Funds Hub

Money managers under the microscope

Enjoy the bubble, says Odey

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This year’s stock market rebound has turned into a bubble, or at least that’s the view of closely-followed hedge fund manager Crispin Odey.

rtr23liwOdey, who called a bull market back in April, reckons quantitative easing has fuelled investors’ desire to get out of cash and government bonds and into real assets, leading to a stampede.

However, there is little sign this bubble is going to burst in the immediate future and Odey reckons these conditions could continue until the end of the year.

For now at least, “everyone should enjoy it”, says Odey, whose European fund rose 6.5 percent in August, taking year-to-date gains to just under 47 percent.

Morning line-up

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

 
rtxcg5sHedge fund boss accuses PM of ignoring crunch alarm bell – London Evening Standard

Citadel to oversee Lehman assets – FT Alphaville

Hedgie Paulson mad about Citi – New York Post

Hedge funds hiring again after downturn – Reuters

Blackstone gem – buyout leader excels in hedge sector – New York Post

Changing the model

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Man Investments has invested another $50 mln into a start-up hedge fund, showing that, for those prepared to take the perceived risks, there may be good opportunities to back talented managers at the moment.

rtr25hd5The firm’s RMF Global Emerging Managers seeding fund has backed Hong Kong-based Minerva Macro fund, run by ex-Fortress manager Stanley Ku, having last month put $50 mln with 5:15 Capital Management’s flagship fund.

Caught short

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Short-sellers have taken a lot of flak during the credit crisis, particularly last year when the slump in banks’ share prices eventually prompted the FSA and other regulators to temporarily halt the practice among financial stocks.

rtr24tfuHowever, it is worth remembering that for all the headlines of huge profits made by John Paulson and others, the practice is not a guaranteed winner and can result in painful losses.

Not so good old Yellow Pages

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Hedge Hub readers shouldn’t have been too surprised by yesterday’s 15 percent slump in Yell’s share price.

rtr20jx8The directories firm — the one behind the UK’s Yellow Pages — faces months of talks with banks and shareholders after yesterday saying it plans to restructure its roughly 4 billion-pound debt burden for the second time in nine months.

Polar sees thaw

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Like most hedge fund firms, Polar Capital has had a tough time during the credit crisis — its full year results out today show assets practically halved between March ’08 and May ’09.

rtr1x0txHowever, at the Reuters Hedge Fund & Private Equity Summit in March, Polar CEO Mark Kary said he didn’t see any further redemptions in the pipeline.

The bear necessities

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BearGenuine non-correlation is flavour of the month in new hedge fund launches.

In English, that essentially means funds that don’t go down much when the market falls (we don’t seem to mind if a fund matches the market during a bull market).

On Monday 47 Degrees North, a firm backed by the Guinness family’s (of brewing fame) investment office, said it had launched a fund investing in electricity markerts, Middle Eastern and North African equities, insurance-linked securities and volatility arbitrage which is designed to have low correlation to equity markets.

In the brown stuff

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The unfolding crisis in British politics makes for fascinating viewing for the populace and great work for journalists, but it also of course has potentially far-reaching implications in the financial sector.

rtr248cnAs cabinet ministers resign and Labour MPs call for Gordon Brown to step down, several outcomes now distrinctly possible — Brown stays, a new Labour prime minister emerges or a general election is called and (if polls are correct) the opposition Conservatives win. The future direction of UK government policy is far from clear.

How(ard) do you do it?

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Brevan Howard Asset Management, Europe’s biggest hedge fund firm, has posted a 133 percent rise in operating profits to an astonishing 503 million pounds for the year to July 2008, demonstrating the benefits of being one of the (few) winners in last year’s market turmoil.

rtr8iowWhile the average hedge fund lost 19 percent last year, according to Hedge Fund Research, Brevan Howard’s main fund rose 21 percent.

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