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Hedge Funds August Losses

admin — Thu, 09 Sep 2010 00:01:26 +0000

Hedge Funds August Losses

Hedge Funds Limit Losses to 0.55% in August 2010

Hedge funds have cut losses in August with managers trading more conservatively. In the month of August hedge funds lost less than 1% while the S&P 500 index by comparison fell 4.74% last month.

The Standard & Poor’s 500 Index slumped 4.74% last month, leaving it down 5.9% so far this year. The Barclays Aggregate Bond Index rose 1.29% in August and is up 7.83% year to date, Hennessee noted.

“Hedge funds started the month with reduced net and gross exposure levels, which allowed them to protect capital,” Charles Gradante, co-founder of Hennessee Group, said in a statement.

“Managers remain cautious given the global economic uncertainty, though the consensus is that we will likely avoid a ‘double-dip’ recession,” he added.

Gradante also noted that 43% of hedge funds reporting results to Hennessee generated positive performance in August. source

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EU Hedge Fund Vote

admin — Thu, 09 Sep 2010 00:01:15 +0000

EU Hedge Fund Vote

EU Vote on Regulating Hedge Funds Delayed Yet Again

In a hardly surprising move, the European Union has again decided to delay the vote on regulating hedge funds. The vote which was going to be held this month has been pushed back to October. According to European diplomats, France is holding up negotiations over its opposition to foreign funds having a “European passport”, an idea that the presiding Belgian government has supported.

Belgium, which holds the rotating six-month presidency of the EU, has put forward new proposals to unblock the negotiations, which started more than a year ago. It proposes maintaining the possibility of a “European passport” for foreign hedge funds but leaving it up to national financial supervisors to grant the license to operate.

In exchange, Belgium wants to adopt a common set of rules across the continent and give a greater role to three new European financial supervisors — agreed by EU finance ministers this week — if the rules are not implemented properly.

Representatives of the European Parliament, the European Commission and EU member states have repeatedly failed to reach a deal over the new hedge fund rules. They will meet again on Sept 15 to see if they can agree on a text for the parliament. Source

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Michigan Hedge Funds Investments

admin — Wed, 08 Sep 2010 00:00:45 +0000

Michigan Hedge Funds Investments

Michigan Pension Cuts Private Equity, Triples Hedge Funds

Michigan’s state pension fund has made a big statement about its confidence in hedge funds and lack of enthusiasm for private equity. The Michigan State Retirement Systems has tripled its allocation to hedge funds while simultaneously reducing its allocation to private equity. The fund upped its hedge funds investments from 2% to 6% of the total portfolio and reduced its much larger commitment to private equity from 20% to 14%. This is pretty emblematic of institutional investors’ feelings toward alternative investments, as hedge funds continue to gain fundraising ground while private equity loses commitments.

The $45 billion public pension fund has boosted its hedge fund allocation from 2% to 6%, Pensions & Investments reports. The hedge fund increase, as well as that of real return and opportunistic funds from 1% to 4%, will be funded by a sizeable cut in its private equity allocation from 20% to 14%. The reduction in p.e. investments will be undertaken gradually.

The increased hedge fund allocation will begin to take effect in October, the beginning of the Michigan Systems’ fiscal year. But the pension already invested an additional $203 million with Aetos Capital in June; Aetos runs a customized fund of hedge funds portfolio for the systems.

“Private equity has done well for the funds, but with increasing liquidity needs over the next several years, the change will reduce illiquid asset holdings,” Terry Stanton, a spokesman for the Michigan Department of Treasury, told P&I. Source

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Hedge Fund Marijuana

admin — Wed, 08 Sep 2010 00:00:38 +0000

Hedge Fund Marijuana

Hedge Fund Executive Arrested for “Complex” Pot Farm

I thought I would start this short week with an amusing story that has come out about a Connecticut hedge fund, New Stream Capital, and the arrest of its head of investor relations. Tara Bryson and her boyfriend recently received a grant from the state government to set up a goat farm. Instead, the two built a farm to grow marijuana.

