Unstructured Finance

Weathering the storm

Interesting to see two fund firms still winning new business, in spite of recent market turbulence.

Both Polar Capital and BlueBay reported roughly $300 mln of net inflows in the last quarter, showing that despite a sharp sell-off in markets, there is still demand out there.

However, BlueBay’s figures show demand could be slowing down rapidly — the inflows are less than a tenth of the levels seen in each of the past four quarters.

Industry data for Q2 will give us a much better picture of how the industry is faring. In the meantime the message seems to be that clients are still buying funds but they’re getting nervous.

Thaw continues at Polar

Polar Capital, with co-founder Tim Woolley now at the helm again, delivered a solid set of numbers this morning, adding to growing evidence that clients are coming back to hedge funds, albeit slowly. RTR26D2G

REUTERS/Bob Strong

Having more than halved in the year to March, Polar’s assets edged upagain to $2 bln, from $1.9 billion at end-Sept and $1.5 bln in March.

Rising markets have undoubtedly helped. Performance and currency movements over the six months to Sept added $366 mln, much of which was from long-only funds.

Madoff shadow looms over UBP

MadoffWhile much of the hedge fund industry starts to draw breath and consider better times ahead, those firms tainted by the Bernard Madoff ponzi scheme continue to suffer.

UBP — which had exposure of about 1 billion Swiss francs to Madoff’s firm — on Wednesday said hedge fund assets had slumped by 20 billion Swiss francs in the first half and are now more than half the level achieved at the peak in June 2008. To be fair, the private bank isn’t giving up easily and has hired in new managers to liven up its offering.

In the UK, the Bramdean investment firm managed by Nicola Horlick is still battling to resolve a row over its future strategy sparked by a 10 percent exposure to Madoff.

Safe approach pays well for RAB

RAB Capital’s results this morning — showing an expected 32 percent fall in assets but signs of net inflows into its single-strategy hedge funds — also reveal how its managers are positioning their portfolios.

rtx5jedDespite a further 5 percent performance loss year-to-date at Special Situations, after last year’s big losses, performance at RAB’s other funds has been strong — the Energy fund is up 55 pct, the Global Mining fund 42 pct, the Gold and European Credit Opportunities funds 20 pct in H1.

Rising commodity prices have helped, as has an easing of the illiquid markets in which Special Situations found itself caught last year.