• HFRX Indices Performance for June
• Curbs on hedge funds may limit their stability role
• Calpers taps vet to lead alternative investments
• Salomon Brothers Capital Fund losing second manager in a row to hedge funds
• Senate schedules regulation hearing
• Elections bring insecurity to regulator
• Glassman hits out at SEC research
• SEC isn`t finished with Invesco yet (JP)
• Knight to take $79 mln SEC settle charge, warns
• Morgan Stanley Sex Discrimination Trial Begins
• Morgan Stanley And The Women: this time it`s different
• Prediction Dynamics Expands Market Base With New Product for Quant Trading
• Financial Tradeware launches .NET trading system for hedge funds
• Hedge Street Exchange to offer options Oct. 1, targets retail
• World`s Futures Markets Developing CDS Futures Contracts
• Man with a special talent to bemuse the City
• Martin Currie says wins GBP 2.0 bln fund inflows
• S&P cuts Italy rating, says pensions a worry
• German institutions to raise hedge fund allocation to max 5% within the next 5y
• More Hedge Funds Needed To Develop Asian Market
• CICC Plans First Chinese IPO Without Foreign Underwriters` Help
• Tokyo Adviser Trying to Help Japanese Hedge Fund Market

• GAIM USA Fund of Funds: the largest gathering of hedge FOF and investors
• Hedge Fund Best Practices: Succeeding In the New Regulatory Environment
• Alternative Investment Roundup: three concurrent conferences on Hedge Funds, Private Equity & Real Estate
• IPC’s 3rd pan-European forum on Hedge Funds for Nordic Pension Funds - 10% discount!
• 7th annual Hedge Funds World Asia 2004 Hong Kong - 10% Discount for subscribers!
• NEW! : 2nd Annual Global Absolute Return Congress (‘Global ARC’) Boston
• Administrative Options/Contact

HFRX Indices Performance for June 2004:
HFRX Index	June ROR	YTD
HFRX Global Hedge Fund Index	-0.17%	-0.22%
HFRX Equal Weighted Strategies Index	-0.19%	-0.47%
HFRX Convertible Arbitrage Index	-0.69%	-1.22%
HFRX Distressed Securities Index	0.68%	1.84%
HFRX Equity Hedge Index	-0.13%	1.42%
HFRX Equity Market Neutral Index	-0.78%	-0.77%
HFRX Event Driven Index	0.19%	0.81%
HFRX Macro Index	-1.30%	-5.28%
HFRX Merger Arbitrage Index	0.36%	-0.37%
HFRX Relative Value Arbitrage Index	0.52%	-0.29%
*Index Value calculated from inception (04/01/2003).
**Risk Free Rate is based on average annual yield of 90 day T-Bill.

More details: Source

From Reuters.com: Greater regulation of the risks hedge funds take in financial markets could limit their growing role as major providers of stability and liquidity in times of turmoil, industry sources said on Wednesday. They said stricter regulation of hedge fund activity is unnecessary because the industry is already cleaning up its act to attract institutional investors looking for higher returns, but not more risk. "In times of corrections and volatility you need risk-taking players who are ready to help stabilise the market,"…Full article: Source

Reuters reports America's largest public pension fund, whose plans to put $1 billion into hedge funds prompted many others to give the secretive but often successful industry a try, on Wednesday appointed a new executive to run its alternative investments unit. The California Public Employees' Retirement System, Calpers, promoted Leon Shahinian to Senior Investment Officer for the $162 billion fund's Alternative Investment Management program. Shahinian, who joined Calpers nearly 6 years ago, replaces Rick Hayes, who left the fund to become a managing partner of Oak Hill Capital Management. Full article: Source

From CBS.MW / Investors.com: Rob Donahue is stepping down as manager of Salomon Brothers Capital Fund, the second manager to leave the $1.6 billion mutual fund since May, a spokesman for the fund's adviser said Wednesday. Donahue, who had co-managed the fund (SACPX) since August 1998, was named lead manager on May 1, replacing Ross Margolies. Margolies left to focus on hedge funds he runs, according to Edward Giltenan, a spokesman for Citigroup Asset Management, the mutual fund's adviser. Donahue, who is departing to run his own hedge fund, will leave Citigroup Asset Management on July 15. Source

Mar/Hedge reports the Senate Banking Committee will hold a hearing on regulation of the hedge fund industry on Thursday, July 15, the day after the divided US Securities and Exchange Commission is expected to propose a new hedge fund regulatory scheme. The article names witness list for the hearing, continue here: Source

According to the FT, the mid-term US elections two years ago were the last time the Securities and Exchange Commission looked riddled with conflict. Harvey Pitt, then chairman, announced his resignation on election night itself. There is no surprise that as this November's polls near, the problems of William Donaldson, SEC chairman, seem to be increasing too. For most of this year a handful of controversial reform plans have divided the SEC's five commissioners … full article: Source

