Funds Hub

Money managers under the microscope

2009 – an annus mirabilis?

There is already hard data out from HFR showing hedge funds received net inflows of $1.1 bln in Q3 (small, but nevertheless a relief after $330 bln of net outflows in the year to June). Hedge funds suffered their own annus horribilis in 2008. REUTERS/Reuters Photographer.

Hedge funds suffered their own annus horribilis in 2008. REUTERS/Reuters Photographer.

However, anecdotal evidence suggest it has picked up much more strongly in Q4, helped, no doubt, by gains of 17.53 pct so far this year, according to Credit Suisse/Tremont.

An interview with GlobeOp CEO Hans Hufschmid (incidentally a former LTCM partner) yesterday revealed gross and net inflows and outflows had all returned to pre-crisis average levels. (GlobeOp should know — it has $106 bln of client assets, mostly hedge funds, under administration).

What a difference a year makes

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Last year’s record poor year for the hedge fund industry was a boom period for managed futures.

rtxc6vaMonths of falling equity prices, plus a first half of rising oil prices followed by a second half of falling oil prices provided some great trends for these computer-driven funds to follow.

Time to crack open the champagne?

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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.

rtr244m8The 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.

Madoff Junkies

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Bernard MadoffOne of the more striking aspects about the Madoff affair is the large number of people who appear to have been ‘hooked’ on Madoff products.

 

Money managers were drawn by Madoff’s air of mystique, his stellar reputation as a market timer, the apparently steady returns with rock bottom volatility and the absence of fees, which some collected from clients anyway.

Managing for the future

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One thing that the credit crisis has demonstrated is that even performing well isn’t always enough to stop investors in need of cash from taking their money out of a hedge fund.

rtr5afThe industry had its worst year on record last year, losing nearly 20 percent in performance terms, but not everyone lost money.

Going global

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rtr1u4b7Global macro and managed futures (CTAs) are still where it’s at, it seems, when it comes to funds of hedge funds.

Nigel Davies’ poll of portfolio managers shows these are the two strategies they are expecting above average returns from in the first half of 2009.

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