Funds Hub
Money managers under the microscope
Odey backs the bull case
Plenty of fund managers have been predicting a rally in stock markets after the sharp drops seen last year and early this year, but most have expected it to be no more than a bear market rally.
However Crispin Odey, one of the UK’s best known hedge fund managers with a pay packet to match, has stuck his head above the parapet and said he thinks the recent rebound in stock markets could be the start of the next bull market.
Odey has already profited from the market rebound through the Barclays shares he bought around the start of the year (having made money shorting banks last year). Despite a wobble early last month, the shares were his fund’s best bet in March.
Having begun in the banking sector — where Odey’s optimism rests on rising net interest margins rather than falling bad debts — and base materials sector, the rally could spread to other industries where capacity has shrunk enough to improve companies’ pricing power, he says.
Turn! Turn! Turn!
For all the political noise about hedge fund regulation, today’s Turner review looks like a relatively easy set of rules for the industry to stomach.
In his 126-page document, mostly about the banking sector, FSA chairman Adair Turner says the watchdog will demand more information from hedge funds and says regulators should be able make rules in areas such as capital and liquidity if hedge funds start to pose systemic risks or become “bank-like” in their activities.
A pretty pair
The shrinkage of the UK-listed banking sector is providing an interesting trade for Legal & General Investment Management’s $46 million Global Macro fund.
After some dramatic share price falls, banks now account for only around 10 percent of the FTSE 100. According to LGIM’s head of asset allocation David North, this means any potential damage of further bank problems to the index is likely to be a lot less from here onwards.
