Mon, Feb 8, 2016
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. How Einhorn survived a nightmare year[more]

    From Bloomberg.com: Even when a hedge fund has an awful year, which was the case for David Einhorn's Greenlight Capital, there are lessons to be learned. Many funds would have had a tough time surviving a year like Einhorn experienced in 2015, when all the stars seemed to align against him and Green

  2. Legal - Hedge fund founder wins early release in U.S. insider trading case, Gramercy seeking $1.3 billion from Peru over land-bond dispute[more]

    Hedge fund founder wins early release in U.S. insider trading case From Reuters/Streetinsider.com: Former hedge fund manager Doug Whitman on Tuesday won a reprieve from serving the remainder of his two-year sentence for insider trading after several judges expressed skepticism that his 2

  3. Investing - David Einhorn finds a winner in Michael Kors[more]

    From Thestreetinsider.com: Greenlight Capital hedge fund manger David Einhorn took his lumps in 2015. The fund lost over 20 percent on the year amid bets gone bad being long a plunging SunEdison and short a couple high-flying FANG stocks. However, today Einhorn is again showing his stock picking pro

  4. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  5. Computer-driven hedge funds make money during January’s selloff[more]

    Komfie Manalo, Opalesque Asia: Commodity trading advisers (CTAs) that use computer programs to guide how they trade, made millions of dollars during last month’s market selloff on the back of declining oil prices and global equities and big moves in currencies. Data provider