Funds Hub

Money managers under the microscope

You can’t win ‘em all

 Ah well, even superstar hedge fund managers can’t always get their timing spot on.

U.S. hedge fund boss John Paulson had been sitting on a 300 million pound profit on his bet against British bank Barclays just three months ago, but by holding on for too long has seen most of that gain wiped out.

Paulson held a 1.2 percent short position in Barclays last September when new disclosure rules came in, but on Tuesday he cut it to less than 0.25 percent. His entry price is not known, but the shares were at 350p in September and crashed to 55p in March, before soaring to 316p by Monday’s close.

New York-based Paulson, who has made billions betting against U.S. banks and some European lenders including RBS, looks to have still made at least 50 million pounds on the Barclays bet. But he may be further aggrieved after the stock fell sharply after he closed out, following a massive share placing.

Quality control

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After last year’s record poor performance, investors may view a warning that the quality of hedge funds could get worse with a certain degree of irony.

rtxa3mqHowever, according to the Hedge Fund Standards Board’s chairman Antonio Borges, this is one of the negative effects on the industry that proposed EU laws could have.

Odey to stay in the UK

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So Odey Asset Management isn’t going to be leaving the UK after all.

rtr1uo39CEO David Stewart told me today that the firm, which is planning to open a Swiss office, will “always have operations in the UK”, despite government plans for a 50 percent tax rate on top earners.

Nevertheless, the Sunday Times interview with Crispin Odey reflects the frustration many in the hedge fund industry feel from a combination of higher taxes and what they perceive as the UK’s failure to protect them from tougher EU rules, driven by the French and Germans.

Managing for the future

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One thing that the credit crisis has demonstrated is that even performing well isn’t always enough to stop investors in need of cash from taking their money out of a hedge fund.

rtr5afThe industry had its worst year on record last year, losing nearly 20 percent in performance terms, but not everyone lost money.

A loud and clear call

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rtr1y8m4It may not have been a massive surprise, but ECB President Jean-Claude Trichet had an unwelcome message for hedge fund managers today.

The current crisis is, apparently, “a loud and clear call” to roll out regulation to all important market players, “notably hedge funds and credit rating agencies”.

Je ne regrette rien

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Schroders today reported exceptional losses of 167 million pounds — this was largely due to 147 million of writedowns on its own investments in hedge funds, private equity, fixed income and seed capital.

Analysts at UBS noted that these four areas had total investments of 585 million pounds at September 30, meaning the group had taken a 25 percent writedown.

Hedgies leave fancy duds at home as credit crisis crimps style

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rtr1mgp6By Svea Herbst

 

Ladies and Gentlemen: you may leave your ball gowns and tuxedos at home tonight.

That’s the message the badly battered hedge fund industry is sending its managers, lawyers and accountants who are planning to attend Hedge Funds Care, one of the industry’s most successful charity events in New York on Wednesday evening.

In the wake of the industry’s 19 percent loss last year, organizers scrapped the annual black-tie dinner in favor of a cocktail party, Kathryn Conroy, the charity’s executive director said.

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