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.
Seeking Alpha – With the news getting worse and worse for the hedgies (e.g. Fortress, Thomas Lee, D. E. Shaw), it’s time for a rethink on hedge funds.
For hedge fund investors: You probably went into them believing that they were uncorrelated absolute return vehicles, or pure alpha. Isn’t it funny how correlations all go to 1 in times of crisis? Maybe it’s time to return to your roots and understand the role of alternative investments in your portfolio.
For hedge fund managers: The really successful ones began fifteen or twenty years ago as small, nimble, guerilla investors. Somewhere along the way the guerillas came down from the hills, got big and became the government. Maybe it’s time to return to the hills again.
Investors thought hedge funds were the panacea when the hedgies showed positive returns in the post-Tech bubble crash. Ultimi Barbarorum writes:
Last time we had a bear market, hedge fund fortunes were made. Andor Capital, William von Meuffling, Crispin Odey, Chris Hohn, even Jim Cramer when he was trading, all made out like bandits producing 20-50% returns on the short side in 2000-2002, many after having doubled their money by being long in 1999.
Guardian.co.uk – The Tories were accused last night of being bankrolled by a City ‘wolf pack’ after it emerged that the party was receiving hundreds of thousands of pounds from hedge fund managers who have been making vast sums of money from plunging bank shares.
After the Financial Services Authority had, in effect, barred the controversial practice of short-selling bank stocks and the Treasury was forced to draw up a rescue package for Bradford and Bingley, it emerged that a small group of City financiers who have made fortunes from falling stock markets are paying at least £50,000 a year to the party.
Their donations entitle them to membership of an elite supporters club called the Leaders Group, which bestows invitations to functions attended by David Cameron, something that has prompted allegations that the Tory leader is supporting ‘cash for access’. Last night, in an attempt to quell a mounting row over the party’s finances ahead of this week’s conference, the party put details of the Leaders Group on its website.
It has also emerged the Conservatives have continued to receive money from Lord Laidlaw, a Monaco-based tax exile who has given the party more than £3m. One donation came after the fact that he had taken part in orgies with prostitutes was exposed in the tabloids.
Globe and Mail – A year ago, Dwight Anderson was being hailed as the "king of commodities," a precocious 40-year-old hedge fund manager who made a prescient – and highly profitable – bet that global food prices would spike in unprecedented fashion.
Now he is merely another in a long line of hard-luck speculators, his crown handed to him by a fickle commodities market that has proven itself capable of ruining fortunes as quickly as it created them.
In a letter to investors yesterday, Mr. Anderson announced he was shutting down the largest fund of Ospraie Management LLC, the firm he built into one of the largest commodities-themed hedge funds in the world. The Ospraie Fund, which focuses on natural gas, oil, metals and other resources, boasted assets of almost $4-billion (U.S.) at its peak last year, but so far in 2008 it is down 39 per cent – including a gut-wrenching 27-per-cent slide in August.
"I am extremely disappointed with this result and the fund’s sudden reversal in performance," Mr. Anderson wrote. "The losses were primarily caused by a substantial selloff in a number of our energy, mining and resource equity holdings during a six-week period characterized by some of the sharpest declines in these sectors in the past 10 to 20 years."
