Fri, Dec 19, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Poorly performing hedge fund face with liquidations and restructurings

Monday, June 20, 2011

Nigel Sidebottom
Opalesque Industry Update – Hedge funds that have been underperforming the last couple of years are facing liquidation. Most of these are investment trust hedge funds that were launched as absolute return strategies and that have failed to deliver their promised alphas.

A report has quoted Numis Securities, which said that the decision to liquidate underperforming hedge funds should be expected.

Numis said, “Numerous listed funds of hedge funds have wound up over the past few years and we believe that further consolidation is needed. In addition, listed funds are facing increased competition from UCITs funds, especially in long/short equity strategies.”

Investors are now heading towards open-ended funds under the European UCITS III director where they can move their money more frequently and the risk of discounts is nil. Nigel Sidebottom, the deputy chief investment officer at Premier Asset Management and the manager of the Premier Enterprise fund, commented that many investors have lost money from poorly performing hedge funds.

Amongst those facing liquidation is Cazenove Absolute Equity, the board of which will vote this week to determine if the fund will continue operating under its present set up. Cazenove’s board is proposing a change in its investment policy. Performance plunged in 2009 and 2010 and it has lagged its counterparts.

It was also reported in April that Trafalgar Asset Management is liquidating its flagship fund, the Trafalgar Catalyst fund as a result of "material" investor redemption requests.

According to Fund Web, shareholders of Dexion Equity Alternatives voted last week to restructure the fund and change the trust’s investment policy from a global fund of hedge funds to a hedge fund focused in American equity long/short hedge funds.
Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  5. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und