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Opalesque Exclusive: As October hedge fund indices point to devastating month, CTAs tantalize as a lone bright spot

From Kirsten Bischoff, Opalesque New York: Late last week the release of the HFRX indices (Global Hedge Fund Index reported -9.26%) confirmed fears that October was even more devastating to hedge fund returns than the previous month. With the other major indices yet to issue finalized numbers the lone bright spot seems as though it may continue to be CTAs. With more than half of the funds reporting October returns Barclay's CTA Index estimate is +3.37% and +10.69% YTD, a ray of light below Barclay's Hedge Fund Index estimate for October (which currently stands at -6.85% and -18.26%YTD with 1023 funds reporting).

US-based Drury Capital offers five trading programs. The firm's Diversified Trend Following Program manages $153m in assets and returned +23.49% in October (+56.91% YTD). President and CEO Bernard Drury recently spoke with Opalesque about CTAs and systematic trading strategies.

Drury credits both the diversified space in which the program trades (across 70 markets with half the portfolio exposure in commodities and the other half in financial instruments) as well as the strategy (systematic trend following) for a track record that extends back to 1997 and boasts annualized returns of +15.54%.

The evolution from sector specialist to systematic trading
As a former grain trader who began his career at the Louis Dreyfus Corporation, Drury spent 20 years accumulating expertise in the fundamentals of the grain markets and has great respect for those traders who are sector specialists. However, while pursuing an executive MBA at the University of Chicago, his studies with Prof. Robin Hogarth in the area of decision making amidst uncertainty had a strong influence on him.

"I entered that U of Chicago program as a grain trader, but I already was accustomed to creating and applying econometric models to evaluate grain pricing situations. The studies with Prof. Hogarth increased my curiosity about the ways in which models, or expert systems, could be applied to situations such as trading." Having formed Drury Capital in 1993, he spent the next 4 years trading grains as a model-based fundamental trader, and researching what eventually became the Diversified Trend Following Program, which the firm launched in 1997. "I made the decision that I would give up the use of my experience as a sector specialist in favor of adopting a systematic approach in which the most important benefits are the application of very extensive research, consistency of method, and diversification.

"For example, if we are curious about a trading rule, we run a simulation across the portfolio of about 70 instruments and 15 years of data. That would be about 250,000 days in the market. If we run a simulation on 3 or 4 systems together, then we get an even more robust result. This type of research provides some benefits that are difficult for a discretionary trader to have. Our ability to conduct research such as this is dependent upon proprietary software that has been years in development, and of course upon our excellent research team.

In any event, I think it can be very difficult for a sector specialist to take advantage of the infrequent but very important price moves that may occur in a given sector. Often, I think, a sector specialist is adept at profiting from more discreet moves such as inter- and intra-market spreads, and that technical systems are better at dealing with the major outright price moves. At least that has been my experience."... Corporate website: Source

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Launches - Sciens plans $1bln hybrid private equity/hedge fund, Skandia takes alternative investments fund to Sweden, ING launches MENA fund amid predicted gloom

Sciens plans $1bln hybrid private equity/hedge fund
From PEnews.com: US-based alternative investments firm Sciens Capital Management is targeting about $1bn (EUR780.2m) for its first hybrid private equity and hedge fund... Full article: Source

Skandia takes alternative investments fund to Sweden
From Citywire.co.uk: Skandia Investment Group (SIG) is today launching an 'alternative investments' multi-manager fund in Sweden, it has been announced... Full article: Source

ING launches MENA fund amid predicted gloom
From efinancialnews.com: ING Investment Management has launched a fund targeting investments in the Middle East and North Africa in the wake of new research that suggests the region is facing a collapse similar to the financial turmoil suffered by western and emerging market economies this year... Full article: Source

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Opalesque Exclusive: Global macro fund Constellation Capital returns 2.18% in October, 10.91% since May inception

From the Opalesque team: Constellation Capital Ltd has returned 2.18% in October, 10.91% YTD. The strategy is Systematic Global Macro. The fund combines a systematic approach with a discretionary overlay and invests only in liquid instruments to achieve its strategy. It is domiciled in the Caymans, was launched six months ago, and currently manages $22m.

Barthélemy Helg, managing partner at Constellation, told Opalesque in an email communication: "We want to stress that volatility is an important component of the current market environment and we believe that our investment strategy positions us well to capitalize on such a constellation."

Constellation Capital Advisors AG is based in Pfaeffikon, Switzerland. Contact: bh@const-capital.com No online Source

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GLG - GLG to freeze assets in European Long-Short Fund, GLG posts $167.1m loss for 3Q08 and -$487m YTD, half of 3Q losses attributed to redemptions, GLG attracts approaches from potential investors, Gottesman `cautiously optimistic`

GLG to freeze assets in European Long-Short Fund
From Bloomberg.com: GLG Partners Inc. limited client withdrawals from the $2.9 billion GLG European Long-Short Fund so it isn't forced to sell selected investments that have tumbled in price, people familiar with the matter said.