The couple has denied the charges, but for Ms. Bryson’s employer this is just another problem in a rough year fraught with disappointing returns, lawsuits and a possible SEC investigation. It’s even harder for the hedge fund to distance itself from the case because Tara Bryson is actually the brother of David Bryson, the firm’s co-founder. One of my favorite headlines so far, “Hedge-Fund Executive Exploring Other Growth Opportunities”.

Sign of the times? An executive at a billion-dollar Connecticut hedge fund was arrested on felony charges of allegedly running a huge year-round pot farm inside her home. But her boyfriend says the cops have it wrong, that they’re goat farmers, not dope farmers.

Tara Bryson, 36, is the sister of David Bryson, co-founder of Ridgefield, CT-based New Stream Capital. She heads investor relations for the $1 billion asset-backed lending fund that charges high rates to loan distressed companies money. At one time or another, well-known clients including Veronica Hearst, Elizabeth Taylor and Kathy Ireland used the firm to help fund real estate and business deals.

Bryson was arrested by the Connecticut State Police in Newtown on July 9th for three felonies: possession of marijuana, cultivation of marijuana, and conspiracy to cultivate marijuana. She plead not guilty, was released on $25,000 bail, and returned to work with investors at New Stream. Source

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Hedge Fund Managers Quit

admin — Sat, 04 Sep 2010 00:02:46 +0000

Hedge Fund Managers Quit

Hedge Fund Managers Quitting and Leaving the Industry

Many well-known and very successful hedge fund managers are quitting. Starting with Stanley Druckenmiller, other hedge fund and money managers have followed suit. The following video talks about why hedge fund managers are quitting and leaving the hedge fund industry. To watch this video via RSS and Email please follow this link.

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Och-Ziff Assets

admin — Sat, 04 Sep 2010 00:02:39 +0000

Och-Ziff Assets

Och-Ziff Fund Assets Rise by $200 Million in August

Hedge fund giant Och-Ziff’s fund assets increased by $200 million in August 2010. INvestors deposits of $200 million brought up the firm’s total assets under management to $26.1 billion.

Holdings increased to $26.1 billion as of Sept. 1 from $25.9 billion the prior month, the firm said in a filing today with the U.S. Securities and Exchange Commission. The OZ Master Fund, Och-Ziff’s main fund, was little changed, maintaining a gain of 3 percent this year.

The firm’s funds held their value as the Standard & Poor’s 500 Index fell 4.7 percent for the biggest August slump in nine years. During the month, the U.S. government said the economy grew less than previously forecast in the second quarter, home sales in July plunged by the most in more than a decade and weekly jobless claims were the highest since November.

Och-Ziff’s Asia Master fund was little changed in August with a year-to-date gain of 3.7 percent. The Europe Master Fund rose 1 percent last month for a 3.2 percent increase this year, according to the filing.

The firm was started in 1994 by former Goldman Sachs Group Inc. trader Och, 49, and Ziff Brothers Investments LLC with money from the Ziff media empire. Source

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European Fund of Hedge Funds

admin — Thu, 02 Sep 2010 12:00:43 +0000

European Fund of Hedge Funds

European Fund of Hedge Funds Face Grim Future

Funds of hedge funds are facing a hard reality as the industry suffers large outflows. According to Reuters, many smaller European fund of hedge funds may close or have to go through a merger or sale. These fund of hedge funds have seen a fifth of the industry’s assets leave in $130 billion outflows. While hedge funds have recovered successfully after 2008, fund of hedge funds are still struggling to generate impressive returns and attract investors.

Having seen $130 billion (84.5 billion pounds), or more than a fifth of assets, leave since the start of last year, firms are still finding asset-raising tough, as witnessed by Eddington Capital’s recent decision to shut down and return clients’ cash.

And with negative returns so far this year hardly likely to encourage a flood of new investors, a sector that many say is overcrowded will have to face up to lower incomes and higher costs, through closure or deals, or by changing their focus.

“There will be attrition,” said Mark Wightman, hedge fund industry commentator and head of strategy for Asia-Pacific at specialist technology group SunGard.

