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.
New York (HedgeCo.net) – Salus Alpha issued a statement regarding the reinvention of the hedge fund sector since last year’s crisis. “UCITS Hedge Funds” are known as a new and innovative concept, but the strategy actually goes back to 2002 when the first hedge fund was implemented under UCITS I.
The UCITS directive was established in 1986 but it took 16 years for asset managers to take notice of the opportunities the directive provided, Salus Alpha states. Only few tried to structure innovative hedge fund products within the UCITS directive and only one was able to successfully launch the first UCITS I Hedge Fund and expand the product range significantly under UCITS III.
“From the beginning it was clear to us that transparency, liquidity and risk management were the most important factors to secure our success in inventing UCITS Hedge Funds. We recognized the potential of UCITS Hedge Funds in 2002 and despite the complicated regulations we were able to offer the first regulated Hedge Funds already under UCITS I in 2003.” Salus Alpha explained.
Now after the financial crisis has wreaked havoc on the market everyone wants to be part of the UCITS Hedge Fund world.
“We strongly believe in investing in alpha therefore it’s a mystery to us why the majority of the market invests in beta. It is becoming clearer that the interval between crises will get shorter since the global markets are more volatile than the markets of just one country. Therefore investing in products independent from this market volatility will become more important as markets get closer connected.”
FP – “We see continued dedication to hedge funds,” Catherine Keating, chief executive of JP Morgan Chase’s private bank, told Reuters. “The things our clients are focused on are how does that hedge fund generate its returns? How much is correlated o the market? Clients care about transparency—what fees are they getting charged? They don’t mind paying fees as long as they’re getting value.”
Moffett Cochran, CEO of Silvercrest Asset Management, added, “The events of last year may have forever changed attitudes toward investing. It may be that their allocations to growth and equities will be lower. The vast majority of hedge funds had negative returns. The whole concept of absolute returns embedded in the hedge fund rationale was thrown out of the window.”
Press Release – Cogent Consulting LLC today announced a free version of its HedgeTrak web-based broker review and evaluation service for hedge funds. HedgeTrak Lite enables hedge funds to properly value trading and research services provided by their brokerage firms, in anticipation of upcoming registration requirements, and to meet the competitive requirements demanded by clients.
HedgeTrak Lite is being released in the wake of a new generation of hedge funds being launched, demands for increased transparency around the use of research and the commission sharing arrangements used to pay for them, and the SEC’s proposed registration requirements for hedge funds. HedgeTrak Lite is based on the full version of Cogent’s industry leading solutions HedgeTrak and ResearchTrak which are used by money managers to evaluate services provided by more than 600 brokers and third party research providers worldwide. Cogent currently supports more than 100 client sites for firms managing in excess of $10 trillion.
Canada.com – Holding a hedge fund conference at a casino may not be the best optics for an industry that was cast as one of the free-wheeling gamblers of the financial crisis, but players in the fledgling Canadian sector meeting in Niagara Falls this week have plenty of other things to focus on.
With investors demanding more disclosure about risk and liquidity exposure, it comes as no surprise that transparency is on the tip of everyone’s tongues at the World Alternative Investment Summit Canada at the Fallsview Casino Resort.
“Transparency is a big thing here in Canada,” Tom Hockin, chairman of the Expert Panel on Securities Regulation, told delegates to the summit, which ends Wednesday.
Investment News – Seizing on an anticipated increase in demand for alternative investments, a Greenwich, Conn.-based firm has rolled out an investible hedge-fund-tracking index that offers liquidity and transparency.
TrueBeta LLC’s index is designed to replicate the performance of the broader hedge fund universe through portfolios made up of liquid market indexes.
BusinessWeek – After contributing their fair share to the more than $1 trillion in estimated global financial industry losses in this credit crunch, hedge funds appear to be on the mend. However, the alternative investment vehicles known for returns that are uncorrelated to broad market indexes will, in Standard & Poor’s Ratings Services’ opinion, likely require more than deft trading strategies to return to their former glory days and once again attract investors.
We believe investors will consider other key differentiating factors. Transparency, for instance, appears to have surpassed performance as a criterion for choosing hedge funds.