The fund, the London-based firm's largest, segregated the securities in an account called a side-pocket, where it plans to hold them until values recover. Investors' redemption requests will be reduced because the fund has fewer assets available for sale to raise cash... Full article: Source

GLG posts $167.1m loss for 3Q08 and -$487m YTD, half of 3Q losses attributed to redemptions
From WSJ.com: GLG Partners Inc. Monday posted a $167.1 million net loss for the quarter ended Sept. 30, stating that it had been a challenging period for the business. The asset manager has also posted a loss of $487 million for the first nine months of fiscal 2008. It reported a net profit of $29 million in the year-ago quarter and a profit of about $168 million for the first nine months of fiscal 2007.

GLG's net assets under management as of Sept. 30 were $17.3 billion, down 15.6% from a year earlier and off 27% from June 30, 2008. The company said the decline in net AUM over the course of the three months was roughly one-half performance driven, with the remaining portion due to $1.3 billion of redemptions from the Emerging Market Funds, $900 million of redemptions in other GLG Funds and $1.1 billion from the impact of the dollar strengthening... Full article: Source

GLG attracts approaches from potential investors, Gottesman `cautiously optimistic`
From FT.com: GLG Partners, the New York-listed hedge fund group, said it had had a "relatively good number" of approaches from sovereign wealth funds, institutions and family offices, considering investing both in the group and in its funds.

As the group outlined a 27 per cent drop in assets in the three months to September, amid a sharp downturn across the hedge fund industry, Noam Gottesman, chairman and co-chief executive, said he was "cautiously optimistic" he would announce a deal by the end of the year... Full article: Source

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Performance - SAC Capital plunges 11% in October, -18% YTD

From Finalternatives.com: Hard times are hitting SAC Capital Advisors, and the hedge fund giant is tightening its belt. Greenwich, Conn.-based SAC plunged 11% last month, leaving it down 18% this year, and leading founder Steven Cohen to liquidate half of the firm's equity holdings last month... Full article: Source

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Hedge funds in crisis - Lehman insolvency bites Augustus hedge fund, Florin fund closure sparks fears that fleeing investors will shut down half of Russian hedge funds, Pension fund investor says half of hedge funds will not survive

Lehman insolvency bites Augustus hedge fund
From efinancialnews.com: Augustus Asset Managers has become the second hedge fund manager in a week that has been forced to react to problems caused by the collapse of Lehman Brothers, after delaying investors from exiting or buying into an emerging market portfolio until it segregates assets frozen by the bankruptcy of the US bank... Full article: Source

Florin fund closure sparks fears that fleeing investors will shut down half of Russian hedge funds
From Wealth-Bulletin.com: The closure of a Russian hedge fund run by Florin Investment Management has led to fears many more could go under as investors flee emerging markets. It is estimated about 70 hedge funds are operating in Russia and the Commonwealth of Independent States and analysts predict over half will be wiped out by next year.

The closure of Florin FSU Credit Opportunities Fund, which was invested in real estate and equity collateralised debt, led to 10 lay-offs at the firm in Moscow and London. Florin's principals Neil Smith and Aidan Freyne are hoping to buy the fund's architecture from its shareholders at Trust Capital and relaunch the fund as a distressed assets vehicle. Smith was previously head of alternative investments at the UK's Morley Fund Management while Freyne spent 19 years with Salomon Brothers and subsequently Citigroup... Full article: Source

Opalesque Note: The impact and outlook of the current crisis for Russia has also been discussed in our most recent Roundtable Script: Source

Pension fund investor says half of hedge funds will not survive
From Finalternatives.com: In one of the more pessimistic portraits of the future of the hedge fund industry, one pension fund investor predicts that half of hedge funds are headed for extinction.

Peter Carey, senior investment officer for alternatives at the $153 billion New York State Common Retirement Fund, says the industry will shrink by as much as 50%, but what's left of it will present investors with a host of new opportunities... Full article: Source

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Indices - Greenwich Global Hedge Fund Index show hedge funds decline marginally in comparison with global equity returns

Greenwich Global Hedge Fund Index show hedge funds decline marginally in comparison with global equity returns
Hedge funds as measured by both the Greenwich Global Hedge Fund Index ("GGHFI") and the Greenwich Composite Investable Index ("GI2") declined marginally when compared with global equity returns during the month of October. The GGHFI and GI2 posted declines of -5.06% and -8.53% on the month compared to global equity returns in the S&P 500 Total Return (-16.79%), MSCI World Equity (-19.05%), and FTSE 100 (-10.71%) equity indices. Year-to-date, the GGHFI and the GI2 have shed -14.29% and -16.60%, while the S&P 500 Total Return, MSCI World Equity, and FTSE 100 Indices have lost -32.84%, -39.75%, and -32.21%, correspondingly. 36% of constituent funds in the GGHFI ended the month with gains.

"October's returns are the result of similar market conditions that impacted hedge funds in September. Although long/short equity funds were notably lower, other event driven and arbitrage funds that trade in more illiquid securities were also negatively affected due to redemptions and forced selling. " notes Margaret Gilbert, Managing Director... Corporate website: Source

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The largest hedge funds have proven not to be the best, but the safest

From Wealth-Bulletin.com: Big may not always be better, but for investors in 18 of the world's largest hedge fund managers whose flagship funds have made money this year, it has proved safer. True, some of the gains by the largest managers have been meagre - Cerberus International and Millennium International Fund made just 0.1% to September 30 - and those losing money far outnumber those making it.

