Funds Hub

Money managers under the microscope

from Reuters Investigates:

Morbid money-spinners

If the life settlements market seems ghoulish, here’s a British scandal which isn’t doing the image of the business any favours. It’s one of the worst the country’s seen.

Around 30,000 mainly elderly investors in the UK put their money into a company called Keydata, hoping to make a little extra cash to fund their own retirement with the promise of a healthy return.

What they were buying sounded kosher, even if it did depend on how fast their wealthy American counterparts were dying. Of course, the investors may not have known that.

As is so often the case with these things, the projections were a little optimistic. And then some other irregularities blew up. Around 100 million pounds went missing, one of the business’s partners dropped dead in Singapore and the investment company was shut down by the regulators, leaving British pensioners like Tony and Pam Tobin out of pocket.  The Serious Fraud Office is investigating.

Morning line up

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Hedge fund stories from the past 24 hours from Reuters and elsewhere:

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Hedge funds call for softening of EU plan for pay caps – Daily Telegraph

 

SFO probes Dynamic Decisions - Reuters

 

Fund manager Horseman to step down - Reuters

 

Insider trading becomes systemic at hedge funds – Bloomberg

 

Chinese sovereign fund hires Tudor manager - Wall Street Journal

K1 performance chart shows steady gains

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We hear German hedge fund K1 and its boss Helmut Kiener have attracted the attention of prosecutors, so it’s worth dipping into the hedge fund performance numbers to see what all the fuss is about.

Below is a chart from the K1 website showing the serene progress of Kiener’s “K1 Fund Allocation System” until the financial crisis sparked an unprecedented wobble that was quickly righted. The total return since inception though, is still comfortably above 800 percent.

Shadow of Madoff

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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.

rtr23ea9Ashraf 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.

from Global Investing:

Reuters Funds Summit: Madoff, the silent presence

Master-fraudster Bernie Madoff is the invisible guest at an annual fund fest in Luxembourg, the European capital for fund administration.

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.

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