Alternative Market Briefing

Hedge Funds in Crisis – Hedge funds under fire for not spotting market rally, Six exit UK hedge fund firm NewSmith in cost cuts

Wednesday, May 20, 2009

Hedge funds under fire for not spotting market rally From Guardian.co.uk: … Investors asked for nearly $104bn (£68bn) back from hedge funds in the first quarter of the year, or about 7.4% of the industry's assets, according to data from Hedge Fund Research. This leaves the industry with almost half of the $2tn of assets it managed at the peak of the market in 2007.

Investors withdrew most money from equity funds, many of which have failed to capitalise on the soaring stockmarket. On average these funds gained 2.7% in March, and 5.7% in April. However, this lags behind recent rallies in equity markets: the FTSE100 has gained more than 20% since 9 March – when the markets bottomed – while the Dow Jones European Equity Index has soared by more than 30% over the same period.

Industry experts defended the performance, arguing it is virtually impossible to time the bottom with precision. ...

One reason for the underperformance is that big hedge funds, mostly based in London and the US, are keeping much of their money in cash, fearing the rush of redemption requests from investors may not be over… Full article: Source

Six exit UK hedge fund firm NewSmith in cost cuts From Reuters.com: NewSmith Capital Partners, one of the hedge fund firms to appear before a parliamentary committee investigating the UK banking crisis in January, has ......................

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