment banks (whether voluntarily or otherwise) to venture into the hedge fund space.
In terms of returns, hedge funds are in a better position to generate superior returns than most other conventional managers and market players, owing to the flexibility that hedge fund managers enjoy, the Eurekahedge report says, their ability to identify new trends and investment ideas and act on them promptly.
"We anticipate trend-following strategies to continue benefiting from market movements across the currency and commodity markets, as they had through most of 2008. We expect the equity markets to remain volatile and range-bound over the next few months, but long/short managers could potentially benefit from pockets of opportunities (even if short-term ones) on both the long and the short side, given the uncertainty around the 4Q08 earnings reports and deeply discounted valuations across most sectors."
