By Benedicte Gravrand, Opalesque London: A roundup of last week’s hedge fund launches, closures, index performance, trends, regulatory, legal and financial events pertaining to the alternative investments world.

Last week, we heard of fund launches from Value Partners, Craigmillar, Paskewitz, Armada Capital, Cogo Wolf, Putnam, Ferox and Brian Pinsker.

And we heard of fund closures from RiverSource, Derivative Consulting, Lyxor, Artemis, Parkcentral and Bluebay. Polygon said it would reactivate its shut funds next year.

Empirical Research Partners said that redemptions from hedge funds and mutual funds would total $1tln in 2008; a Sanford C. Bernstein survey found that hedge funds might sell $200bln more of assets; and a HFM survey reported a hedge fund assets drop of 5% in six months.

More hedge funds faced negative circumstances: Millennium, Ciano, Jana, New Star, Dexion, Polygon, Man Group, Ramius, Sparx, Gottex, Allianz, Satellite A.M., and several Australian FoHFs. Also risk arbitrage funds which had BCE positions, and merger arbitrage funds which had bet on BHP Billion’s possible takeover of Rio Tinto, were said to be negatively affected.

It was reported that HFs had reduced net equity holdings from 47% last year to 17% (Goldman Sachs); hedge funds had slashed leverage in early 2008 (FSA); the credit crisis had hit listed hedge funds as they were trading at less than their net asset value; bulging side pockets would turn hedge funds into private equity funds; hedge funds were steering clear of currency hedging. A EDHEC survey revealed hedge fund clones were getting mixed reviews. AIMA chairman Christopher Fawcett defended misunderstood hedge funds.

The following trends and observations were noted: by controlling redemptions, hedge funds might force permanent change in fee levels; some hedge funds had become private to the point of paranoia (following SRM Global’ lawsuit against the Wall Street Journal for disclosure); LatAm and Asia debt was touted by emerging market fund managers.

Following Sandra Manzke’ letter to investors, veteran Peter Douglas noted that it might not be representative. New Jersey's pension fund was under fire over a series of hedge-fund investments after a loss of more than $20bln.

Hedge Funds Review gave out 18 awards at its 2008 European FoHFs awards ceremony.

It was reported that financial crisis was far from over as a new mortgage crisis loomed.

The U.S. govt agreed to rescue Citigroup, with plans to inject $20bln and guarantee $306bln in toxic assets; Citi’s share prices and Wall Street soared after the rescue. Pandit blamed the bank’s troubles to an over-concentration in property and trading.

Citigroup ended a technology support service offered to start-up hedge funds and Barclays was said to eliminate 30% of U.S. hedge-fund service jobs.

AIG said it would not issue 2008 bonuses for top executives; Wachovia executives might get $98.1m severance after the bank is acquired by Wells Fargo; Goldman is to sell $2bln in FDIC-backed bonds; Standard Chartered talked of plans of a GBP1.8bln rights issue; Santander was expected to announce a $9.3bln rights issue; Ackermann announced that Deutsche Bank would overhaul as the bank had reached one-third of its book value; Sigma SIV fund assets are to be sold, with its creditors facing total loss.

Three hedge funds, GLG, Ramius Capital and Oceanwood, joined the Lehman creditor committee. Four other US hedge funds were reported to be in a Lehman ......................

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