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New asset-weighted Mizuho-Eurekahedge suite to be one of the largest collections of hedge fund indices

Wednesday, September 28, 2011

Alexander Mearns
Opalesque Industry Update - Eurekahedge, a market leading alternative fund data provider, announced today that they are to launch a suite of new asset weighted indices, under the name ’Mizuho-Eurekahedge Index’.

This ground breaking suite of indices follow a rigid methodology that will enable investors to easily utilize them for benchmarking their portfolios and building products such as replication indices, passively managed index funds and ETFs. Alongside Eurekahedge’s existing indices this will be one of the largest collections of hedge fund indices in the world. This global index will draw on both the Mizuho and Eurekahedge brands in an effort to further establish the presence of both entities in the market and raise their recognition in new investment sectors.

In March 2011, Mizuho Corporate Bank, Ltd. (“Mizuho”) acquired a 95% stake in Eurekahedge. Along with Eurekahedge in Singapore, Mizuho also covers alternatives through Mizuho Global Alternatives Investments, Ltd. (MGAI) in Tokyo and Mizuho Alternative Investments, LLC (MAI) in New York.

The indices will be available in October 2011 with September performance numbers and data going back to January 2005.

“With the current volatility in the markets there is increasing demand for more manageable and predictable return streams. The Japanese pension fund industry is currently reported to have almost US$100 billion invested in alternatives and in particular is undertaking a great deal of research into this area. So with the launch of these indices we have provided the means for financial institutions to create products around these new indices to meet this demand,” said Alexander Mearns, CEO of Eurekahedge.

Mr Mearns goes on to say, “The absolute return fund industry is now back at US$2 trillion and while it is much smaller than the US$30 trillion mutual fund/retail fund industry it has far better annualized returns, less volatility and is growing at a faster rate. In tandem with this growth, we are seeing a strong demand from investors for liquid index linked products such as replication indices and ETFs. In addition we expect the Mizuho-Eurekahedge Index to be the leading hedge fund index benchmark for investors worldwide.”

How the methodology works
The indices will be asset weighted so that the performance of the larger funds will have a more significant impact on the performance of the index. For example, the Mizuho-Eurekahedge TOP 300 All Strategies Index will select the largest 300 funds by assets in much the same way that mainstream equity indices do by market capitalization. In addition historical returns will not be frozen, thereby eliminating backfill bias. Small funds will be ejected and funds must meet minimum assets under management (AuM) and track record criteria in order to enter. All indices will have their funds’ underlying local base currencies converted to USD; and 3 special indices with fully hedged forex transactions for major currencies (USD, JPY, EUR).

Examples of indices to be launched

Mizuho-Eurekahedge Global Index (USD)
Mizuho-Eurekahedge Asia Pacific All Strategies Index (USD)
Mizuho-Eurekahedge Asia Pacific ex Japan All Strategies Index (USD)
Mizuho-Eurekahedge Emerging Markets All Strategies Index (USD)

Mizuho-Eurekahedge TOP 100 All Strategies Index (USD)
Mizuho-Eurekahedge TOP 300 All Strategies Index (USD)

Mizuho-Eurekahedge Long Short Equities Index (USD)
Mizuho-Eurekahedge Multi Strategy Index (USD)
Mizuho-Eurekahedge Arbitrage Index (USD)
Mizuho-Eurekahedge CTA / Managed Futures Index (USD)
Mizuho-Eurekahedge Event Driven Index (USD)
Mizuho-Eurekahedge Macro Index (USD)

press release


Founded in 2001, Eurekahedge is an independent financial data and research company focusing on alternative investments. Eurekahedge maintains coverage on approximately 25,000 alternative funds globally and its research covers hedge funds, funds of funds, UCITS III hedge funds, private equity funds, Islamic funds, real estate funds, SRI funds and long-only absolute return funds. Eurekahedge has offices in Singapore and New York, and in March 2011 Mizuho acquired a 95% stake in Eurekahedge.

Mizuho Corporate Bank, Ltd. provides financial and strategic solutions for the increasingly diverse and sophisticated needs of clients, focusing its efforts on serving major corporations, financial institutions, and public sector entities. A relationship management approach to serving clients enables Mizuho Corporate Bank, Ltd., together with affiliates such as Mizuho Securities Co. Ltd., to develop customized solutions in areas such as corporate, structured and project finance, investment banking, transaction banking and risk management. With offices in more than 30 countries, Mizuho Corporate Bank, Ltd. offers clients both localized service and the extensive reach of a global business network. Mizuho Corporate Bank, Ltd. is a subsidiary of the Japan-based Mizuho Financial Group, Inc. (NYSE: MFG), one of the largest financial services companies in the world, with total assets of over $1.5 trillion as of December 31, 2010.

BG

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