DealZone

from Funds Hub:

Relocation, relocation

It would appear that where to live is the hot topic for hedge fund managers at the moment.

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Star manager Crispin Odey of Odey Asset Management is "seriously considering leaving" the UK over higher taxes, the Sunday Times reported, while Krom River moved to Zug from London for lower tax and a better lifestyle, the Financial Times reported last year.

But there is traffic into London too.

Last month Hedge Hub reported that Auckland-based 36 South's founder Jerry Haworth was moving to London to be closer to investors, who are now keen to do as much due diligence as possible in the wake of the Madoff fraud -- but are not always able to fly to New Zealand.

Now Anthony Limbrick, chairman and CIO of New Zealand's Pure Capital, tells me his firm will also be expanding its London operations and is likely to shift the balance of the company there eventually, although he will retain his New Zealand base.

Moreover, as head of an association of New Zealand hedge funds, he says other Kiwi firms are considering such a move.

from Funds Hub:

Through a glass darkly

The fund of hedge funds concept took a serious knock last year with Bernard Madoff's $65 billion fraud, leading high net worth investors to pull out money over concerns that the due diligence hadn't been quite as diligent as one would hope.

Even managers who weren't exposed to Madoff had to calm client fears. This has prompted the bigger, more institutional groups to seek ways of gaining more control over assets that the underlying managers are running.

scrutiniseGoldman Sachs Asset Management (GSAM) is currently building out its separate account platform with the aims of improving hedge fund transparency and ensuring that hedge fund managers' interests are properly aligned with those of their clients. "It gives you much greater leeway to shape the investment guidelines and terms," says Charles Baillie, co-head of alternative investments and manager selection at GSAM, who oversees some $19 billion in hedge fund assets.

from Funds Hub:

Staying positive

rtr23yfeThere seems to be an endless wave of bad news hitting the hedge fund industry at the moment -- gates and suspensions, record poor performance, the Bernard Madoff scandal and so forth -- but there are still one or two reasons to be positive.

According to a survey of institutional investors by alternative assets data group Preqin, conducted in January (and therefore after the alleged Madoff fraud came to light), only 8 percent said they were no longer confident about hedge funds and would reduce investments.

By contrast, 26 percent said they would be increasing their allocations this year.

from Funds Hub:

After the storm

stormThe latest update on funds of hedge funds (FoHFs) performance arrives from Fitch Ratings -- and it makes for an unsurprisingly sober read.

We perhaps know already that 2008 was the worst year ever for FoHFs, and that cumulative losses reached an all-time high as the year ended with a Madoff-shaped bang. Fitch also raises a fear that managers have shared after imposing redemption restrictions on clients wanting to stash their cash under the proverbial mattress:

The year has witnessed a wave of managers implementing restraints on clients’ access to their assets, thus putting again into question the business and sales model of the industry