Funds Hub
Money managers under the microscope
A timely withdrawal?
Spanish bank BBVA’s move to close down its alternative investment arms including hedge funds shows just how much things have changed in the industry, even within the past year.
BBVA said it had “decided to anticipate the possible effects of the current situation of markets and of the alternative investment industry”.
And judging by forecasts, the possible effects could be fairly bad for many hedge fund firms.
Research from Morgan Stanley shows 2009 may not be any better than 2008 for the once-booming industry, and could actually be worse.
The new wrong
Most hedge funds agree that the credit crisis has thrown up some interesting assets at bargain-basement prices, particularly in credit markets.
The problem? When you have to report net asset value performance to jittery investors and prices of these cheap assets are getting even cheaper, when do you buy?
Odey spies ‘the death of safety’
By Simon Falush
So you thought safe-haven pharmaceuticals and food producers were a safe place to shelter your assets?
Think again, says Crispin Odey, the well-known hedge fund manager who thrives on a contrarian approach to equity investing. He tells Reuters that defensives could be the next target for short sellers.
Blowin’ in the wind
The timing of the Alternative Investment Management Association’s hedge fund disclosure initiative indicates just how strong the winds of change are blowing in hedge fund land.
Coming just a day after ECB President Jean-Claude Trichet called the credit crisis “a loud and clear call” for extending hedge fund regulation, the move shows the hedge fund industry feels it must be more active in deciding the future shape of regulation.
A loud and clear call
It 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”.
Every Cloud…
As politicians and regulators worldwide prepare a new blueprint to marshall the hedge fund industry, the organisers of the GAIM industry conference release the early agenda for their annual Monaco pow wow.
Unsurprisingly, the June 16-18 summit takes the theme: Transformation In A New World Order. And even less surprisingly, several sessions are set to ponder how to best snag a new breed of circumspect investors, and how to adapt to a new regulatory environment.
Insurance policy
Shorting UK banks, it seems, is so last year.
Having profited from the implosion of the sector in 2008, many funds believe prices have fallen far enough, and in some cases are actually looking good value.
Outspoken star fund manager Crispin Odey this week revealed he’s now buying UK banks, having made money shorting them last year.
Saving Hendry? Thanks but no thanks, says Hugh
It was always unlikely that a letter of advice was going to change the mind of maverick hedge fund manager Hugh Hendry.
And in his latest letter to investors, Hendry has smartly rebuffed any attempt to ‘save’ him from his bond investments.
Mutual funds gaining ground on hedge funds?
Hedge funds have gained a increasing share of the investment pie in recent years but the trend could could be reversing, judging by separate comments made by UBS and Deutsche Bank on Tuesday.
Timothy Bell, global head of hedge funds advisory at UBS Wealth Management, said hedge fund assets could fall further to $1.2 trillion this quarter from $1.4 trillion at the end of 2008 and $1.93 trillion at their peak in mid-2008.
Staying positive
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.
