In the week ending 26 June, 2015, HFR said that hedge fund launches totaled 264 in 1Q15, the highest level since 2Q14, bringing the total number of hedge funds globally to 10,149. Gottex Asset has launched its Multi-Asset Growth Fund; Citadel is planning to launch a new equities business based on the West Coast; Knight Vinke will start a new fund in September to open its activist hedge fund strategy to investors looking for daily liquidity and smaller minimum investment; and Chris Rokos is back and is converting his family office into a fully-fledged hedge fund.
SYZ Asset Management has launched OYSTER Multi-Asset ActiProtect, a new sub-fund of its Luxembourg SICAV (UCITS).
A number of so-called Tiger hedge funds have shut down but analysts say it is not a trend.
The Lyxor Hedge Fund Index was up 0.3% (as at end June 16) (+2.6% YTD);
The Barclay CTA Index was down 0.17% in May (+1.83% YTD);
And the UCITS HFS Index slowly gained momentum and was up 0.21% (2.71% YTD).
Bridgewater Associates’ year-to-date performance is expected to reach 9.9% in the Pure Alpha Strategy; Pine River, Springs Capital (Hong Kong) and Legends Asset have outperformed the MSCI Asia-Pacific Index last month; Brookfield Asset Management short interest went up 54.5% in May; and Schooner Hedged Alternative Income Fund gained 12.7% since the start of the year.
The assets of the top 400 asset managers rose 17% to reach €50tln; Bill Ackman’s Pershing Square is raising $1bn by launching senior notes; flows into hedge fund-like mutual funds have slowed this year to the weakest pace since 2008; Idinvest Partners closed its private debt fund Idinvest Private Debt III after raising €400m; and multi-alternatives also known as multi-strategy or multi-manager has been attracting inflows and piquing the interest of numerous financial advisors with some $52.7bn in assets.
Sales of UCITS-qualified funds outstripped their non-UCITS counterparts by 419% in April; and equity fund sales went back into positive territory in April, though overall long-term fund flows in Europe slowed.
Among investments, Red Alder Master Fund and Privet Fund have been beefing up stakes in Noble Roman’s pizza chain; hedge fund bets against Japanese share prices rising in the future reached a record level last week; Crispin Odey is shorting Bank of Ireland in the largest bet against the Irish banking system since the financial crisis; Carlyle Group said it plans to invest up to $500m in a South Asia-focused Magna Energy; Morgan Stanley said alternative asset managers, natural gas and MLP stocks offer the best risk-adjusted returns for yield-oriented investors; short sellers are thinking very hard before making another short bet; a group of hedge funds is seeking a meeting with Puerto Rico Governor Alejandro Garcia Padilla to discuss the potential sale of $2.9bn in oil-tax bonds; Leon Cooperman's Omega Advisors disposed of its entire stake in Caesars Entertainment; and 31% of the hedge funds that owned Ally Financial completely exited their positions.
In other miscellaneous hedge fund news, Roy Niederhoffer is promoting the New York City Opera in European tour since last week up to this week; Mark Spitznagel has joined the Rand Paul campaign as Senior Economic Advisor; a flood of money chasing cheaper and more retail investor-friendly hedge fund strategies could reverse if poor market liquidity ends up hitting returns; and Eric Rosenfeld sees convertible arbitrage risk to financial system.
A BNY Mellon survey has found that the majority of advisors intend to continue recommending alternative investments over the next year; and a survey by Altegris said that financial advisors remain bullish on alternatives despite lackluster performance.
On the M&A scene, Neuberger Berman has announced that it has entered into an agreement to acquire management of private equity fund of funds from Merrill Lynch.
High fees are hurting institutional investors, including public funds, when planning their investments; Tulare County Employees’ Retirement Association has named three finalists in its search for a hedge fund-of-funds manager; and Ball State University Foundation is pursuing an alternative investment portfolio that adopts environmental, social and governance (ESG) strategies.
In the U.S., lawmakers have slammed the Obama administration officials for hiring a failed hedge fund manager, but they had the wrong man; and Marathon CEO Bruce Richards said that Puerto Rico power unit can avoid restructuring.
In Europe, hedge funds are now managing Greece; hedge fund managers and investors expect Greece to remain in the euro area after they “war-gamed” the crisis in a 90-minute role-playing exercise; Denmark said it is ready for any liquidity shocks after hitting hedge funds and other investors with an historic palette of measures that made holding kroner a losing trade; a Luxembourg UCITS fund is becoming a recognized global brand, said Denise Voss; and Vienna-based asset managers dominate central Europe, exploiting the bank branch network that Erste, Raiffeisen and Bank Austria built straight after the collapse of communism in 1989.
In Asia, private securities fund companies have been given the green light to enter China’s interbank bond (IBB) market; Chinese regulators are cracking down on shadow lending to stock investors; and Rosefinch Investment is preparing for expansion just days after receiving its asset management license for its new Hong Kong office.
On the regulatory front, Senator Ron Wyden has proposed a bill requiring owners of hedge-fund backed reinsurance firms to pay more taxes or shift the focus of their portfolios; SEC Commissioner Gallagher took on activism and short-termism in a recent speech; the SEC has proposed new reporting requirements for registered funds; and industry insiders are questioning of ESMA has gone too far with its proposed guidelines on asset segregation.
South Africa’s Financial Services Board said that at least 122 hedge funds could miss their registration deadline.
AIMA Australia said that new rules for hedge funds could transform the Australian sector.
Sebi has relaxed its rule on listing and fund-raising norms for start-up companies.
On the legal scene; victims of Arthur Nadel's Sarasota Ponzi scheme might get a little more money to help cover their losses; former IMF chief Dominique Strauss-Kahn is shifting his legal battle to Luxembourg over the failure of a hedge fund that bore Strauss-Kahn’s name; Catalyst Capital filed another lawsuit against Greg Boland’s hedge fund West Face Capital; South Korean authorities are investigating Cassia Capital for alleged illegal options trading; BlueMountain, Citadel, and Pimco received third-party subpoenas in an investor lawsuit about credit swaps; and the SEC obtained a court order to freeze the assets of Haijian Luo over what it called suspicious activity.
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