Funds Hub

Money managers under the microscope

Wace wades into HFT debate

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High frequency trading strategies have been in the news for all sorts of reasons recently, attracting controversy over their effect on markets, whether some other investors may be disadvantaged, or for the level of fees piled up as the trades tick through in their thousands.

rtr26sy3However, Ian Wace, co-founder of Marshall Wace — one of Europe’s biggest hedge fund firms with assets estimated by EuroHedge at $6.5 billion at the end of last year — has leaped to the industry’s defence, citing performance from the firm’s own Eureka fund.

“We manage an active trading fund and I do accept there are frictional charges,” he said at yesterday’s Hermes Fund Managers and City of London responsible asset management conference. “If we have turnover of 15 to 20 times per annum and it costs 30 basis points to turn the assets that implies a 6 per cent charge per annum.

“People could say “how can you justify that?”. I reply that if you provide 14.59 per cent of absolute return after fees and the 6 per cent charge, then it could be justified.

New blow for hedge fund lobby

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The battle over how hedge funds will be regulated by the EU has been going on for some time now and has taken many twists and turns along the way.

rtx5ivzHowever, after apparently making progress with the latest compromise text from Sweden, opponents of tough regulation may have hit a setback.

Citadel stronger in ’09

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2009 has proved so far to be a bumper year for hedge funds — not least due to a huge rebound in the price of most assets — helping eradicate at least some of the bad memories of last year.

rtxeg3fCitadel’s Kenneth Griffin has been a case in point.

An article in today’s Wall Street Journal (which dubs him a ‘titan’ and a ‘hedge fund king’), says Citadel made $5 billion in trading profits in the first nine months of this year as markets recovered.

Paul Compton: How bitter a pill is the draft EU directive?

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Guest blogger Paul Compton is head of product management at SunGard Alternative Investments.

The views expressed here are the author’s own and do not constitute Reuters point of view.

Hedge funds, take heart!

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Many commentators have written the obituary of the hedge fund industry, or of some of its more esoteric or leverage-dependent strategies, during the credit crisis.

rtr257fkSo it may be of some encouragement to see a new launch by Invesco Perpetual, announced today.

Robert Olman: Hedge funds adapt after ‘perfect storm’

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Guest blogger Robert Olman is President of Alpha Search Advisory Partners.

The views expressed here are the author’s own and do not constitute Reuters point of view.

The ‘perfect storm’ of 2008 revealed several flaws in the hedge fund model.

rtr25ryoWith the decision by multiple funds to drop their gates in response to a tsunami of redemption requests, the mismatch of the liquidity in the funds’ investment portfolio and the liquidity provided to the investors became apparent.

Short-sellers back in the money for now

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For better or worse, hedge fund returns have a tendency to follow markets, in part because most long-short funds are net long most of the time.

rtxak52So after a huge rebound in the stockmarket this year, which has helped hedge funds make up some much-needed ground, October proved a difficult month when the market fell in the second half of the month.

from MacroScope:

The word on Gordon Brown from Cayman

Gordon Brown is truly having a rough time. Rebuffed by the United States, International Monetary Fund and others for floating the idea of a tax on financial transactions at this weekend's G20 meeting, he has now got short shrift from the Cayman Islands.

McKeeva Bush, the veteran Caymanian politican who is now premier of the British Overseas Territory, popped in to the Reuters London headquarters for a chat this week. His main concern was to explain plans for making the islands an easier place for financial services personnel to live in. He would like some of those 8,000 hedge nearly 10,000 funds that are registered there to be more than just brass plaques. But, when asked, he also had time to dismiss the idea of a transaction tax out of hand.

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