Money managers under the microscope
We hear German hedge fund K1 and its boss Helmut Kiener have attracted the attention of prosecutors, so it’s worth dipping into the hedge fund performance numbers to see what all the fuss is about.
Below is a chart from the K1 website showing the serene progress of Kiener’s “K1 Fund Allocation System” until the financial crisis sparked an unprecedented wobble that was quickly righted. The total return since inception though, is still comfortably above 800 percent.
Lipper data show the fund is up 2.04 percent over the three-months to end-September, up 7.49 percent over six months and up 10.85 percent over the last 12 months. Nothing spectacular, but consistently outpeforming other hedge funds in Lipper’s multi-strategy benchmark.
Allocations are also listed on the website, and show a 25.6 pct exposure to Equity Hedged strategies, 24.3 pct to Relative Value, 18.5 pct to Event Driven and 17 pct in funds of funds.
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Hedge fund compensation; New funds, new tricks – Seeking Alpha
Hedge funds gain in August – Reuters
Alpha advertising - FT Alphaville
For many money managers who bet exclusively that securities will fall, July may go down in history as their personal Waterloo — .
When performance data is announced in the next few days, the numbers will show high single-digit or even double-digit losses at so-called dedicated short-sellers, industry analysts and investors forecast.
There has been plenty of bad news surrounding Man Group in recent months.
Assets at end-June were $43.3 bln, compared with $79.5 bln a year before. Flagship managed futures strategy AHL, which not so long ago was boasting some superb-looking performance figures in spite of the credit crisis, is down 5.1 percent over the past year after a poor first half of 2009.
And Man Group’s shares have underperformed the market by 44 percent over the past year, though they have outperformed during 2009.
Puccini’s tragic opera Tosca ends with the heroine, realising she has been tricked by the evil Baron Scarpia and that her lover has been executed, hurling herself to her death from a castle parapet in despair.
However, despite last year’s tragic performance — an approximately 60 percent plunge in the flagship fund after holdings such as Redrow and Taylor Wimpey fell sharply — it would seem Martin Hughes has sidestepped such an unhappy ending at Toscafund, where redemptions have tailed off and fund performance is strong once again.
The challenges of volatile markets and client redemptions are finally driving the consolidation in the hedge fund sector that some commentators have been expecting.
Yesterday it was announced that hedge fund firm Cheyne Capital would buy fund of hedge funds firm Altedge Capital, a smaller boutique, and appoint Altedge CEO and CIO Chris Goekjian as partner and CIO.
It’s encouraging to see that, even as many hedge fund investors rush for the exit, there is still some appetite to invest, as highlighted by the National Association of Pension Funds’ optimistic publication of a beginner’s guide to the industry.
Entitled Hedge Funds made simple and starting with “What is a Hedge Fund”, the guide’s blurb tells us that ”the role of hedge funds, and investing in them, has become more prominent in the last year”.
Spanish bank BBVA’s move to close down its alternative investment arms including hedge funds shows just how much things have changed in the industry, even within the past year.