However, an investor document seen by Financial News shows some groups, such as BlueCrest Capital Management and Paulson, made at least 15% on their flagships to September 30. Nicola Ralston, co-founder of investment consultants PiRho Investment Consulting, said asset size was no fail-safe protection against investment losses: "Just because you're with a big name doesn't mean you're any more protected in terms of returns," she said. However, the star funds at BlueCrest, Paulson, York Capital Management and Brevan Howard Asset Management all made double-digit returns... Full article: Source

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Banks face 50% drop in hedge fund fees, Exchanges slide as investors worry about volumes and curtailed hedge fund activity

Banks face 50% drop in hedge fund fees
From Wealth-Bulletin.com: The decline in the hedge fund industry will wipe out tens of billions of dollars in fees they pay to investment banks next year, forcing banks to make further staff cuts and shift their focus to less lucrative customers.

The closure of hedge funds, withdrawals by investors and deleveraging in the hedge fund industry, which has gathered pace over the past six weeks, has started to have an impact on sales and trading and prime brokerage revenues, the two major areas where hedge funds pay fees and commissions to banks... Full article: Source

Exchanges slide as investors worry about volumes and curtailed hedge fund activity
From AP/CNBC.com: Operators of stock and commodity exchanges declined Monday as investors worried that a weak economy and a drop in demand from professional traders would damp trading volumes and profits. Exchange operator CME Group Inc., which reported last week that its October trading volume rose 13 percent, fell $26.12, or 9.7 percent, to $242.93. The company is the parent of the Chicago Mercantile Exchange and the Chicago Board of Trade as well as the New York Mercantile Exchange, which it acquired in August...

Deutsche Bank Securities analyst Rob Rutschow said investors are nervous about weak trading activity hurting profits. Specifically, he said, they are worried that difficulties among hedge funds will curtail their activity... Full article: Source

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Trends - Battered convertibles lure brave hedge funds

From Reuters.com: Bolder hedge funds are looking to snap up convertible bonds at bargain prices, returning to an asset class that became a no-go area for them only a short while ago. The convertible bond market has tumbled 44.5 percent since September, as hedge funds facing a wave of client redemptions paid back bank debt. Many said convertible arbitrage strategies were a thing of the past. But yields are now reaching all-time highs and are starting to attract the first daring hedge funds back to the investment arena they traditionally dominated.

"You can buy a convertible right now on a 25 percent discount to the same bond issued by the same company," Emmanuel Roman of GLG Partners, one of Europe's biggest hedge funds, told a recent conference. "You get a 25 percent discount plus a call option. That doesn't make any sense," he said. The market has recovered by 1.81 percent since the September drop, according to the HFRX convertible arbitrage index... Full article: Source

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M&A - Standard Chartered buys Lehman unit in Brazil

From AP/Yahoo.com: British-based emerging markets bank Standard Chartered said Monday that it has agreed to buy the Brazilian activities of failed US investment bank Lehman Brothers for an undisclosed amount. "Standard Chartered announces that its local subsidiary in Brazil has entered into an agreement to acquire a specialist team and some fixed assets from Lehman Brothers Brazil," the British group said in a statement... Full article: Source

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Credit Crunch - Santander launches GBP5.88bln rights issue, Fannie Mae posts record $29bln loss, Fannie Mae may tap government cash to avoid liquidation, Bailout fund needs money, US Fed approves American Express as bank holding company, able to secure funds from deposits, Hennessee Group advising hedge fund clients, Fed moves setting stage for crisis of inflation on horizon for 2010 and 2011, Swedish government takes over largest investment bank Carnegie

Santander launches GBP5.88bln rights issue
From Citywire.co.uk: Spanish banking giant Santander - which owns Abbey, Alliance & Leicester and Bradford & Bingley's savings business - has bowed to pressure and agreed to raise around GBP5,88 billion (EUR7.2 billion) by selling new shares in a bid to shore up its capital ratio... Full article: Source

Fannie Mae posts record $29bln loss
From Reuters.com: Fannie Mae, the largest provider of funding for U.S. residential mortgages, on Monday said it lost a record $29 billion (18.4 billion pounds) in the third quarter as the company wrote down a tax-related asset that has its buoyed capital.

The quarterly loss is the fifth consecutive for the Washington-based mortgage finance company that has been operating under a government conservatorship since September. Fannie Mae in October warned it would write down "substantially all" of its deferred tax assets, which had become a controversial addition to capital as losses mounted... Full article: Source

Fannie Mae may tap government cash to avoid liquidation
From Reuters.com: Just three months after the U.S. government took over Fannie Mae, the biggest source of housing finance may need an infusion of fresh capital to stay in business. Unfortunately for the American taxpayer, the Treasury may be forced to pump up to $100 billion to stop the company from swinging from the "conservatorship" status it acquired when the government took control of the company and its rival Freddie Mac to a "receivership" situation that would involve selling off assets to pay creditors... Full article: Source

Bailout fund needs money
From WSJ.com: The U.S. Treasury Department's new plan to inject capital into American International Group puts the department steps closer to having to ask Congress for access to its remaining $350 billion in bailout funds. The expanded AIG rescue comes as some lawmakers take an increasingly sceptical eye about the massive government bailout and how Treasury uses these funds to try to stabilize the U.S. economy. The move also raises further questions about what other firms Treasury might funnel cash to amid the economic crisis...

