Money managers under the microscope
Further signs that, for those with cash to invest, there could be some great opportunities to invest in hedge funds.
Man Group’s RMF Global Emerging Managers portfolio has invested $50 million in 5:15 Capital Management’s* flagship fund and says the opportunity set has never been better.
The reason, according to Hans Hurschler, head of hedge fund ventures at Man, is twofold.
Firstly, many speculators such as hedge funds and bank prop trading desks have simply been wiped out or seen their firepower curtailed as a result of the credit crisis. This means less competition for those remaining funds.
Funds of hedge funds have had a tough time recently.
Losses of 21.37 percent last year helped persuade clients to withdraw a net $50 bln in the fourth quarter and a further $85 billion in the first quarter of this year, according to HFR.
Funds of funds weren’t helped either by the speed with which private clients — who often hold these portfolios rather than the underlying fund – pulled out of the asset class.
A year ago in its final results Man Group – the world’s biggest listed hedge fund firm — was able to report assets under management of $78.5 billion and a 60 percent rise in profits.
The firm’s shares took a pounding this morning, although have since made up some ground, after the firm revealed assets are now down to $44 billion, while profits almost halved.
Today’s update by S&P Fund Services on its ratings for seven funds with exposure to Bernard Madoff’s fraud shows just what a blow to the fund of hedge funds industry the scandal has been.
S&P said that five funds of hedge funds that invested in Madoff and whose ratings it placed under review in December when the scandal broke have now been downgraded to “not rated” — Bonhote Alternative Multi-Arbitrage, DGC Pendulum, Dinvest Concentrated Opportunities, Dinvest Total Return and RMF Four Seasons.