West Palm beach (HedgeCo.net) – Swiss funds of hedge funds (FoHF) tech. provider Infonic AG, released the latest version of its software suite for FoHFs, HedgeSphere 4.3. “For many funds of hedge funds, including those with complex portfolio structures, management and incentive fees are still calculated manually – a time consuming and error-prone process.” said Thomas Furrer, Infonic AG’s CEO.
“This is an area of supreme client sensitivity,” he continued, “being the primary source of revenue for the management function and a major factor in liability and credibility in administration. HedgeSphere PAD 4.3 provides advanced automation to simplify and streamline the fee calculation process, providing near-real time availability, improving accuracy and transparency over fees and their attribution to investors,” “On the front and middle office side, HedgeSphere MO 4.3 provides tools to improve trading workflow and the exchange of information among portfolio managers, as well as enhanced equity exposure analysis.”
In this latest release, HedgeSphere provides enhanced capabilities for the calculation and processing of investor fees, including: in-advance fee calculations, automated fee crystallization and investor equalization tracking. In addition, HedgeSphere PAD now supports natural hedging and provides real-time views of cash available across accounting entities. Version 4.3 of HedgeSphere MO provides improved trading workflow and exchange of information among portfolio managers, as well as enhanced equity exposure analysis.
Headquartered in Switzerland, and with offices in Zug, Zurich and New York, Infonic AG is the provider of HedgeSphere, the leading product suite for operations of funds of hedge funds. Its HedgeSphere product range debuted in 1999 and has been adopted by the largest and most innovative funds of hedge funds asset managers and administrators in the industry.
Reuters – Harvard University’s multibillion dollar endowment is adopting a strategy of selling off some holdings in hedge funds, private-equity firms and other money managers to bring more money under the control of internal investing staff over the next few years, the Wall Street Journal said.
Jane Mendillo, head of Harvard endowment, told the paper the university’s move would allow it to be more nimble, have better transparency into the portfolio and more liquidity.
Reuters – Harvard University’s multibillion dollar endowment is adopting a strategy of selling off some holdings in hedge funds, private-equity firms and other money managers to bring more money under the control of internal investing staff over the next few years, the Wall Street Journal said.
Jane Mendillo, head of Harvard endowment, told the paper the university’s move would allow it to be more nimble, have better transparency into the portfolio and more liquidity.
PR Inside – “Hedge fund managers naturally seek international as well as national investors. To continue to do so in today’s evolving regulatory environment, managers are likely to need to establish operations in the EU for EU domiciled investors, in the US for US investors and offshore for international investors,” said Ogier partner Peter Cockhill.
Citing the various reports and legislative proposals put forward by governments and global regulatory bodies such as the OECD and IOSCO, and tracing these proposals back to their origins, the Ogier seminars drew several conclusions as to potential results.
“Transparency is the new paradigm,” added James Bergstrom. “In the near future only those offshore financial centres (‘OFCs’) which meet the regulatory and tax transparency requirements of the new Financial Stability Board will be permitted to participate in the international financial system.”
Reuters – The regulator of U.S. commodity markets said on Tuesday his agency’s weekly Commitments of Traders report will be revamped to include hedge fund positions for better transparency.
"Enhancing the quality of information in these weekly reports will better inform market participants and the public about the positions of the various types of traders," Gary Gensler, chairman of the Commodity Futures Trading Commission, said in a statement.
Caymen Net News – The Cayman Islands Financial Services Association (CIFSA) has addressed efforts to boost disclosure of information about hedge funds, and has cautioned that the move must be widely agreed and equally applied.
Meanwhile, regulators at the Cayman Islands Monetary Authority (CIMA) said it hoped the changes, contemplated for later this year, if approved, would aid industry transparency, improving global views of Cayman’s financial services industry as it struggles for approval from the Organisation for Economic Cooperation and Development (OECD).
“The most crucial aspect of this is to ensure that there is a comprehensive approach so that every regulated hedge fund is covered,” said CIFSA chairman Anthony Travers. “This should be achieved first. There is a real risk that disclosing partial information may colour the debate going forward and may not present Cayman in its best light.
