Money managers under the microscope
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Fund manager pleads guilty in Ponzi case – Chicago Tribune
Frontier backs synthetic over single hedge funds – FTAdviser
Stocks may have enjoyed a huge rebound this year (the S&P 500 is up 50 pct from its March low), but the rally is based on speculation, according to one hedge fund firm.
Some good news for the bulls.
Octopus fund manager David Crawford believes this year’s equity rally could lift the FTSE 100 to the 5,000 mark, from just over 4,600 currently, helped by energy stocks.
The call backs up that from hedge fund manager Crispin Odey, who earlier this year pointed to the start of a new bull market and then recently said there is “every reason to be hopeful that a major correction will not happen before September”.
2008 may have been the year of shorting imperilled financials, but 2009 could be the year of shorting companies with too much debt or those bearing the brunt of the recession.
Numbers from Dataexplorers show Consumer Discretionary and Industrials are among the sectors with the most stock out on loan in the UK– a good indicator of short-selling activity.
May was a bumper month for the battered hedge fund industry with an impressive 5.23 percent return, the best monthly gain in almost a decade.
The data, from Hedge Fund Research, takes returns for the first five months of the year to 9.43 percent. After last year’s record losses, this is a much healthier figure and more reminiscent of the returns during the industry’s boom years such as 1999 or 2003.
Big-hitters Crispin Odey and Anthony Bolton may have pointed to the start of a new bull market, but not all hedge fund managers are convinced.
A report from Credit Suisse/Tremont, published today, says many managers played it safe in April, meaning funds made an average gain of just 1.68 percent, compared with a 9.57 percent rally in the S&P 500.
Plenty of fund managers have been predicting a rally in stock markets after the sharp drops seen last year and early this year, but most have expected it to be no more than a bear market rally.
However Crispin Odey, one of the UK’s best known hedge fund managers with a pay packet to match, has stuck his head above the parapet and said he thinks the recent rebound in stock markets could be the start of the next bull market.
But one top hedge fund manager believes that equities could soon be heading for a very sharp rally.
Cazenove’s Neil Pegrum — whose fund made 9.4 percent last year while markets were plummeting — believes UK equities could soon be enjoying a “March 2003″ rally.