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Reuters – Improving markets and a need to recoup 2008 losses will prompt investors to pour $50 billion (30 billion pounds) into hedge funds this year and slow redemptions, Barclays Capital said in a report on Tuesday.
More than 300 investors surveyed by Barclays’ prime brokerage unit reported stashing, on average, 14 percent of their portfolios in cash. Nearly 80 percent of these investors said they plan to start putting some of that cash back into hedge funds.
"In spite of dramatic changes in the investor landscape, certain investors were ready to deploy their cash balances aggressively once markets stabilized," Brian Reilly, a Barclays Capital managing director, said in a statement.
Bloomberg – Helios Capital Management Pte, the hedge-fund manager once backed by Tudor Investment Corp., plans to start a “Slumdog Millionaire” fund that will buy underperforming shares of Indian companies.
“We want to find slumdogs from the Indian equity markets who have the potential of becoming millionaires,” Samir Arora, founder of Singapore-based Helios Capital, said in an interview.
The firm plans to raise about $50 million by the end of July for its long-only Helios India Jai Ho Fund, Arora said. “Jai Ho,” which means “victory” in Hindi, is the Oscar- winning theme song from “Slumdog Millionaire,” a feel-good tale of a Mumbai orphan’s escape from poverty that scooped eight Academy Awards, including best picture, this year in Los Angeles.
Bloomberg – Abax Global Capital Ltd., a Hong Kong-based asset manager part-owned by Morgan Stanley, plans to open a hedge fund backed by Tudor Investment Corp. to outside investors for the first time.
The Abax Dymon Asia Macro Fund, which started with $113 million in August 2008, seeks to profit from regional economic trends. The fund will have a “clawback” arrangement under which half of the 20 percent performance fee earned is repaid to investors if the fund loses money in the next year.
Bloomberg – Like plenty of financial players, hedge funds are taking a beating.
Many once-high-flying managers have been swamped by losses. Others have abandoned the business after discovering it wasn’t such an easy path to riches. Even some of the biggest firms — Citadel Investment Group LLC, D.E. Shaw Group and Tudor Investment Corp., among others — have had to block investors from withdrawing money.
This is great news for, well, hedge funds and their investors.
The retrenchment might force hedge funds, lightly regulated investment pools, to rediscover what they once were — small, guerrilla investors focused on returns, not artery-clogging management fees.
Bloomberg – James Pallotta and Christopher Pia, hedge-fund managers who recently struck out on their own, are discovering just how much the global financial crisis is reducing investors’ appetite for risk.
Pallotta, who split from Tudor Investment Corp. last month, and Pia, who spent 13 years managing money for Moore Capital Management LLC, probably will raise about $500 million apiece this year, according to brokers who provide loans and administrative services to hedge funds. Michael Ryan, who left Credit Suisse Group AG to open Jai Capital Management, will top out at around the same amount, according to the brokers, who asked not to be identified because the funds are private.
Investors, who put more than $1 billion each into seven new hedge funds last year, are scaling back after the industry posted its worst year on record in 2008. Whether it’s a big-name manager like Boston-based Pallotta or a newcomer, that threshold will be harder to cross this year than in the boom of 2002 through 2007.