To access the remaining $350 billion, Treasury officials would have to win over lawmakers on Capitol Hill. And given that the funds immediately available seem to be dwindling fast, they might have to turn to Congress before President-elect Barack Obama takes office on Jan. 20. In that case, President George W. Bush would need to send Congress a written report. Congress has 15 days to object... Full article: Source

US Fed approves American Express as bank holding company, able to secure funds from deposits
From Reuters.com: The Federal Reserve Board has approved an application by American Express Co to become a bank holding company, the central bank said on Monday. The move will allow the U.S. fourth largest credit card company to secure funds from deposits, which can be cheaper than borrowing in bond markets. Last month, American Express said it would cut 7,000 jobs, slash expenses and scale back investments to save $1.8 billion next year, in its biggest restructuring since 2001, as it struggles with bad loans and surging funding costs... Full article: Source

Hennessee Group advising hedge fund clients, Fed moves setting stage for crisis of inflation on horizon for 2010 and 2011
Hennessee Group LLC, an adviser to hedge fund investors, is consulting its clients on actions to take in the next five years for asset classes including hedge funds, bonds and precious metals. The Hennessee Group believes that while the Fed and Treasury are taking the necessary actions to remedy the current credit crisis and mitigate the risk of the worst recession in history, these actions have longer term collateral consequences.

The stage is being set for a high inflationary period beginning the next three years. Charles Gradante, Co-Founder of the Hennessee Group, stated "a hyperinflationary period could be the next crisis on the horizon beginning in 2010 or 2011." He further stated, "If the money supply continues to grow at its current pace, we could see inflationary levels similar to those experienced in the 1970's once the current credit crisis begins to subside." Specifically, Gradante believes money supply growth (M2) will exceed 12% in 2009, rivaling money supply growth of the 1970's... Corporate website: Source

Swedish government takes over largest investment bank Carnegie
From FT Alphaville: Carnegie, the Nordic region's oldest and largest investment bank, was taken over by the Swedish government on Monday after its licence was revoked for failures in its internal controls, becoming the first Swedish bank to collapse in the current financial crisis and the first to be taken over since the country's banking crisis of the early 1990s. It is now likely to be broken up and sold... Full article: Source

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Legal - Lawyers prepare for battle over bonuses for former investment bank staffers, UBS turns over 70 client names to U.S. government: paper

Lawyers prepare for battle over bonuses for former investment bank staffers
From Wealth-Bulletin.com: Investment banks that fail to consider staff who lose their jobs this year for a pro rata bonus may face litigation, as the industry prepares for further cuts, according to lawyers. The majority of bonuses are not guaranteed and are instead at the discretion of employers, but the inconsistency of approach among different banks could help those claimants who try to claw back some portion of their bonus... Full article: Source

UBS turns over 70 client names to U.S. government: paper
From Reuters/Yahoo.com: UBS AG, the world's largest bank to the rich, has passed on information about 70 clients to U.S. authorities investigating tax evasion, a move that may undermine Switzerland's prized bank secrecy, the Washington Post reported.

UBS was responding to a Justice Department request for information on Americans who held "undeclared" accounts at the bank in Switzerland, the U.S. paper said on its website, citing an unnamed source close to the case. A UBS spokesman said the Swiss bank had not passed on information about Swiss-based clients to the United States... Full article: Source

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Regulatory - Senator Schumer says more financial regulation a must

From IDDMagazine.com: The next Congress will make overhauling the financial regulatory system one of its first priorities, Sen. Charles Schumer told financial executives Monday. The changes will seek to fix an outdated system that allowed many financial institutions and financial products to go unregulated, which helped lead to the excess risk-taking that has played a part in the current crisis, Schumer, D-N.Y., said at a Securities Industries and Financial Markets Association conference on the Treasury Department's $700 million Troubled Asset Relief Program... Full article: Source

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People - Mizuho said to hire ex-Lehman electronic trading team to target hedge funds for equities trading, Michael Coleman appointed AIMA Singapore Chairman, BNY Mellon Asset Management hires Jeffrey Saef from Fidelity unit Pyramis, Julius Baer says Wittman to step down as head of investment products, Newton Investment Management appoints two senior investment research analysts

Mizuho said to hire ex-Lehman electronic trading team to target hedge funds for equities trading
From Bloomberg.com: Mizuho Financial Group Inc., Japan's second-largest bank by revenue, will start electronic trading in Asia after hiring a team of 16 former Lehman Brothers Holdings Inc. employees, two executives familiar with the plan said.

