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Reuters – Fund managers need to stress-test worst-case scenarios more rigorously before investing in hedge funds, industry participants at a hedge fund conference said on Thursday.
Many existing stress tests, used to gauge how funds will perform in extreme market conditions, failed to identify potential problems during the financial crisis, leaving investors exposed to steep losses.
"Many allocators used models that failed to take into consideration certain risk factors, simply because they had never been seen as risks before," Mark Schindler, portfolio manager of alternative assets at Clariden Leu, told Reuters on the sidelines of the GAIM annual industry conference.
Nasdaq.com – Jeffrey Gendell of Tontine Partners LP, who is closing two of his hedge funds after steep losses, has raised money for his new Tontine Total Return Fund, according to regulatory filings.
The Tontine Total Return fund, which Gendell said would be launched in February, has received $11 million from investors, according to a May 21 filing with the Securities and Exchange Commission. A separate filing shows the overseas version of the fund has raised $1.6 million. A Tontine spokesman declined to comment.
Gendell last year began to shut down his Tontine Capital Partners LP Fund and flagship Tontine Partners Fund, after heavy losses. That was after his flagship fund had averaged annual returns of about 39% from 1997 to 2007.
Montgomery Advertiser – State officials are seeking $36.2 million in damages from OppenheimerFunds Inc., which managed a fund responsible for steep losses in the Oregon College Savings Plan.
Officials said in a statement Monday that risky, "hedge-fund like" investments cost the Oppenheimer Core Bond Fund 36 percent of its value last year — and 10 percent more so far this year.Meanwhile, comparable funds in a benchmark index posted a gain of about 5 percent for 2008, they said.
New York Times Blogs – Officials in Oregon are seeking $36.2 million in damages from OppenheimerFunds, which managed an account responsible for steep losses in the state’s college savings plan.
Officials said in a statement on Monday that risky “hedge-fund like” investments cost the Oppenheimer Core Bond Fund 36 percent of its value last year and 10 percent more so far this year.
Comparable funds in a benchmark index posted a gain of about 5 percent for 2008, they said.