From the FT: The Securities and Exchange Commission should carry out better research before imposing further changes on US business, one of the regulator's senior policymakers has said. Cynthia Glassman, one of five SEC commissioners, has been at odds with William Donaldson, SEC chairman, over a number of controversial proposals this year, including oversight of hedge funds and mutual fund governance. Ms Glassman, a Republican like Mr Donaldson, said one reason why she opposed some of the plans was that the SEC had "not developed a sound economic justification and used our economic resources as well as we could". Full article: Source

According to Reuters, the U.S. Securities and Exchange Commission plans to file more claims in its civil lawsuit against Invesco Funds Group, the agency said.. In the filing. which was made public on Tuesday in federal court in Denver where the case is being handled, the SEC said that it expected to make its amended filing by July 26. The amended complaint would add additional parties as well as additional claims, the SEC said. In December, the SEC sued Invesco over improper trading in mutual funds. Regulators claim Invesco allowed selected investors to profit from market timing. Source

From CBS.MW: Knight Trading, the largest market maker in Nasdaq stocks, warned Wednesday that second-quarter earnings would miss expectations and said it would take a $79 million charge to pay for a settlement with U.S. regulators. Knight was probe into institutional trade activity, conduct and supervision that occurred in 1999 through 2001; and books and records, document production and record-keeping deficiencies. Source

Reuters reports Wall Street brokerage Morgan Stanley will defend itself on Wednesday against claims it denied women promotions, allowed sexual groping, office strip shows and other forms of sexual discrimination. Source

Forbes writes the case is unusual because it is headed for trial in contrast to analogous cases alleging unequal pay and promotional opportunities brought against Merrill Lynch and Citigroup's Smith Barney unit in recent years. Past cases against brokerage firms--long known for their bawdy humor and macho culture--have been brought by female support staff or stockbrokers. The Morgan Stanley case, however, is on behalf of top employees, some with million-dollar-plus paychecks. It is also different because the EEOC, as opposed to private lawyers, has taken on the case. While the agency fields tens of thousands of such complaints annually, in 2003 it filed just 393 sex-discrimination lawsuits. Full article: Source

Prediction Dynamics, a leading provider of quantitative trading software to the financial community, today announced the launch of Crucible EngineTools 1.0. This expansion to the company's product offering provides traders and analysts with the tools they need to build and deploy an unrestricted range of quantitative trading models. Typical applications include high-frequency time-series models, cross-sectional equity models, and derivative pricing models.

"The use of quantitative trading methods is on the increase across investment houses," says Dr John Carney, Chief Technology Officer, Prediction Dynamics. "This is partly due to the recent success of many hedge funds that use such model-driven trading strategies. However, this market is already becoming somewhat crowded and there is a strong appetite amongst quantitative traders to explore alternative methods for enhancing such strategies. In line with this, Crucible EngineTools provides access to a robust nonparametric modeling methodology, while at the same time offering the flexibility necessary to maintain a significant proprietary advantage." Source

Financial Tradeware, provider of portfolio and fund management Straight Through Processing solutions, today unveiled it's latest product, H-FUND, which incorporates the new TMS application (Trade Management System), at the Fund Forum International 2004 in Monte Carlo. H-FUND is a portfolio and fund management solution based on a Microsoft.NET platform; it is designed to automate all the pre- and post-trading activities for Hedge Fund traders. TMS is the latest addition to the product suite of more than 25 individual and specific, fully integrated applications. TMS enables the electronic execution and reporting of equity orders.

H-FUND is the result of a joint development between Financial Tradeware and Microsoft; it is now available in BETA version and will be made generally available by Q3 2004. The solution automates and integrates all trading activities of Hedge Funds, including:

• Real time execution via FIX protocols
• Clearing and settlement via SWIFT
• Real time NAV calculation and accounting
• Portfolio modelling
• Risk management tools

Source

Hedge Street Inc., the San Mateo-based founder of a U.S. electronic exchange, said it may offer as many as 22 options contracts on economic statistics, currencies and commodities when it opens Oct. 1 to compete with markets in Chicago and New York. Unlike the Chicago Mercantile Exchange and other established exchanges, whose main customers are banks, hedge funds and other large investors, Hedge Street will target individuals, the company said. Source

Dow Jones Newswire / Yahoo report the availability of an exchange-listed futures contract could simplify investment in credit default swaps by giving easy access to a broad array of companies. In the current market, users have to arrange a large number of swaps to get the same exposure - a costly and time-consuming process. "There are several uses but hedging credit and bond positions would be one of the biggest,"…Full article: Source

