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.
Reuters UK – New Horizon Capital, a Japanese private equity firm, said it may start raising its second fund this year as it sees opportunities to make money from investing in struggling companies.
New Horizon has five potential transactions in its pipeline, Chief Executive Officer Yasushi Ando said at the Reuters Private Equity and Hedge Funds Summit in Tokyo.
New Horizon is seeking commitment of 20 billion yen (142.1 million pounds) from Japanese and overseas investors for its first fund, Ando said.
Ginga Service Sector Fund, the third-best performing Japan-focused hedge fund in 2008, held its ranking in January by investing only in the telecommunications and services companies.
The 3.4 billion yen ($36 million) fund, advised by Tokyo- based Stats Investment Management Co., returned 0.7 percent last month, extending its 13 percent advance in 2008, according to a letter to investors.
Average losses in the $1.4 trillion hedge-fund industry reached 19 percent in 2008, the worst on record, as the biggest market declines since the Great Depression slashed asset values and caused investors to withdraw their money, according to Chicago-based Hedge Fund Research Inc.
Bloomberg – 21st Century Asset Management Co., run by former Nomura Asset Management Co. executive Takanori Shimizu, said it may seek growth through takeovers after the worst year on record for hedge funds.
Shimizu, 63, said he will also cut costs as the Tokyo-based firm strives to boost assets under management to 40 billion yen ($440 million) by the end of March 2010, from 14 billion yen as at Dec. 31, 2008.
“We are carefully considering possible cost cuts just like any other firm,” Shimizu said in an interview yesterday. “Acquiring another asset management firm to boost our assets may be a good strategy and we’re always on the lookout.”
The global credit crisis forced as many as 920 hedge funds out of business last year while the tally of job losses at financial firms worldwide reached 269,000. Last week, Rheos Capital Works Inc., a Tokyo-based hedge fund, said it would sell a majority stake to IS Holdings Inc. to weather the slowdown.
Bloomberg – Kanetsu Asset Management Co. will liquidate hedge funds, including Japan’s best performer last year, as commodities trading shrinks, a company executive said.
The Tokyo-based firm will shut DragonHorse, which according to data provider Eurekahedge Pte returned 27 percent in 2008, the highest among Japan-based hedge funds. Kanetsu Asset will also close two other hedge funds before the firm shuts at the end of March, because computer-driven trading of commodities has become less viable as volumes have declined, President Takashi Ogura said in a telephone interview today.
As many as 920 funds globally may have closed last year, eclipsing the previous record of 848, according to Chicago-based Hedge Fund Research Inc. Japan’s dwindling commodities market and regulatory hurdles to combining commodities trading with financial securities hindered Kanetsu Asset, which had 800 million yen ($8.9 million) in assets.
Bloomberg - Atsuko Tsuchiya, the Japanese hedge- fund adviser who left Merrill Lynch & Co. to found her own firm, led Atom Japan Equity Fund to an 18 percent return in 2008, beating rivals who suffered the worst year on record.
Tsuchiya, 36, achieved the gains in the fund’s first full year of trading, withstanding market losses and investor withdrawals that ravaged the $1.5 trillion hedge-fund industry, Bloomberg data shows. The Eurekahedge Hedge Fund Index fell a record 12 percent in 2008.
One of the nation’s few female hedge-fund advisers, Tsuchiya combined so-called event-driven and equity long-short strategies in the Japan-focused, 3 billion yen ($33 million) fund. Bets on companies that launched buyouts or bought affiliates to combat Japan’s first recession in seven years helped Atom dodge a 33 percent slide in assets at Japan-focused hedge funds last year.
Bloomberg - Sparx Group Co., Asia’s biggest hedge-fund manager, will likely miss its asset management target of 5 trillion yen ($57 billion) by March 2011 because of redemptions and losses amid the global market rout.
The firm has cut costs to counter the biggest market losses since the Great Depression, an effort that hasn’t prevented its total assets under management shrinking to 753 billion yen as of Dec. 31 on a preliminary basis, or about a third of the peak of 2 trillion yen in August 2006.
“Realistically, it’s going to be extremely tough” to meet the target, Shuhei Abe, the chief executive officer of the Tokyo- based firm, said in an interview on Jan. 23. “There is still room to cut more costs, while we also have to prepare for other unexpected events going forward.”
