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.
Citywire.co.uk – Fund selector Christian Lundström, from Independent Investment Group in Sweden, is welcoming the evolution of the Ucits III space which is seeing more and more hedge fund groups entering the area.
Last week, HSBC Asset Management’s Farley Thomas warned on the trend of hedge fund groups launching Ucits-compliant funds, saying ‘Ucits is about trust, so retail fund firms in Europe should be protective of Ucits. Will the hedge fund firms be there to hold retail investors’ hands when things go wrong?’
While there may be fears for retail investors accessing such funds, many selectors are greeting the changes with open arms. Lundström is excited by the opportunity to access strategies which can ‘generate portfolio returns with low or even negative correlation to equities and commodities.’
CityWire.co.uk – Hedge fund giant Man Investments is to launch its popular AHL managed futures trading strategy into the retail market.
The fund, which is planned for launch on 1 October, will be domiciled in the UK and employ Ucits III powers. It will deal on a weekly basis, giving it the edge on a number of rival strategies, which tend to only offer monthly dealing.
AHL strategies have proved successful over the years. The firm’s flagship AHL Alpha hedge fund has returned 17.9% a year since 1995, when hedged back into sterling, according to the firm.
HedgeCo.net (West Palm Beach) – New York-based currency manager FX Concepts is launching a new Luxembourg-domiciled fund investing in its flagship Global Currency Program (GCP). The fund has been set up in conjunction with Deutsche Bank.
“Investor interest in active currency strategies has been very strong this year, and we’re delighted to make our Global Currency Program available to investors in UCITS format” said John R. Taylor, Chairman and CEO of FX Concepts. The new fund offers daily liquidity and has a €25,000 minimum ($35,000). Investments are fully collateralized and ring-fenced in accordance with the UCITS III directive. The fund will offer share classes in Euro, US Dollars, Sterling and Yen.
“In the current financial climate, investors are looking for strategies which offer maximum liquidity and transparency”, says Daniel Szor, Managing Director and head of FX Concepts’ London office. “FX fits these criteria very well, and now clients can participate through a fund which offers daily liquidity and minimized counterparty risk”.
The Global Currency Program invests in a diversified portfolio of 20-25 currency positions chosen from a universe of over 30 currencies. The program targets annualized returns of 10-15% with low volatility and has a track record of over eight years.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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Opalesque – Last week, we heard of fund launches from Galena (energy); Verulam (commodity); Twin Tree; Paulson & Co (distressed property); Abax (Asia macro); Odey (Ucits III); Pictet (agriculture); and Liontrust (European).
The Canadian Hedge Watch Hedge Fund Composite Index was up 2.26% in April (+4.66% YTD); RBC Hedge 250 Index 2.37%, 2.6% YTD; Morningstar 1000 Hedge Fund Index 3.4% (est.), 3.11% YTD; Lyxor’s investable Global Hedge Fund index -0.45%, 0.93% YTD; Greenwich Global Hedge Fund Index 3.49%, 3.91% YTD; Scotia Capital Canadian Hedge Fund Index -0.61%, 4.98% YTD; And the Eurekahedge April report showed hedge funds were up 3.9% YTD, and that the industry assets were now at $1.30tn.
West Palm Beach (HedgeCo.net) – Vienna based hedge fund manager Salus Alpha Group Services GmbH has been awarded the alternative investments award of geld-magazins for extraordinary good performance for their Salus Alpha Directional Markets UCITS III Funds.
The Swedish state pension platform, Premium Pension Authority, recently included Salus Alpha funds in its portfolio. Included on the platform are Salus Alpha Real Estate, multi manager funds Salus Alpha Event Driven, Salus Alpha Managed Futures and Salus Alpha Equity Hedged.
The Salus Alpha funds that were chosen are UCITS III compliant, and meet the strict requirements regarding transparency, daily liquidity and adequate administration procedures set up for hedge funds by the Swedish pension authority.
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West Palm Beach (HedgeCo.net) – The Swedish state pension platform, PPM, is including Salus Alpha funds in their premium pension portfolio with immediate effect. The Salus Alpha funds that were chosen are UCITS III compliant, and meet the strict requirements regarding transparency, daily liquidity and adequate administration procedures set up for the Premium Pension Authority.
