Archive for August, 2009
Hedge fund manager, Bluenose Capital Management Ltd. is launching the Bluenose Capital Market Neutral Fund, aimed at accredited and professional investors.
Going live on October 1st, 2009, the new fund will employ a proprietary factor-based approach to trade highly liquid US & Canadian equities, according to a letter to investors obtained by HedgeCo.
“We strive to generate a 15% annual compound return with less volatility than the S&P/TSX and S&P500 with almost no correlation to the benchmarks,” the fund manager said. “Our goal is to achieve absolute returns regardless of market conditions by combining US and Canadian equity market neutral and opportunistic trading strategies. Preservation of capital is of utmost importance.” Bluenose said that potential investors should see an investment horizon of at least 5 years.
Bluenose is in September conducting meetings in 13 cities globaly from New York and Irvine to Milan and London.
Their projected timeline for the investment vehicles:
Years 1-3: Live trading of factor-based market neutral strategy: Bluenose Capital
Market Neutral Fund.
Estimated max capacity: $350M.
Years: 3-5: Deployment of statistical arbitrage strategy: Bluenose Star.
Estimated max capacity: $250M.
Year 7: Launch of the convertible arbitrage strategy: Bluenose Converts.
Estimated max capacity: $200M.
Bluenose Capital Ltd. is registered with the British Virgin Islands Financial Services Commission as a Professional Fund under the 1996 Mutual Funds Act.
US Economic policy continues to sway the global marketplace, says Global Hedge Fund Group Ltd. (GHF), this has been to the benefit of its hedge funds, and the life insurance settlement fund in particular.
Global Economic data is improving, GHF said, but is still being hampered by a weak housing market. Oil prices are rising again as tension in the Middle East continues. The Obama administration is tabling alternative energy initiatives. Healthcare reform has become a major issue, but many questions remain as to how far reform will go and what portions of the economy may be effected. Potential increased regulation within the financial industry and securities markets can be expected to have a wide-ranging impact on investment opportunities.
“All these factors underpin the continued trend of investors turning to our hedge funds. Our invested assets have grown more in the first half of 2009 than the last three years” said Jeremy Long, GHF Group Economic Analyst.
“There is so much uncertainty in the traditional equity markets. Brief periods of good news are still punctuated with minor corrections. Investors are asking tougher questions and looking for better solutions. These investors make up the majority of our new clients in the last two years.” Said Long.
Clients are demanding that investment managers communicate more than just data
The following white paper was released by BK Communications Group, a company which provides outsourced marketing and client communications solutions for the asset management industry. According to a recent survey of institutional hedge fund investors, clients largely prefer that managers take the call for transparency one level further and communicate to them in a meaningful way that explains what they’re doing with the funds. Popular forms of communication adopted by investment firms include pitch-books, websites, and personal contact. According to a report by McKinsey & Co., providing full transparency and enhancing communication efforts can be useful in client retention and future asset gathering.
BKCG White Paper
The New Transparency: Words
Clients are demanding that investment managers communicate more than just data
Transparency has typically been equated with access to data (trade, exposure, valuation, etc.), but the financial crisis and fund scandals have led clients, investors, as well as regulators to demand more. Major surveys and anecdotal evidence indicate communication is now in demand. Clients want managers to put the numbers in context, to explain what they’re doing, to communicate on a clear and meaningful basis. This expanded transparency can help retain clients and strategically position a firm for future asset gathering, both by building a brand associated with full transparency and by ensuring that all touchpoints – from pitchbooks to websites to personal contact – are fully in place and high quality. Investment firms must carefully examine how they currently communicate, decide on any adjustments that must be made, and determine whether they have the internal capabilities and resources to execute on those adjustments.
- Communication is the new transparency. Data alone is no longer sufficient. Clients want managers to put the numbers in context, to explain what they’re doing, to communicate on a clear and meaningful basis
- SEI/Greenwich Associates’ global survey of institutional investors finds investors will “intensify their scrutiny of investment processes” and increasingly emphasize client reporting and communications.
- Preqin’s survey of 50 institutional hedge fund investors finds that events of the past 12 months have led 43% of respondents to expect “increased transparency and understandable strategy.”