“I’d expect M&A and consolidation in the sector because a lot of guys are doing similar things,” said Wightman who closely advises funds of funds on corporate issues.

Last year Cheyne Capital bought smaller fund of funds firm Altedge, while last month Swiss private bank Reyl Group’s fund of funds unit told Reuters it was looking at options such as a merger or acquisition to help it bulk up. Source

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Hedge Fund AR Lawsuit

admin — Thu, 02 Sep 2010 12:00:37 +0000

Hedge Fund AR Lawsuit

Hedge Fund Drops Suit Against Absolute Return + Alpha

Hedge fund firm Elliott Management Corp. has decided to drop its lawsuit against Absolute Return + Alpha magazine. Elliot argued that by disclosing the firm’s letter to investors, the trade publication harmed the hedge fund and its competitive position. But the hedge fund manager has now dropped the suit just before a court hearing next week.

Hedge-fund manager Elliott Management Corp. on Tuesday dropped its court case against trade publication Absolute Return + Alpha, bringing to a close a battle over public disclosure of a hedge fund’s investments.

Elliott withdrew its court petition seeking discovery about who leaked Elliott’s investor letter to the publication just two days before the trade magazine was due to submit an affidavit to the New York state court in Manhattan.

The magazine published its article Aug. 26 despite the pending court case.
Elliott, which argued last week that disclosure of its positions in the investor letter would harm Elliott and damage its competitive position, said “developments since the application was filed made the discovery unnecessary.” Source

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First China Hedge Fund

admin — Thu, 02 Sep 2010 00:02:39 +0000

First China Hedge Fund

Chinese Asset Managers Launch First China Hedge Fund

Hedge funds have been making moves toward working more China, although the government has not provided the most welcoming environment for investment funds. Although there are a number of China-focused funds, two asset managers in China are set to launch the country’s first official hedge funds.

Chinese regulators in July eased restrictions on asset managers’ trading of index futures, giving the green light to launch separately-managed account products aimed at high-net-worth investors. The first firm to walk through that new door will be E Fund Management, which plans to launch China’s first officially-registered hedge fund.

E Fund, China’s second-largest asset manager, says its product will be the first institutional hedge fund in China, targeted a China’s growing population of millionaires, which now number nearly a half-milllion. The firm has already applied to the China Securities Regulatory Commission with details about the fund, although the CSRC said it will essentially not regulate hedge funds.

In a statement, E Fund said its new hedge fund will “seek to hedge market risk through stock index futures and other tools.” Source

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Lehman Brothers Hedge Funds Collapse

admin — Thu, 02 Sep 2010 00:02:33 +0000

Lehman Brothers Hedge Funds Collapse

Lehman Brothers Lawyers Investigating Hedge Funds

Lehman Brothers’ former CEO Dick Fuld testifies to the Financial Crisis Inquiry Commission today, to explain how the massive investment bank failed. One possible explanation that Lehman Bros. is looking into is that hedge funds accelerated the collapse in 2008. The Times wrote compared the theory to the conspiracy in the JFK assassination, “It is the Wall Street version of the grassy knoll.” A team of lawyers hired by the estate of Lehman Brothers Holdings has requested the trading records for 2008 from Goldman Sachs and several hedge funds including SAC Capital Advisors, Citadel Investment Group and Greenlight Capital.

Nearly two years after the collapse of Lehman Brothers, some on Wall Street still wonder whether a handful of the nation’s most powerful hedge funds conspired to push the 158-year-old financial giant into bankruptcy while making big profits for themselves.

Now, in search of a smoking gun, a law firm hired by the estate of Lehman Brothers Holdings has demanded trading records, e-mail and other correspondence for all of 2008 from a collection of prominent hedge funds and the venerable Goldman Sachs.

The firms named in the inquiry make up a Who’s Who of the hedge fund world, and include SAC Capital Advisors, run by Steven A. Cohen; Greenlight Capital, managed by David Einhorn; the Citadel Investment Group, led by Kenneth C. Griffin; and Och-Ziff Capital Management, whose chief executive is Daniel Och. Source

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