Money managers under the microscope
Fund service providers were back in force at the GAIM hedge funds conference in Monaco this year, a small sign that the industry, while not exactly brimming with confidence, has at least crawled out of the doldrums of 2009.
The service providers including fund auditors, custodians and prime brokers, have drawn in their horns since the early years of the millennium when they were often the main sponsors of cocktails and dinners at large hedge fund events.
They were conspicuous by their near absence at GAIM 2009, as were the free-for-all champagne receptions, gala dinners and so on, as money drained from the industry after hedge funds suffered their worst ever losses in the crisis year of 2008.
One of the big four auditors, for example, brought 22 staff in 2008, but just four in 2009.
It may seem tenuous, but the small number of delegates present in Monaco’s Grimaldi forum on Wednesday at the start of the second day of the GAIM hedge fund conference is a clear indication that the industry is feeling renewed confidence after the gloom of last year.
The reason for the poor morning turnout is quite simple. A good proportion of the attendees didn’t make it to bed until at least 3.30 a.m. on the first full conference day.
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.
However, 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.
This year’s GAIM conference was far smaller than the three previous summer events, with fewer organized events, no sponsored gala dinner and restricted cocktail sessions where two or three bar staff struggled to satisfy hundreds of thirsty conference-goers
The fact was duly noted, initially with some concern, by many of the investors and asset managers, several of them grumbling about the limited amount of liquid refreshment available to slake a healthy thirst worked up in the searing Monaco sun.
Journalists have not needed to persecute and cajole hedge fund executives into handing over their business cards at GAIM this year, a sharp contrast to conferences in less troubled times.
At past GAIMs, or the Global Alternative Investment Management conferences, certain hedgies went to great lengths to duck journalists, and many even expressed concern or irritation that journalists were allowed in at all.
A last-minute addition to the line-up in Monaco has been GLG’s senior managing director Pierre Lagrange, a relatively low profile figure even though the firm is listed on the New York stock exchange. Lagrange was not on the conference’s original programme and only agreed last week to speak on “the pros and cons of running an alternative asset management business as a public company” today.
GLG has had its share of troubles in the past, including the Philippe Jabre scandal, last year’s departure of star manager Greg Coffey and a hefty chunk of investor redemptions. Perhaps Lagrange is taking on a more public role as the firm now feels it has a more upbeat story to tell. Having pulled off a number of hirings and the acqusition of the UK fund management unit of Societe Generale, the firm said this month that its hedge funds had risen 11.2 percent in the five months to May 31. Meanwhile, expansion into the U.S., Asia and the Middle East is also planned.
But one means that shows quite how drastic the change has been is in the area of risk management — not normally the sexiest topic but now an area of real concern for investors.
It is not really such a surprise, and not only because the attendee list was visibly shorter this year than in 2008. Of the around 800 registered visitors, perhaps 500 have turned up.
Growing up can be a painful experience for teeangers with many battles and excesses along the way.