- Providing full transparency can be a way of helping to retain clients and strategically position a firm for future asset gathering. McKinsey & Co’s major report (“The Asset Management Industry in 2010”) concludes that “winning asset managers will be those who forge a superior reputation and capabilities for service and sophisticated advice.”
- Communications transparency can be approached strategically, to ensure an investment firm’s brand is associated with openness and clarity, and to establish a reputation for thought leadership, as this is associated with mastery of core competence.
- Communications transparency can also be approached tactically by making sure that all touchpoints – from pitchbooks to websites to personal contacts – are fully in place and high quality.
- Many investment firms are shedding internal resources that are not profit centers, including communications personnel, or are hesitant to bring on those resources – leaving them without the necessary skills, or bandwidth, for an appropriate level of communications.
For the full report, please see BKCG Transparency White Paper
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Bart Mallon, Esq. runs hedge fund law blog and has written most all of the articles which appear on this website. Mr. Mallon’s legal practice is devoted to helping emerging and start up hedge fund managers successfully launch a hedge fund. If you are a hedge fund manager who is looking to start a hedge fund, please call Mr. Mallon directly at 415-296-8510.
“Big news this week: Bernanke is going to be staying where he is, at the head of the Federal Reserve. Of course, this is because he has ‘saved’ the United States from the near disaster of the Second Great Depression…or so every media outlet and financial ‘expert’ out there would like you to think.”
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“France has secured the names and details of some 3,000 suspected tax evaders with Swiss bank accounts in what the budget minister described as a first in its battle against banking secrecy.”
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How about a little honesty from commentators in the mainstream media? “Liquidity conflagrations” happen when people discover they have been lied to.
Anyone remember Bear Stearns? “We’re well capitalized” on CNBC? “Everything is fine”? Cramer’s pumping of them on his show as “safe”? Market participants in fact knew everything was not fine. There were statements flying around (that turned out to be true) that some counter-parties had begun refusing to novate deals with Bear.
” Conspiracy theorists will have to wait until the article described in Inside Science is published to determine whether it delivers on its claims. It claims to analyze stock holding across 48 countries and alleges they are held in very few hands. But the work was done by physicists, which means they may not have understood the limits of the data they were working with. ”
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Hedge Funds Strategy Performance
Hedge Funds Strategies Performance This Year
Hedge funds use many different strategies to achieve returns and some hedge funds seem to be shifting strategies to capitalize on the opportunities in the current market. To learn more about these strategies see this article. Also, you can join Hedge Fund Premium for an exclusive video to be added this quarter highlighting each of these strategies and explaining how they are utilized by hedge fund managers. Here is a list of the most popular strategies and how they have performed in the seven months to end-July.
Strategy: Long-Short Equity
- Well-known hedge funds using this strategy: Odey European, Toscafund
- Performance year-to-date: 11.45 percent
- Performance in 2008: -19.76 percent
Strategy: Managed Futures
Well-known hedge funds using this strategy: Man Group’s AHL and Winton Futures Fund
Performance year-to-date: -7.82 percent
Performance in 2008: 18.33 percent
Strategy: Global Macro
- Well-known hedge funds using the strategy: George Soros’s Quantum fund, Julian Robertson’s Tiger Management, Paul Tudor Jones’s Tudor Investment Corp.
- Performance year-to-date: 5.24 percent
- Performance in 2008: -4.62 percent
- Well-known hedge funds using this strategy: TCI or Atticus
- Performance year-to-date: 9.11 percent
Performance in 2009: -17.74 percent
Strategy: Fixed Income Arbitrage
- Performance year-to-date: 15.9 percent
- Performance in 2009: -28.82 percent
Strategy: Convertible Arbitrage
- Performance year-to-date: 31.14 percent
- Performance in 2009: -31.59 percent
Strategy: Emerging Markets
- Performance year-to-date: 17.54 percent
Performance in 2009: -30.41 percent
Strategy: Dedicated Short Bias
Performance year-to-date: -17.28 percent
Performance in 2009: 14.87 percent
Strategy: Funds of hedge funds
- Performance year-to-date: 6.95 percent
- Performance in 2008: -21.37
Learn more about Hedge Fund Strategies here.
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