The team, led by Anthony Brooker, the former head of electronic trading sales for Lehman in Asia, will target hedge funds and institutional investors with electronic products and systems for equities trading, the executives said. They declined to be identified as the plan isn't public... Full article: Source

Michael Coleman appointed AIMA Singapore Chairman
From HedgeFundsClub.com: Michael Coleman, managing director of Aisling Analytics, has been elected as the new chairman of AIMA Singapore. He succeeds Peter Douglas of GFIA in this role... Full article: Source

Opalesque Note: Both Michael Coleman and Peter Douglas were participants in the Opalesque Singapore Roundtable. For access to that Roundtable discussion see: Source

BNY Mellon Asset Management hires Jeffrey Saef from Fidelity unit Pyramis
From efinancialnews.com: Bank of New York Mellon Asset Management has added a director from Fidelity Investment's institutional money management arm, Pyramis Global Advisors, in the latest departure from the group, which is shedding nearly 3% of its workforce this month. Jeffrey Saef joined as the director of multi-strategy investment solutions in an effort by BNY to bolster the management of the division... Full article: Source

Julius Baer says Wittman to step down as head of investment products
From Bloomberg.com: Julius Baer Holding AG, Switzerland's biggest independent wealth manager, said Beat Wittmann will step down as head of investment products as the bank reins in his strategy of setting up new funds to lure clients. Wittmann, who joined from Clariden Leu 12 months ago as chief executive officer of the unit, will leave ``to pursue other opportunities,'' the Zurich-based bank said today... Full article: Source

Newton Investment Management appoints two senior investment research analysts
Newton Investment Management Limited, part of BNY Mellon Asset Management, has today announced the appointment of two senior investment research analysts - Amanda Young and Laura Aarnio.

Reporting to Campbell Watterson, Leader Investment Process, Amanda Young will be responsible for assisting Newton in researching and engaging with companies on SRI issues in her capacity as SRI Officer. As well as working closely with Amanda Young, Laura Aarnio will be actively involved in corporate governance issues... Corporate website: Source

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Cash manager Horizon captures $600m in Q3 from managers moving away from prime brokers

Horizon Cash Management LLC today announced that the firm has captured more than $600 million in new assets within the last quarter. Horizon reports this significant inflow came from a wide variety of funds that had previously parked their unencumbered cash reserves with prime brokers, clearing firms, banks and money market funds. These managers were seeking more secure custody arrangements, greater transparency and input on investment strategies and security holdings, plus diversification away from single source financial firms... Corporate website: Source

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Other Voices: Always at your service! - Fund administration in Gibraltar is making its mark

The third of six articles written by Rolf Majcen, Managing Director FTC Capital GmbH, Vienna, Austria, www.ftc.at:

Gibraltar provides competitive alternatives for the hedge fund industry, be it as a domicile for establishing new funds (or a home for redomiciling of existing funds) or - irrespective thereof - as a location for administering hedge funds domiciled elsewhere.

Gibraltar is flexible and friendly. It is an exciting place to do funds business. The rationale of the Gibraltar Financial Services Commission (FSC) is obvious - make it a quick and painless process, to enable funds to launch efficiently in Gibraltar. The competitive Experienced Investor Fund-Regime, which was developed in August 2005, enhanced Gibraltar's attraction as a domicile for alternative investment funds and a good number of hedge funds, private equity funds and property funds have already gone down that route. Authorisation under the EIF Regulations is based on a system of self-certification by the investor, the fund administrator and the fund's lawyer. But Gibraltar is not simply a fund domicile. It's forward-thinking legislation and straightforward regulation enables the local fund administrators not only to specialise in administration capabilities and corporate services for structures domiciled in Gibraltar but also for funds established in other jurisdictions.

Traditionally the hedge fund route has been to domicile hedge funds in offshore jurisdictions such as the Cayman Islands, and to a lesser extent, the British Virgin Islands and Bermuda but have them administered in Dublin and listed on the Irish Stock Exchange. However, competition for alternative fund administration business has become intense as it has grown from a small and relatively specialised activity into a mainstream field. Gibraltar has started to get in on that act by servicing sophisticated funds domiciled in other countries. A significant number of these are hedge funds registered in the Caribbean where the promoters require the administration to be carried out in the European time zone. To exemplify, Cayman exempted companies registered as mutual funds under section 4 (3) of the Cayman MFL, the most common fund vehicle in Cayman, or BVI international business companies (private and professional mutual funds) are allowed to be administered from another jurisdiction, therefore even from Gibraltar, which is part of the European Union!

Service providers in Gibraltar are keen to grow the industry, and with its moderate cost base, the domicile is proving to be a very attractive alternative to other more seasoned jurisdictions. Gibraltar hosts a range of fund administrators, from the global names to boutique providers. Its ambitious international fund administration sector, which is headed by the very experienced Capita Financial Administrators (Gibraltar) Ltd (part of Capita Group plc, a FTSE 100 company), serves a large number of small and medium-sized asset and alternative investment managers. However, because they are licensed as Collective Investment Scheme Administrators under the Financial Services (Collective Investment Schemes) Act 2005, they have already demonstrated the capability to service large fund's specific strategies and attracted funds sponsored or advised by the likes of Goldman Sachs, Bear Sterns and Credit Suisse. Also the fact that, a major player in the property business, recently launched a 1 billion USD property fund in Gibraltar by using the structure of an Experienced Investor Fund and Capita Financial Administrators (Gibraltar) Ltd. for administrator speaks volumes for the excellent reputation Gibraltar has built up as a jurisdiction in which to conduct fund business.