By launching the first UCITS III fund that tracks a hedge fund index in September 2007, Salus Alpha paved the way for hedge funds as an optimal portfolio component for retirement investment, by adding multi-manager alternative investment products, the returns can be increased while decreasing the risk.
The Swedish pension system is divided in three parts; income pension, guaranteed pension and premium pension. For the premium pension the pension saver has a number of funds to choose from. Every pension saver can decide in which fund and what amount of money he wants to invest. At the moment the Premium Pension Authority’s fund holdings of 5.8 million pension savers are valued at a total of 27.5 Billion Euro ($36.7 billion).
By including these funds in the portfolio the Swedish Premium Pension Authority confirmed the market leadership of Salus Alpha in the regulated alternative investment sector.
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New York (HedgeCo.Net) – Hedge Fund firm Tudor Investment Corp. has suspended investor redemptions from its $10 billion BVI Global unit until March 31st, giving the company time to split the fund into two.
BVI Global was hit by a wave of client redemption requests after investors moved to withdraw 14 percent of their capital, according to a recent letter to investors. The hedge fund posted a loss of about 5 percent this year, while hedge funds as a whole lost an average of 22 percent through November 24th according to Hedge Fund Research Inc.
Tudor Investment Corp., run by Paul Tudor Jones, wants to separate the corporate bonds and loans from emerging markets and start a new fund called Legacy, according to a recent letter to investors. The BVI flagship fund will stick with its staple of stocks, bonds, currencies and commodities.
The company is asking clients to approve the split within the next two months. Capital would be placed into both the BVI Global Fund and the Legacy Fund, depending on the division of assets.
Tudor Investment Corp. manages approximately $17 billion. Jones’ Tudor Futures Fund has posted gains of 21 percent this year while the firm’s Tensor Fund Ltd has seen returns of about 34 percent, according to people familiar with the matter.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Times Online – Who would be in hedge funds right now? Man Group, which has long traded on its name as the world’s largest hedge fund manager, yesterday found the tag something of a liability.
The shares lost 35½p to 398p before a trading update next Monday, making a 46 per cent fall in six weeks, with analysts saying that it is heavily exposed to the whole hedge fund industry through its fund of funds portfolio. Barclays’ index of hedge fund performance shows a 5.6 per cent fall in the year so far to the end of August. Hedgies relied on high borrowing to generate high returns. Most are now being forced to sell positions to cut debt.
Meanwhile, there are growing question marks over Man’s flagship AHL managed futures fund, as its performance has slipped in the past quarter and the short-selling ban may have an impact on its strategy. Man itself is still available to be shorted.
Investec, which cut its target price from 650p to 460p, said: “The hedge fund industry looks set for further negative press, possibly impacting on short-term fund flows at Man, as well as its near-term share price performance.” Kaupthing cut its earnings forecast but held its 630p target pointing out that the AHL fund was still up 3 to 4 per cent in the year so far.
Bloomberg – Man Group Plc, the world’s largest publicly traded hedge fund manager, began selling a managed futures fund with a capital guarantee to Hong Kong individuals seeking protection from falling stock markets.
Man AHL Guaranteed Futures 3 Ltd. will trade mostly futures and option contracts on currencies, bonds, stocks, interest rates, metals, energy and agricultural products using computer-driven models, according to a fund sale brochure.
Credit Suisse Group will provide a guarantee for 90 percent of the initial investment in the dollar shares of the fund. The Australian dollar shares will be 105 percent capital guaranteed.
A 22 percent decline in Hong Kong’s Hang Seng Index since its Oct. 30 peak is forcing the city’s residents to reduce stock holdings and seek capital protection of their investments.
"We’re seeing strong demand for products that allow investors to diversify away from equities,” said Giselle Lee, head of sales for Man Investments (Hong Kong) Ltd. The protection of the initial capital investment adds comfort, "especially for first-time investors in alternative products.”
Managed futures funds bet on the directions of markets for various assets by trading instruments such as futures, options and forward contracts. Man Group began selling its capital guarantee fund in Hong Kong yesterday.
