AllAboutAlpha.com – Several pundits have recently pronounced the so-called “hedge fund model” to be dead (or at least “upended“).  But is the patient clinically dead, or is it just having an out-of-body experience?  After the recent trauma experienced by the sector, hedge fund administrators will likely play a central role in bringing the industry back from the other side.

Hans Hufschmid, the CEO of GlobeOp, one of the world’s biggest hedge fund administrators, recently told the FT that:

“There will be tremendous trading opportunities. We are seeing opportunities that we haven’t seen in our lifetime, just in terms of relative trading let alone directional…

“Convertible bonds are extremely cheap, there are mortgages that are extremely cheap and distressed assets that are extremely cheap. There are lots of opportunities that are ideal for hedge funds to take advantage of.

“Further, hedge funds will face less competition with investment bank proprietary trading desks largely disappearing from the market.”

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West Palm Beach (HedgeCo.net) – Hedge fund technology service, Point Nine, has announced the opening of their new office in Limassol, Cyprus. This is the second office opening for Point Nine this year, which follows the recent opening of Point Nine’s facilities in New Delhi, India.

The Cyprus office is the second to be launched by newly appointed CEO of Point Nine, Yannis Matsis.  Matsis’ 15 years experience in building and managing global debt capital market teams for Mizuho Bank and ING has been instrumental in the direction and supporting technology of Point Nine’s Middle and Back Office Services offering.

"The current financial crisis and the associated reduction in revenues for fund managers has put a bigger emphasis on cost reduction.  Outsourcing of the middle and back office operations to reliable service providers like Point Nine is an ideal way for fund managers to increase their operating efficiencies and reduce their operational risks and cost base”, says Yannis Matsis, CEO Point Nine. “We are expanding our geographical coverage to provide the highest quality service to our clients that we can be proud of."

The recent expansion from its London headquarters into the Middle East and Asia means a more personalised service for customers and ensures that all trade capturing/management, operations and reporting can now be handled in the relevant time zones required.

“When choosing to outsource the middle and back office operations, a customer must feel like the provider is an extension of their own team”, says Pavlos Christoforou, Head of Technology. “This expansion allows us to be closer to our customers and provide them with the best service within the industry.”

Point Nine’s technology interfaces with a number of prime brokers and fund administrators and provides accurate and secure transactions, which are processed by experienced staff across three locations in Europe, Middle East and Asia. Customers include Tier-1 banks, large Asset Managers and cutting-edge hedge funds.

Alex Akesson

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A new report released Monday by HedgeFund.net estimates the assets under management by hedge funds have reached nearly $3 trillion.

According to the report, hedge fund assets increased 4.41 percent last quarter, in spite of rough equity markets, to reach $2.973 trillion. The report combined data from a bi-annual survey of hedge fund administrators and information from HedgeFund.net’s database of more than 8,400 funds.

Peter Laurelli, vice president of Channel Capital Group which owns HedgeFund.net, said hedge fund assets will probably top $3 trillion sometime in the next couple of quarters, depending on performance.

Fund performance accounted for $91.28 billion being added to hedge funds last quarter, while investors placed an additional $34.21 billion in new assets with hedge funds. One dark spot for the industry was that liquidations of funds last quarter exceeded assets in newly established funds by $8.52 billion. Second quarter saw the third-highest level of hedge fund closures on record.

"It’s a natural evolution of the industry if you have funds that are not performing well," Laurelli said. "When you go through a period like we’ve had where there have been some large losses in the industry, you’re going to have fund closures. That doesn’t mean that the industry is contracting, it just means that there is some turnover."

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