Developing fund administration services is crucial for any jurisdiction wanting to compete in the fund business sector and the selection of a fund administrator is often considered an important decision made by the promoter or the hedge fund manager. The global growth of hedge and other funds has put increasing pressure on the resources of the large and well established European centres such as Dublin, Luxembourg or the Channel Islands. Sharing the same time zone as London and being conveniently placed between the US and Far East time zones, Gibraltar's geographic situation means it is ideally located to the provision of administration services to funds from a wide range of jurisdictions. Gibraltar has a clear chance to attract more of the business that is currently done in the aforementioned domiciles, as business in these centres outgrows their size and the quality of service diminishes. The trends are encouraging and Gibraltar is on the poised to become firmly established as a specialist base for hedge funds business and an even stronger competitor in the alternative investment funds marketplace within the European Union and the European time zone for being both a fund domicile and a centre for the fund administration. While technology is a vital component of any servicing arrangement, fund management remains a relationship driven business and even a niche position in the market can be a very effective one to take! majcen@ftc.at. No online Source

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Europe - US asset managers turn to London to open latest offices

From Wealth-Bulletin.com: Three US asset managers have opened sales offices in London in the past month. Sales and client service staff based in the UK capital are seen as essential for businesses that have until now run most of their money in the US. That is less to do with the UK's defined-benefit pensions market, most of which is closed and in run-off, and more to do with being in the same time zone as asset-rich clients in the Middle East, Europe and Africa.

The Kansas City-based investment house American Century Investments is one of the new arrivals, setting up in London this summer under Michael Green, a former chief executive of Morgan Stanley Investment Management's international business. American Century has never been outside the US before... Full article: Source

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Asia - ADM may raise $1bln for distressed Asia debt

From Reuters.com: Distressed debt specialist ADM Capital is looking at raising up to $1 billion in new funds in the coming year to capitalize on a wave of Asian opportunities created by the global financial crisis.

The $2.5 billion Hong Kong-based hedge fund manager believes the worst is still to come for the region with a faltering economy and tight credit markets increasing default rates, said Robert Appleby, the firm's chief investment officer.

"I view it quite simply as the best time in my lifetime for investing in Asia and investing in distressed ... the second best time was back in '97-'98," he told the Reuters Global Finance Summit on Tuesday... Full article: Source

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Emerging Markets - Fitch lowers credit outlook on emerging economies

From AP/Yahoo.com: Fitch Ratings on Monday lowered the sovereign credit rating outlooks for six emerging market economies to reflect higher risks to creditworthiness stemming from the global financial crisis and economic slowdown.

The outlooks on the long-term foreign currency ratings for South Korea, Mexico, Russia and South Africa, were revised down to "negative" from "stable," Fitch, one of the three major international credit ratings agencies, said in a release. A negative outlook means there is a greater chance of the actual credit rating being downgraded... Full article: Source

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Opalesque Commodities Briefing: sign up for the free daily publication on commodities

More than 2000 commodities related articles and research from 26 detailed news categories can be retrieved from the Opalesque Commodities Briefing website: www.opalesque.com/Commodities_Briefing.

The new Opalesque Commodities Briefing is a daily, free service from Opalesque - sign up here now: Source

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Opalesque Real Estate Briefing: sign up for the new free daily publication on real estate

Opalesque's new free daily Real Estate publication, the Opalesque Real Estate Briefing, is now open: www.opalesque.com/Realestate_Briefing.

The new Opalesque Real Estate Briefing is a daily, free service from Opalesque - sign up here now: Source

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Opalesque Sovereign Wealth Funds Briefing: sign up for the new free daily publication on SWF

Thanks to the new Opalesque Sovereign Wealth Funds Briefing: www.opalesque.com/SWF_Briefing/, you will receive a reliable, daily update on the 800 pound gorillas.

The new Opalesque Sovereign Wealth Funds Briefing is a daily, free service from Opalesque - sign up here now: Source

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Environmental Investing - Recession will allow lower carbon caps, Mercer to provide clients with carbon footprint analysis of portfolios

Recession will allow lower carbon caps
From Bloomberg.com: The prospect of a global recession will allow governments to set lower emission targets, an investor in carbon credits said. The U.S. and European Union can afford to set tougher limits on emissions because slower economic activity will cut greenhouse gas output and lower emission permit prices, said James Cameron, executive vice chairman of Climate Change Capital, a London fund manager with more than $1 billion to invest in credits.

``Governments should notice how relatively inexpensive it is to secure compliance and increase demand by having tougher targets,'' Cameron, a lawyer who represented a group of island countries during negotiation of the 1997 Kyoto Protocol, said in a telephone interview. Industry leaders who complain about the cost of emissions trading are either ``hopeless at managing your business or don't care about the climate-change issue.''... Full article: Source

Mercer to provide clients with carbon footprint analysis of portfolios
Mercer announced today that it can now provide clients with a 'carbon footprint' analysis of their portfolio/s, and compare it to a chosen benchmark, such as the FTSE All-Share, S&P 500 or Russell 1000. This new client offering comes as more institutional investors have expressed an interest in assessing and better managing the risks and opportunities associated with the impact of their investments on the environment and climate change... Full press release: Source

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Events - Omgeo Hedge Fund Webinar on 27 Nov. 2008: Learn how operational risk is affecting the Hedge Fund market

27 November, 2008
2:00 to 3:00 PM (GMT)
Online event

Tony Freeman has more than 20 years experience of working in the City of London. He joined Omgeo in April 2004 from JPMorgan Investor Services, where he worked for six years. At JPMorgan Tony was, initially, a senior relationship manager in the Financial Institutions Group and later he worked as a product manager in outsourcing and middle-office processing. To register for this event see: Source

