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HedgeCo.net (West Palm Beach) – Long/Short Equity managers who maintained a cautious stance through the recent market run-up appeared to be positioned to profit as markets shifted from cyclicals to defensives in June. Overall, the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) finished up 0.43% for June, bringing year to date to 7.18%.
Convertible Arbitrage funds continued to post the best performance of all the strategies in the Broad Index, with 4.05% for June and 23.95% cumulative performance YTD, Credit Suisse/Tremont Index’s monthly commentary reported. As equity markets’ recovered in the second quarter, managers began to profit again from the volatility arbitrage aspect of the strategy.
Overall, Emerging Markets finished the month relatively flat despite a rebound in economic activity in Asia, as countries across the region saw rising industrial and manufacturing output, the Index reported.
Credit-oriented hedge funds performed well as credit markets showed healthy activity, with $102 billion of investment grade bonds brought to the market in June. Many believe continued governments’ activism in the markets could provide additional opportunities for these managers.
Global Macro hedge funds posted their first negative monthly performance since October 2008 as the sell-off of short rates in US Treasuries negatively impacted the positions of a number of Global Macro hedge funds early in the month, Credit Suisse/Tremont said.
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West Palm Beach (HedgeCo.net) – Hedge fund adviser, Hennessee Group LLC, announced that the Hennessee Hedge Fund Index advanced +3.84% in April (+5.02% YTD).
“April continued to be a challenging environment for hedge funds, as the market rally was driven by short covering and momentum, rather than changes in fundamentals,” commented Charles Gradante, Co-Founder of Hennessee Group. “While we have seen some improvement in data (most typically that the rate of deterioration is slowing), most funds remain conservatively positioned. Funds are cautious and will wait for fundamentals to improve before significantly expanding their net exposures.”
“Hedge funds underperformed again in April, but have still outperformed year to date. Volatility remains elevated with the S&P 500 experiencing a gain or loss greater than 8% each month this year,” said Lee Hennessee , Managing Principal of Hennessee Group . “Last year hedge funds did a good job of protecting capital, so they don’t need a huge rally to reach a new high water mark. Equity markets would need to double from current levels to reach their previous high.”
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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New York (HedgeCo.Net) – Although hedge funds finished up 2008 with some of the worst numbers to date, they showed some signs of promise in December. According to the latest research by the Hennessee Group LLC, a New York-based advisor to hedge fund investors, hedge funds advanced .51 percent in December.
Hedge funds finished up the year down 19.15 percent according to the research. Although it was a dismal year for funds as a whole, they still outperformed the S & P, which was down 38.5 percent on the year, the Dow Jones, who dropped almost 34 percent, and the NASDAQ Composite Index, which posted a 40 percent drop on the year.
One challenge for hedge funds in 2008 was the record number of redemption requests brought on by clients. Large hedge funds such as Citadel, Harbinger and Cerberus, along with about 80 others, had to put some form of restrictions on client withdrawals.
“Year-end redemptions were significant, as the average fund returned 15% to 25% of investors’ assets. Combined with negative performance and complete liquidations, the entire hedge fund industry started 2009 at close to 50% of the capital it was at the beginning of 2008,” said Charles Gradante, Co-Founder of the Hennessee Group. “However, this should be a positive for funds as less capital will be chasing the same long/short trades, which should lead to better returns.”
The Hennessee Long/Short Equity Index saw a .31 percent advance in December, while the year to date was down over 18 percent. The Global/Macro Index rose .61 percent in December, although taking an almost 21 percent hit for the year. The Arbitrage/Event Driven Index, which was down 18.5 percent on the year, advanced 1 percent in December.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Reuters – Shares in BH Macro, a listed feeder fund to the Brevan Howard global macro fund, Europe’s biggest hedge fund with assets of $20 billion, have sunk to a 13 percent discount to net asset value as a wave of selling has swept through European financial markets.
The fund was down 2 percent at 1255 pence in afternoon trading. Earlier Tuesday, BH Macro reported in a regulatory filing that its NAV at the close of business on Oct 3 was 1411 pence per share.
"The whole sector has moved to quite considerable discounts," said Mark James, executive director at RBS. "BH Macro is trading on its widest ever discount."
BH Macro has about $1.6 billion in capital. It came to market in early 2006 to provide access to Brevan Howard’s global macro hedge fund, which was and has continued to be closed to new investors.
Reuters- Hedge feeder fund BH Global said on Friday it has raised $1 billion (500 million pounds) from a placing with investors, double its initial target of $500 million, which will make it one of the UK’s biggest listed funds.
The fundraising highlights the demand that exists for certain hedge strategies, despite the poor returns from many funds in the industry this year, and trumps that by fund of hedge funds Dexion Absolute which in December raised an above-target $950 million.
"We are pleasantly surprised by the extent of the response," BH Global chairman Lord Turnbull told Reuters.
Thomson Financial- BH Global Ltd., the second fund of hedge funds feeder fund to be floated by Brevan Howard Asset Management LLP, said it has raised $1 billion from its initial public offering in London, twice the amount expected.
Lord Turnbull, BH Global Chairman said, "To have raised $1 billion in these markets is a great result and certainly beyond our initial target of $500 million… This result clearly demonstrates investor appetite for high quality closed-ended funds." The company placed 70.8 million shares and also has an over-allotment option of up to $100 million, which is exercisable until June 22.
Its IPO comprised about 36.39 million U.S. dollar shares, about 11.24 million euro shares and about 23.19 million sterling shares — priced at $10, 10 euros and 10 pounds per share.
