Money managers under the microscope
In the midst of scarborous political denunciations of the industry and predictions that new regulations could cost UK managers 3 billion pounds we receive some heart-warming news. Hedge funds, according to HFR, have turned it around.
2008 may have been rough as hell, but April 2009 was a banner month. Hedgies exploited volatile energy prices while quants also gained as the industry put up its biggest gain since February 2000 — back when Osama bin Laden was struggling for media attention, oil was at about $20 a barrel and the world lost bluesman Screamin Jay Hawkins.
The news of a near 4 percent aggregate gain over the month is a further sign that the hedge fund industry seems to have the resilience to prosper at the back end of the credit crisis. We have already seen that institutional investors have tended to stick by their commitments to hedge fund investment, and anecdotal evidence of dwindling outflows is being backed up by hard data. In turn, with redemptions slowing, hedgies can get back to the business of getting their cash into the markets once more.
Combined, those factors mean it is no surprise that the industry looks like a sweet spot for acquisitions activity, if only more buyers had the money to take advantage of still depressed valuations. Aberdeen Asset Management has stuck its head over the parapet in recent days and the Guiness family has bought in to 47 Degrees North. Even Nicola Horlick’s Bramdean has attracted an approach despite the embarrassment of its Madoff exposure.
Horlick, who once refused to hand over her valuable to a robber holding her at gun point, has already hit back at Tchenguiz. Bramdean Alternatives issued a letter on Thursday challenging him to substantiate his claims alongside a warnings that issuing misleading statements is an offence under the Financial Services and Markets Act.