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News Briefs - GM should file for bankruptcy, Ackman says, Deloitte hedge fund practice tops big four in Alpha Magazine`s Alpha Awards Hedge Fund Service Provider rankings, Bank of New York Mellon introduces enhanced private equity servicing platform, Linedata named best buy-side technology provider at BuySide Technology Awards, Dubai Mercantile Exchange to list products with CME Group

GM should file for bankruptcy, Ackman says
General Motors Corp., the biggest U.S. automaker, should file for bankruptcy rather than taking money from the government, hedge fund manager Bill Ackman said. ``It has been hamstrung for years because it has too much debt and it has contracts that are uneconomic,'' Ackman, manager of the Pershing Square Capital Management LP hedge fund in New York, said on the Charlie Rose show yesterday. ``The way to solve that problem is not to lend more money. They should do prepackaged bankruptcy.'' (www.Bloomberg.com)

Deloitte hedge fund practice tops big four in Alpha Magazine`s Alpha Awards Hedge Fund Service Provider rankings
Deloitte today announced it was selected as the top accounting firm in the Alpha Magazine 2008 Alpha AwardsTM by the Hedge Fund 100, Alpha's most exclusive ranking of the world's largest single-manager hedge funds. Hedge Fund 100 voters have consistently rated Deloitte as the pre-eminent accounting firm for four consecutive years...(www.Deloitte.com)

Bank of New York Mellon introduces enhanced private equity servicing platform
The Bank of New York Mellon announced that its Alternative Investment Services (AIS) business is introducing an enhanced private equity servicing platform, combining new technology and outsourcing services to support the specific administrative needs of private equity investment companies. (www.FinExtra.com)

Linedata named best buy-side technology provider at BuySide Technology Awards
Linedata Services, a global leader in the financial technology market, today announced that it has been named Best Buy-Side Technology Provider at the Buy-Side Technology Awards 2008. "Linedata Services was chosen for this award on the strength of its buy-side track record and the quality and breadth of its offerings spanning the front- and back-offices," said Victor Anderson, Editor, Buy-Side Technology...(www.ldsam.com)

Dubai Mercantile Exchange to list products with CME Group
CME Group, the world's largest and most diverse exchange, and the Dubai Mercantile Exchange (DME), the premier international energy futures and commodities exchange based in the Middle East, announced today that DME's contracts will exclusively trade electronically on the CME Globex? platform in the first quarter of 2009, subject to final DME board approval of the definitive agreement. The CME Globex platform offers virtually around the clock access to the broadest array of derivatives products in every major asset class in more than 85 countries and foreign territories worldwide... (www.cmegroup.com) No online Source

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...And finally: Man purchases $11 hammer, breaks into liquor store and steals $9 bottle of wine

From MSNBC.com: A 31-year-old Veradale man was arrested Sunday night after he purchased an $11 hammer and used it to steal a $9 bottle of wine.

Officer Travis Smith responded to the Washington State Liquor Store at 5004 E. Sprague after an alarm was sounded about 7:55 p.m. Sunday. He found the outer pane of a double-pane window shattered and scratched on the inner pane that indicated someone had tried and failed to gain entry into the business.

At 11:50 p.m., Smith was dispatched back to the store after a witness saw a man in a blue hooded sweatshirt leaving the store with a bottle. The suspect was headed eastbound and Smith spotted him in the parking lot of a nearby closed business.

Smith contacted Van Nguyen and saw that he was bleeding from a gash on his hand. He was carrying a bottle of Almaden wine valued at $8.99 and a Ludell-brand hammer that he said he had purchased from a nearby store for $10.99... Full article: Source

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CAIA preparation courses: London – Paris – EDHEC AM Education

Registrations now open: The Chartered Alternative Investment Analyst designation has established itself as the global mark of distinction for alternative investment specialists that institutions, investors and regulators recognise and welcome.

As Authorised CAIA Preparatory Program Provider since 2004, EDHEC Business School provides candidates with a range of flexible preparatory solutions allowing them to take the CAIA examinations with the best chance of success. EDHEC Business School boats the longest and strongest track record of CAIA review course provision and has helped professionals from more than 200 organisations pass the CAIA exams with excellent results.

Course participants include CIOs, fund managers, analysts, consultants, product/marketing/sales managers as well as compliance and back office personnel.

Review seminars for the March 2009 exams will be held at the following dates and locations:
Level I: Paris: January 14-16, London: January 20-22
Level II: Paris: January 13-15, London: February 3-5

Embark on the CAIA certification programme now and

  • Enjoy the benefits of an independent certification of your skills
  • Guarantee a high level of competence to your customers
  • Demonstrate your commitment to high industry standards
  • Benefit from a sounder understanding of all alternative segments: hedge funds, real estate, commodities & managed futures, private equity, and credit derivatives
Book a course: Online or contact Mélanie Ruiz at AMeducation@edhec-risk.com or on: +33 493-187-819

http://www.edhec-risk.com/AIeducation/CAIA

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Hedge Funds World Africa 2008, Nov. 10-14, Cape Town

From the quest for alpha and returns to distressed investing in today's chaos, Hedge Funds World Africa 2008 gives you the opportunity not only to debate these issues that are driving the sector, but to find actionable solutions too.

