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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Jeez! Everyone's worrying about the high frequency machine trader when...

it's the drunk ass trader who puts on his trade muscles and thinks he is channeling Jesse Livermore, you have to watch out for.  

Those not familiar with Jesse Livermore, he was the John Paulson (Trader not Sec'y) of the previous until now great Depression as compared to what we have now, the Great Deepression.  He reportedly made $100,000,000 in just one day, a staggering amount for 1929.  If he had turned in that paper currency and bought gold at the set rate of $35 an ounce, his heirs would have @ $1,200 per troy ounce $3,428,571,428.57 in gold today.  Or 28 571 428.57 troy ounces = 979.591837 short tons which is more gold than the UK, Turkey and Greece combined. No wonder Paulson, bought a gold mine, at least he won't end up with a Ohio Bus Station bathroom stall with his grey matter adorning the cold mottled institutional mosaic floor.

How a broker spent $520m in a drunken stupor and moved the global oil price

PVM Oil Futures trader Steve Perkins bought 7m barrels of crude in late-night trading binge on his laptop, driving the oil price to an eight-month high. 

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7862246/How-a-broker-spent-520m-in-a-drunken-stupor-and-moved-the-global-oil-price.html

 

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If Hedge Funds can't make money than who can?

Blackstone's Wien Says Fund Returns May Shrink by Half to Protect Capital


By Tom Cahill - Jun 15, 2010 Email Share

Vice chairman of Blackstone Group's advisory services division Byron Wein. Source: Blackstone Group LP via Bloomberg

Byron Wien, vice chairman of Blackstone Group LP’s advisory services division, said hedge fund returns may shrink by half as firms seek to protect investors’ capital.



Returns may drop to 10 percent from 20 percent as funds lose their “zeal,” Wien, 77, told the GAIM International hedge fund conference at Monaco’s Grimaldi Forum today.



“I’m worried that by trying to protect capital on the downside they give up too much on the upside,” he said. “The concept of hedge funds was to produce equity-like returns with bond-like volatility. The danger is we get bond-like returns with equity-like volatility.”



Hedge funds lost an average of 2.6 percent in May, the worst month since November 2008, according to the HFRX Global Hedge Fund Index. The S&P 500 retreated 8.2 percent, the biggest monthly drop since February 2007.



Wien called for a stock market rally in the U.S. last week, saying that Europe’s debt crisis caused too much pessimism in the U.S., where profits for companies in the Standard & Poor’s 500 index are projected to rise 17 percent this year. He forecasts the S&P 500 will climb to 1,300 from 1,089 before ending the year around 1100, where it started.



In April, he forecast that oil would go to $100 a barrel. At the time it was trading at $87, and is now trading at $75.25.



Wien called last year’s rally in stocks, oil and gold correctly. He incorrectly predicted that the dollar would fall to $1.65 against the euro. It fell to $1.51 in November 2009 and is now trading at $1.22.



Wien was chief strategist at hedge fund Pequot Capital Management Inc. from 2005 to 2009. He was a senior strategist at Morgan Stanley before joining Pequot.



To contact the reporter on this story: Tom Cahill in London at tcahill@bloomberg.net

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Head Fund Watch - May 2010

Now we have roughly 1,000 more funds reporting returns for May than we had on the 11th (1818) notice that the return edged lower and this is probably the first half and likely to be the best of the bunch.  Expect this week a continued slew of bad numbers, and soon we should here from the few that are making a killing.

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Hedge Fund Watch - May 2010

Notice the that only 1818 funds reporting their returns for May by June 11.  This isn't unusual as many don't report until this week. 

Expect this week a slew of bad numbers.

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