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.
Bloomberg – K2 Asset Management Ltd., a listed Australian hedge-fund firm managing about $650 million in assets, is planning to start a global equities fund that seeks to profit as the worldwide stock market rally spreads to smaller companies.
The Melbourne-based firm aims to start the fund, its fourth equities-related offering, with A$5 million (A$4.5 million) to A$10 million by the end of the year, Chief Investment Officer Mark Newman said in an interview in Melbourne yesterday. The long-short fund will target annual returns of between 15 percent and 20 percent and aims to attract up to A$100 million by the end of its first year.
Cape Cod Times – Hedge funds — southwest Connecticut’s native industry — are beginning to hire again as the economy and the stock market show glimpses of recovery, according to Sandy Gross, founder and managing partner of Pinetum Partners LLC.
“It’s been picking up in the last month,” she said, adding that she expects the job market in the hedge fund industry to improve slowly next year before doing well in 2011. “I think the worst is over, but I think it’s going to lag a little longer.”
The Modesto Bee – The tantalizing climb in the stock market has made hedge fund and mutual fund managers increasingly courageous, but millions of investors with 401(k) accounts remain reluctant to trust what burned them.
That could hurt them, and the market as a whole.
Some individual investors clutched the money they had left after the market plunged more than 50 percent from October 2007 until March and stopped adding to stock funds. A recent study found about 6 percent stopped contributing to 401(k) plans altogether as they blamed workplace retirement savings plans, rather than the investments within the 401(k) plans, for losses.
Forbes – PetroAlgae, a Melbourne, Fla., company, is a renewable energy miracle–at least in the stock market. The company, which aims to harvest oil from algae, started trading on the OTC Bulletin Board in December 2008 at under $1 through a reverse merger with a public shell.
In July, PetroAlgae’s stock was trading hands for $40, valuing the company at $4 billion. Pretty strange for a company with no revenue, $27 million in losses and an unproven technology.
Reuters – Wall Street was set to open flat on Thursday, with investors eyeing retail sales and weekly jobless data for fresh insight into the state of the recession-hit economy.
* Investors will watch a 30-year treasury note auction for direction on interest rates, one day after a weak 10-year auction sent yields on the benchmark note to a eight-month high. The latest results are due at 1 p.m. EDT.
* Stock investors have been concerned that rates may dampen an economic recovery by increasing borrowing costs for consumers and businesses and are drawing money away from the stock market.
Bloomberg – Bill Schultheis, amateur mountaineer and investment adviser, says there’s more to life than staring at stock market screens.
His new book, “The New Coffehouse Investor,” says the path to success consists of the following: Get a game plan built around low-cost index funds and revisit it periodically to see if it can maintain your lifestyle in retirement.
The explosion in the number of exchange-traded index funds has created confusion among investors, Schultheis says, with Wall Street caught up in beating the market by using “thin slices” such as sector funds. Investors also need to put performance in perspective by investing in broad index funds and staying with them, the author says.
Time.com – To stop the economy’s deflationary spiral, President Obama and Treasury Secretary Tim Geithner need to get toxic assets off banks’ balance sheets so the banks can start lending again. With much fanfare and after much delay, Geithner on Monday unveiled the details of the government’s "public-private" collaborative plan to make that happen.
There was a lot at stake. When Geithner rolled out an initial version of the plan Feb. 10, the details were missing, the stock market tanked and his image went with it. To give his plan a chance this time, Geithner had to show private investors they could make money partnering with the government to buy troubled loans, and the complex securities based on them, from the banks.
Business week – The idea certainly seemed all right to throngs of Americans who were outraged by news that American International Group (AIG) paid out millions of dollars in executive bonuses after it was rescued with taxpayer cash.
But would no bailout be even worse? Financial analysts and federal officials have warned that doing nothing to save AIG—or banks or the auto industry—would be a catastrophe, an economic domino effect of bank losses, stock market chaos, and job cuts. No one—at least no one in the government—has the stomach for that.
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.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Daily Guide – Foreign investors in the Nigerian capital market withdrew some $4 billion from the Nigeria Stock Exchange and precipitated its steep decline, the Exchange’s Director General, Professor Ndidi Okereke-Onyiuke has said.
Appearing before the joint Senate Committees on Finance, Capital Market, Banking, Insurance and other financial institutions investigating the economic crisis facing the country, Mrs Okereke-Onyiuke said in 2008, foreign hedge fund managers went out and withdrew their investment of N556 billion due to the financial crisis in their countries.
Okereke, who was responding to questions posed to her by Senators as to the reasons why share prices in the stock market kept crashing despite assurances by financial managers that the fundamentals of the nation’s economy are strong, said hedge fund managers were shocked by the global financial crisis and quickly withdrew their investments from Nigeria and took it back to their countries.
Times Online – Shares in the London Stock Exchange dropped nearly 10 per cent or 50½p to a four-year low of 463½p amid fears that its trading update tomorrow will show another dramatic slump in the value of equities traded as struggling hedge funds withdraw cash.
Dame Clara Furse, the outgoing chief executive, has seen a 77 per cent fall in the share price of Europe’s biggest stock market from its £19.77 peak a year ago as it has been bedevilled by falling equity volumes and mounting competition from electronic platforms such as Chi-X and Bats. Direct Edge in the US, which has a deal with London’s Plus Markets, yesterday announced that it would convert to an exchange in the last quarter of this year.
Credit Suisse cut its target price to 495p and slashed earnings forecasts, saying the value of equities traded in London had fallen by about 30 per cent in the last three months of 2008 against a year ago and it expected these falls to continue.
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.”
