Funds Hub
Money managers under the microscope
Morning Line-Up: Gartmore, Lehman/Nortel case, dairy bid, Ireland
News and views on the asset management industry from Reuters and elsewhere:
Gartmore mystery stake-builder- FT
Lehman/Nortel pension UK court case – Reuters
Morning Line-Up: Lehman rumours, CalPERS names naming, Scandinavia
News and views on the asset management industry from Reuters and elsewhere:
Hedge fund Och-Ziff accused of Lehman rumours in court papers – WSJ
CalPERS should name 100 largest Californian politicians’ pays – Reuters
Private equity investments in Scandinavia on track to pre-2007 levels- Bloomberg
Morning Line-Up: Lehman rises from ashes, helpful hedgies sought
News and views on the fund industry from Reuters and elsewhere:
Lehman given go-ahead for new asset management company - Reuters
PIMCO calls for money market fund reform - Reuters
Altin ups macro allocation to 20 pct – HedgeWeek
GAM adds EM currency fund to UCITS range - Fund Strategy
SEC seeks hedge fund monitors - The Seattle Times
Morning Line-Up: Billet-doux for Lehman, PIMCO gets active
News and views on the fund industry from Reuters and elsewhere:
The day Lehman got a love note from a hedgie - Reuters
PIMCO launches first active equity fund - Reuters
HarbourVest seeks London port - FT.com
Art market prices set to rise 40 pct - HedgeWeek
It’s not just the leverage
If private equity is anything to go by, there is plenty of hope for hedge funds operating in the new, post-Lehman world of lower leverage.
A study by the Center for Entrepreneurial and Financial Studies and Capital Dynamics, out today, finds that two-thirds of private equity’s value creation is down to improving companies it owns or rising market multiples.
Leverage, in contrast, accounts for just one-third.
Hedge funds used leverage extensively in the run-up to the credit crisis and whilst it has crept up from the very low levels seen this year, some executives say it will never again reach some of the very high levels we saw.
However, many managers say they don’t need such high levels of leverage anyway as investment opportunities are still so good, even after a bumper 2009 where returns were boosted by rising market multiples.
The CEFS/Capital Dynamics study doesn’t cover hedge funds, which obviously use a different business model to private equity. But it does suggest that alternative investment funds are not simply reliant on high levels of borrowing to generate a decent return.
Morning line-up
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
SEC war on hedge’s derivatives – NY Post
Hedge funds could nab $11 bln from Lehman – Alphaville
Galleon brought down by beauty queen – Huffington Post
Hedgies pump up stock exposure – Reuters
Citadel stronger in ’09
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.
Citadel’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.
This comes after what the WSJ says was an $8 billion loss of clients’ money last year.
Until 2008, and like many top funds, Griffin was turning investors away. Those in the fund paid 20 percent of profits plus commonly 4 to 8 percent of assets, the article says.
Griffin now has plenty of new ideas — he is launching four new funds and expanding into investment banking to plug the gap left by Lehman – but he is now cold-calling investors to raise money.
How times have changed.
Out for the count
A bit delayed this, but drawing your attention to Parvathy Ullatil’s entertaining look at hedge fund managers going at each other with fists and gumshields, rather than outlandish claims of stratospheric bonuses. Photos from Reuters pictures.
It was the kind of opportunity loss-stricken investors probably wished for in the worst months of the financial crisis: getting a bunch of hedge fund managers in a boxing ring and pummeling them.
But the mood at the hedge fund “fight night”, held in Hong Kong late on Thursday, was exuberant, as managers and executives slugged it out, raising for charity nearly HK$700,000 ($90,300) from auctions.
Asian hedge funds have returned close to 22 percent year to September, outperforming their U.S. and European counterparts, a year after the Lehman Brothers’ collapse rocked the industry.
Most of the tables were booked by banks and other financial institutions seeking to win favour with the industry. Six matches were held in total, with six winners crowned at the end of the night.
Hedge funds 3A scored big with their competitor, John “Headcount Reduction” Crane, who at 49 was the oldest to jump into the ring. Crane beat out his much younger rival, Link-ICAP’s Justin “Carve ‘em Up” Jones on the judge’s decision.
“I really had to work on resisting the urge to kick my opponent,” said Crane, a long-time practitioner of Thai kickboxing.
from Summit Notebook:
Private bankers chanting new mantra
Private bankers still getting their ears bashed from clients enraged about massive portfolio losses now are chanting a new mantra.
Murmur along with me, those seeking inner peace and appeased clients: the word is “holistic".
Three years ago, before Lehman and Madoff shattered clients’ confidence, the soothing formula might have been "absolute returns" or "structured products". No longer.
Bankers shooting French cuffs in Super 180 suits and obsessed with spread sheets now are seizing on a word redolent of green tea, acupuncture, crystals and the New Age.
"Holistic" bubbled up at least four times at the Reuters Global Wealth Management Summit as bankers and consultants in Singapore and Geneva outlined how to keep clients after the market meltdown.
But what does a word meaning that whole entities have an existence other than the sum of their parts have to do with rich people and the gnomes that mind their money?
"Holistic" in bank-speak translates as handholding, face time and hustling to assure wary clients bankers are on the job. Mass mailings are out, daily phone calls are in.
