Money managers under the microscope
News and views on the asset management industry from Reuters and elsewhere:
But one means that shows quite how drastic the change has been is in the area of risk management — not normally the sexiest topic but now an area of real concern for investors.
Money managers were drawn by Madoff’s air of mystique, his stellar reputation as a market timer, the apparently steady returns with rock bottom volatility and the absence of fees, which some collected from clients anyway.
City workers may dream of relocating out of London to somewhere a bit more laid back, particularly at rush hour, but one hedge fund manager is going the other way and is swapping the peace, quiet and good weather of New Zealand for the Big Smoke.
Jerry Haworth, founder of Auckland-based hedge fund firm 36 South, is moving to London’s West End in a bid to be closer to clients and to attract more assets.
It’s hard enough for fund firms to get investors to put money into markets when stocks are so volatile, but it seems they’re also still having to wrestle with the bad publicity from U.S. financier Bernard Madoff’s giant fraud.
Ashraf Mohamed, portfolio manager and head of Islamic funds at investment firm Stanlib in South Africa, told the London leg of the Reuters Islamic Banking and Finance Summit that investors are still nervous of another Madoff.
Today’s update by S&P Fund Services on its ratings for seven funds with exposure to Bernard Madoff’s fraud shows just what a blow to the fund of hedge funds industry the scandal has been.
S&P said that five funds of hedge funds that invested in Madoff and whose ratings it placed under review in December when the scandal broke have now been downgraded to “not rated” — Bonhote Alternative Multi-Arbitrage, DGC Pendulum, Dinvest Concentrated Opportunities, Dinvest Total Return and RMF Four Seasons.
from Global Investing:
Even though the former Nasdaq chairman is under arrest thousands of miles away from this discreet financial centre nestled between Belgium, France and Germany, his presence was omnipresent. Fund managers just can't stop mentioning him.
There seems to be an endless wave of bad news hitting the hedge fund industry at the moment — gates and suspensions, record poor performance, the Bernard Madoff scandal and so forth – but there are still one or two reasons to be positive.
According to a survey of institutional investors by alternative assets data group Preqin, conducted in January (and therefore after the alleged Madoff fraud came to light), only 8 percent said they were no longer confident about hedge funds and would reduce investments.
By Alexander Smith
If redemptions are getting the better of you and you thought your industry was about to disappear, you may be amazed to hear there are still those wanting to start their own hedge funds.
An email from Financial Technologies Forum LLC brings news of a new course in New York next month giving you everything you need to get going.