The definitive South African hedge funds event
  • Discover and question the secrets to the future of emerging markets
  • Profit from the investment opportunities in a violent and volatile world
  • Tap into the potential of Africa as the last niche investment frontier
  • Absorb the collective experiences and perspectives of Hedge Funds gurus from the USA, United Kingdom, Singapore, Greece and Germany
  • Gain first hand knowledge on the response of hedge funds to the current financial market crisis in equities

For further details contact Evashnee Pillay at evashnee.pillay@terrapinn.co.za; or call at +27 (0)11 516 4016 or visit http://www.opalesque.com/index.php?act=conferences&and=ShowConference&iConferenceID=300.

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SOUTH AFRICAN HEDGE FUNDS: Exclusive Manager Introductions Event Nov. 13th Cape Town

South Africa holds numerous opportunities for investors seeking high returns from an emerging market with a low correlation to developed markets. South Africa, as an investment destination, offers the same upside that greater Africa does, but with fewer potential negative factors due to the genuine ability to hedge in a broad-based, liquid market.

Features such as a large listed market capitalisation (>$500mill), developed derivatives & 2nd largest single stock market, South Africa is a sophisticated financial gateway into Africa & an attractive destination for investors looking to diversify their returns.

Meet The Managers at the Peregrine Capital Introduction Event Nov. 13:

An intensive full day event providing you with the opportunity to review & interact with a hand-picked selection of South Africa's leading Hedge Fund and FoF Managers through a series of individual presentations and scheduled private meetings.

  • Economist address: Overview of hedge fund industry & investment landscape
  • Individual presentations from 14 single strategy managers
  • Interviews with 6 of the top funds of hedge funds
  • One-on-one private meetings with your selection of managers
  • *Free of Charge* - Sponsored by Peregrine Prime, SA’s leading Prime Broker
The event will be held following Terrapinn’s Hedge Funds World Africa 2008 Conference on November 11th and 12th: www.opalesque.com/index.php?act=conferences&and=ShowConference&iConferenceID=300.

Contact Ruth de Beer (ruthd@peregrine.co.za / +27.11.722.7523) to secure your participation at the Peregrine Capital Introduction Event. More: www.peregrinesahedgefund.co.za.

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CFA Institute / EDHEC Advances in Asset Allocation Seminar, London Nov. 17-19

This exclusive three-day event will provide you with an in-depth appreciation of the concepts and techniques that will shape the future of investment management as well as equip you with practical tools to improve asset allocation processes, implement novel investment management approaches, and develop new products.

Presented in a highly accessible manner by a team of instructors with established reputations for bringing together academic expertise and industry experience, the seminar balances exploration of new models and approaches with applications and case studies. The seminar will enable you to:

  • Bridge the gap between modern portfolio theory and practical portfolio construction to build stable models
  • Examine enhanced index construction techniques and analyse the asset allocation potential of fundamental index® strategies and socially responsible investing
  • Optimise portfolio construction through integration of parameter uncertainty, non-normality risks, and realistic investor preferences
  • Apply optimal risk budgeting techniques in the context of core-satellite investing to design long-only absolute return funds and novel liability driven investment solutions.
  • Review the latest advances in asset-liability management and explore the potential of alternative investments as diversification, substitution and inflation hedging vehicles
The programme is intended for senior executives and investment management professionals who advise on or participate in the design and implementation of asset allocation policies and portfolio models and for sell-side practitioners who develop new asset management and ALM solutions for investors. More: Brochure, Instructors, Contents. Register online or contact Mélanie Ruiz on: +33 493-187-819 or at AMeducation@edhec-risk.com.

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EDHEC Alternative Investment Days - December 9-10, 2008 - London, UK

The EDHEC Risk and Asset Management Research Centre will be staging the fourth edition of the EDHEC Alternative Investment Days at the ExCeL Centre in London on December 9 and 10 next.

The conference aims to present the applied research conducted by the EDHEC Risk and Asset Management Research Centre with leading pension fund managers and to discuss its results with the institutional investor and fund manager communities.

The first day of the EDHEC Alternative Investment Days, with the Hedge Funds Summit, will focus on the future of the hedge fund industry. The second day of the conference will centre on the integration of alternative investments in institutional portfolios and will survey the latest trends in the alternative investment space.

Distinguished institutional investors speaking at the conference include Sally Bridgeland, CEO, BP Pension Trustees; Sarah Fromson, Head of Investment Risk, Wellcome Trust; Nigel Labram, Head of Pension Fund, Hermes; Fons Lute, Managing Director Alternatives Strategies, PGGM; Jaap Maassen, Chief Pensions Officer APG Investments; Frederic Methlow, CIO, AHV/AVS and Erik Valtonen, Chief Investment Officer, AP3.

For additional information, please contact Mélanie Ruiz at eaid2008@edhec-risk.com or by phone +33 (0)4 93 18 78 19.

For more information on the event and to download the conference programme, please visit:
http://www.edhec-risk.com/events/edhec_conferences/EAID_2008/index_html

To register online, please visit http://www.regonline.com/eaid2008.

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