Reuters – Daiwa Securities Group Inc, Japan’s second-largest brokerage, said that it would drop its plans for a large private equity fund after talks with Blackstone fell through.
Daiwa had been in talks with private equity firm Blackstone Group LP to form a fund targeting Asian companies, Daiwa Securities Chief Executive Shigeharu Suzuki told Reuters on Tuesday.
Suzuki said in August that the brokerage was aiming for a 500 billion yen ($5.4 billion) fund to diversify its revenue sources.
"Now we are looking at funds as large as 20 billion yen to 30 billion yen," he said on Tuesday
"It is difficult to collect 500 billion yen in private equity fund in this environment," he added.
Daiwa had been aiming to form a big fund with Blackstone which has expertise in this area, Suzuki said.
Thanhnien – The PXP Vietnam Value Fund will raise as much as $200 million to invest in undervalued stocks, Snowball said.
PXP, the initials of Phan Xi Pang, Vietnam’s highest mountain, is betting that the stock market will recover as inflation eases and the nation’s trade deficit widens at a slower pace. The benchmark VNIndex may double to 750 points by the end of 2009, Snowball said.
“In the long term, the story’s intact,” Snowball, 47, said in an interview in Ho Chi Minh City. “As long as the government handles the development of the economy and the market correctly – so far they’re doing a very good job – then I think we’re fine.
Bloomberg – PXP Vietnam Asset Management, which oversees $225 million, plans to start a hedge fund by early next year as it seeks bargains in Asia’s second-worst-performing stock market, said co-founder Kevin Snowball.
The PXP Vietnam Value Fund will raise as much as $200 million to invest in undervalued stocks, Snowball said today.
PXP, the initials of Phan Xi Pang, Vietnam’s highest mountain, is betting that the stock market will recover as inflation eases and the nation’s trade deficit widens at a slower pace. The benchmark VN Index may double to 750 by the end of 2009, Snowball said.
“In the long term, the story’s intact,” Snowball, 47, said in an interview in Ho Chi Minh City. “As long as the government handles the development of the economy and the market correctly – - so far they’re doing a very good job — then I think we’re fine.”
Cambridge Varsity Online – Clare College has borrowed £15 million to invest in the stock market. The unprecedented inflation-linked loan is due to be repaid in 2048 and the College expects to make a profit of around £36 million.
Clare has already invested £3.5 million and aims to have invested the full amount within two months. Clare’s Bursar Donald Hearn said he hoped the market would have bottomed out by then: “We think the market is going to go down a bit more, but may begin to recover once the FTSE drops below 3,250.
“We’re borrowing at an interest rate of 1%, and we’re reasonably confident of a useful profit. The money will only be invested in funds which track stock market indices, and will be globally diversified including emerging markets,” he said.‘
Times of Malta – The situation in the international financial markets, although still displaying signs of uncertainty, seems to be settling down. Governments in the major economies, US, UK, Germany, France and Italy, no longer seem to be chasing fairies (or bad witches!), but appear to have got ahead of the situation.
The money markets (which were a major issue) are getting unblocked and as such even interbank lending rates are going down. However, this does not mean that the world has solved all its economic problems. We have simply gone back to the situation of a few months ago, when there was already fear of an international economic slowdown resulting from the increases in the price of oil and the consequent rise in inflation.
The recapitalisation of financial institutions by different governments, the partial or full re-nationalisation of such institutions and the continued provision of liquidity by governments to the financial system have restored a level of confidence that at last allows the system to function, even if not at an optimum, at least to an acceptable level.
Reuters Dubai – Gas exporter Qatar and Vietnam have set up a $1 billion fund (56 million pounds) to invest in sectors including agriculture, a Qatar-based newspaper reported on Tuesday.
Qatari sovereign wealth fund, the Qatar Investment Authority QIA.L, will provide 90 percent of the fund’s equity, Gulf Times reported, citing Phung The Long, Vietnam’s Ambassador to Doha.
"We have exchange ideas about setting up an animal farm for breeding cattle and lambs," The Long said. "We like to have cooperation in this field. Qatar can provide the finance to grow food grains in our land and these can be exported to Qatar."
Gulf government funds, with windfall income from energy exports, have set up several joint funds, some designed to improve access to food supplies.
The desert states in the world’s top oil-exporting region rely on imports of food — a factor that has stoked inflation to multi-decade highs this year as global commodity prices soared.
