The Case for DOW 4500 WATCH IT Unfold! - Week 10

Well, at this level we could expect follow through to 10,200 up to 10,300 as a this minuscule relief rally forces shorts to take some profits.  It will be interesting once Europe vacations start up how the market will react.  10,138 as evidenced by the chart is a critical level where that and the aforementioned levels represent huge confluence Fibonacci levels.  I would keep watching the European and IMF statements about the dollar, as there have been major efforts to talk down the dollar in the past month, as remarked upon in my Token vs. Economy articles.

As far status on the massive 20 head and shoulders of which we are at week 10 since the Goldman Top, we are still on target, for DOW 4500.  I continue to be an advocate of selling all rallies, as the economy still has a significant of gravity pulling it down.  10,197 is a minor Fibonacci retracement line, however being that this is a monthly chart it is still pretty significant.

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Huh?..? More hedge Funds Launches... or Losses

So if I am to understand the first article we can expect more fund launches in 2010... and this statement is basically factual, as new funds are always launched.  What matters most, is how many funds close during the same period and what is the net.  Given the last two, of the three articles, written by the same author.  It appears to negate the relevance of this survey which is likely strongly biased as hedge fund managers clearly hope that more investment money is coming in.  The twenty percent that called for more funds to close this year than last are the ones I 'd like to have manage my money.

Hedge fund managers predict more fund launches in 2010

By Emily.perryman

Created 07/07/2010 - 06:05

A survey of senior managers at hedge fund firms suggests the industry continues to recover from the global market crisis, as more than 82 per cent of respondents predict that there will be more fund launches this year than in 2009.
The survey of 381 managers by professional services firm Rothstein Kass also found that fewer than 20 per cent of survey participants believe that more funds will close this year than in 2009.
"While nearly 70 per cent of hedge fund professionals we polled still expect 2010 to be a difficult year, there are signs that conditions continue to improve. However, it is clear that the crisis has had a profound impact on the sector and its practices. Stung by fundamental misunderstandings regarding the nature and objectives of hedge fund capital pools, the community has responded by taking steps to offer greater transparency and enhance educational initiatives," says Howard Altman, co-chief executive and co-managing principal of Rothstein Kass.
"Though more than 73 percent of those polled agreed that the pace of redemptions will continue to slow this year, the industry continues to absorb lessons from a period of intense demand for liquidity. For many funds, a wave of redemption requests served as a reminder of the importance of attracting aligned investors with objectives and risk tolerances that are consistent with those of the fund."
The report also found that more than 67 per cent of hedge funds surveyed plan to raise additional investment capital this year.
"Examination of the likely sources of capital points to the continued institutionalization of the hedge fund business, with larger established funds more likely to attract assets from pensions, endowments and benefit plans drawn by the sector's track record of delivering superior, long-term results. High-net worth individuals and families seem to be gravitating toward the family office model when considering allocations to alternative investments, recognising the advantages of pursuing alternative investments as a component of an overarching wealth management strategy," says Altman. "In addition, the slower pace of redemptions has alleviated immediate liquidity concerns and restored fund stability, allowing funds to devote more substantial resources to core portfolio management activities and to evaluating operational best practices."
The research was conducted by Russ Alan Prince, a counsellor on private wealth, and Hannah Shaw Grove, an expert on behaviours and finances of wealthy individuals.

 

Hedge funds record lowest performance since November 2008

By Emily.perryman

Created 21/06/2010 - 06:51

The Credit Suisse/Tremont Hedge Fund Index lost 2.76 per cent in May, its lowest performance since November 2008.
Nine out of ten strategies in the index posted negative returns in May as market volatility increased amid continued European sovereign risk fears.
Dedicated short bias gained 5.84 per cent and was the only strategy to post positive returns for the month. This positive performance was characteristic for the short-oriented strategy which typically outperforms when markets are down.
Global macro was the second-best performer, finishing down 0.63 per cent for the month as managers benefited from their ability to perform tactical trades in primarily liquid instruments.
Fixed income arbitrage also performed well relative to other strategies as managers continued to reduce their risk and leverage levels while staying active in the market.
Directional strategies largely struggled to find profitable positions amid the market volatility and the largest drag on performance was caused by exposure to cyclical sectors.

 

Hedge funds drop 247 per cent as net outflows reach USD11.05bn

By Emily.perryman

Created 28/06/2010 - 13:52

Despite hedge funds successfully navigating a gloomy macro scenario and concerns over Greece’s fiscal position, the industry recorded negative net flows for first quarter 2010, research by Lipper Tass shows.
Redemptions filed at the beginning of the quarter to cash in profits and portfolio reallocation decisions drove investors’ consideration of alternative investments.
Money flows of the hedge fund industry for first quarter 2010 dropped 247 per cent from the net inflows of fourth quarter 2009 to USD11.05bn.
First quarter 2010 marked a polarization of money flows across hedge funds; larger funds tended to post relatively larger and positive money flows, while smaller funds recorded relatively smaller and negative outflows.
On a four-quarter rolling-period basis net money outflows of the hedge fund segment amounted to USD55.45bn—an amount accounting for more than 15 per cent of the sum of all negative quarterly money flows to the industry since first quarter 1994.
Despite the net outflows reading for first quarter 2010, global hedge fund assets are estimated to have increased quarter on quarter—from USD1.34trn at the end of December 2009 to USD1.39trn at the end of March 2010.
With the exception of fixed income arbitrage and managed futures, which both flipped the sign of fourth quarter 2009’s money flows, net outflows for first quarter 2010 resembled the pattern observed in fourth quarter 2009.
The bulk of net outflows in the first quarter were concentrated in selected hedge fund strategies, namely equity market neutral, event driven, managed futures, and multi-strategies.
Cumulative net inflows for the first quarter accounted for 0.91 per cent of the beginning-of-quarter assets; it was 0.64 per cent for the fourth quarter.

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We're not dead yet....

Ivy and UBP, between them 2.2 Billion Exposure to Madoff...  Ivy with the lowest exposure to Madoff shriveled in on itself and died, while UBP with the largest gets to see another day.  Not sure how hiring Larry from Ivy, helps, but I suppose the logic is that it was a damn sight better than UBP previous risk managers.

Larry Morgenthal named chief executive of UBP Asset Management

By Emily.perryman

Created 06/07/2010 - 14:48

Union Bancaire Privée has appointed Larry Morgenthal as chief executive of UBP Asset Management, the group’s US business.
He also assumes the role of chief investment officer of alternatives.
Morgenthal will spearhead the renewed activity in the company’s fund of hedge funds platform, following the reinforcement of its investment and risk management teams since 2009. UBP has been investing in hedge funds since 1972.
“The case for hedge funds and their alpha-generation potential is undisputed,” says Richard Wohanka, chief executive of asset management and alternative investments at UBP. “It is time to look at hedge funds in a new way: as core portfolio holdings, rather than as a small part of an alternatives segment. UBP has the right infrastructure to offer clients funds of hedge funds that can enhance the opportunity set for balanced portfolios, and for traditional equity and fixed income investments. Larry has a long track record of building alternative businesses through an understanding of client priorities and I am delighted that he will be leading the alternatives division at UBP.”
Morgenthal has 18 years of direct involvement in alternative investing and business development, having started his career managing the assets for two large US pension funds, NCR and Asea Brown Boveri.
He has held senior positions in Bank of America’s alternative investment group, where he headed the overall business and chaired the investment committee, as well as at Opus Capital Group, where he was managing partner, and Ivy Asset Management (BNY Mellon), where he held the roles of chief operating officer and later chief executive.

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