From the FT: Man bemuses in several ways. One of the earliest movers into the hedge fund industry, and with a tremendous marketing ability, it repeatedly bemuses City analysts with results at the top of, or beyond, expectations. It did so again yesterday, with an annual meeting trading update that showed $6bn (£3.5bn) of assets gathered since the year-end, well ahead of City forecasts. Redemptions were just $600m, far lower than many feared, given that in recent months hedge funds in general, and Man's flagship AHL fund in particular, have performed poorly. Full article: Source

According to Reuters, British fund firm Martin Currie said on Wednesday it had won 2.0 billion pounds ($3.70 billion) of new client money over the past nine months, putting it on track to beat its target for the financial year. Source

From IPE.com: Standard & Poor's Ratings Services has lowered its long-term sovereign credit ratings on Italy to AA- from AA, citing weak public finances and rising pension expenditure. S&P said it made the rating cut “due to the deterioration of public finances both in 2004 and beyond”. It added: “Adding to fiscal strains, Italy will have to meet the challenge of one of the most adverse demographic profiles of all rated sovereigns, which has already contributed significantly to the recent fiscal degradation.” Source

INVESCO and German association of investment and asset management BVI published their 5th yearly study on the asset allocation of institutional investors. The surveyed group has 56 Billion EUR under management. Whereas in 2003 the hedge fund allocation was 0.7% only, this ratio is predicted to go up to a maximum of 5% within the next five years. With less than one percent, certificates hardly play a role in the institutional portfolios. The study denotes that the institutions do not succumb to a “hedge fund buying frenzy” but work very professionally with this asset class in order to achieve increase returns. No online Source

Dow Jones/Yahoo report more authorized retail hedge funds will help develop the market for these alternative investments that have so far tended to be the domain of high-net-worth investors, say financial and fund industry participants surveyed in Hong Kong and Singapore. The survey by Pioneer Investment and Bank of Bermuda, conducted between February and April, involved 47 participants from top retail banks, independent financial advisers, institutional investors, investment consultants and private banks. "The retail hedge fund market remains underdeveloped, with many misconceptions persisting," Pioneer and Bank of Bermuda said in a joint press release. "Retail investment advisers and institutional investors alike believe market development can best be achieved through the approval of more authorized hedge funds," the statement added. Source

Bloomberg reports China International Capital Corp., the biggest investment bank in the world's fastest-growing major economy, plans to snub foreign underwriters for the first time in a stock sale to overseas investors. CICC, one-third owned by Morgan Stanley, will start selling $200 million of stock in late August for Irico Group Corp., said people familiar with the sale. Source

HedgeWorld.com reports Teneo Partners Ltd. wants to expand the range of services it offers hedge fund managers looking to break into the Japanese market by obtaining a new license that will allow it to solicit Japanese investors on behalf of its hedge fund clients. With the license firms can conduct direct solicitation, including distributing prospectuses and subscription forms to potential investors. Full article: Source

September 20-22, 2004 * The Plaza Hotel * New York City

The Largest Gathering of Hedge Fund of Funds & their investors in the USA in 2004

This new GAIM event will enable debate on the critical strategic, operational and performance related challenges facing the industry in the heart of the fund of funds industry, NYC. With a speaker faculty widely hailed as a Who's Who of the Fund of Funds industry, discussions will draw on pioneering new research, expert opinion and advice from leading consultants, outperforming managers as well as the largest gathering of fund of funds in the USA in 2004.

For more information visit: www.gaimusaFoF.com or call +1-888-670-8200

b>The Explorers Club, New York City
Tuesday, September 14, 2004

As the outside world continues to probe the day-to-day operations of hedge funds and their managers the need for them to develop an internal infrastructure significantly increases.

This one day seminar addresses not only the latest SEC proposals but will also assist a hedge fund in choosing and developing the tools they need to create an infrastructure designed to meet the day-to-day operational, regulatory and ethical challenges they face. These issues are fundamental to protecting the bottom line and long term strategic growth of any hedge fund organization.

Whether a hedge fund manager is starting up its first fund, is registered or unregistered, or whether it has been around since the creation of hedge funds, the problems and issues are often the same and require urgent attention. Tackling these issues head on Institutional Investor presents its Hedge Fund Best Practices Seminar. Click on link for further information:

July 13 - 15, 2004 Waldorf Astoria - New York, NY

The Alternative Investment Roundup is three concurrent conferences at the same location covering the most important alternative asset classes-Private Equity, Hedge Funds, & Institutional Real Estate. The programs share networking events, offering you unmatched opportunities to meet a wide array of alternative investment professionals and investors. Over 750 decision makers attended last year's event.

10% discount for Alternative Market Briefing Readers for the Alternative Investment Roundup.For more information, please visit www.srinstitute.com/air or contact Chris Petersen at CPetersen@srinstitute.com

2 Day conference: 23-24 September 2004, Sheraton Stockholm Hotel & Towers, Stockholm

10% DISCOUNT for Alternative Market Briefing Readers (quote AMB) PLUS: BOOK BY June 25 and receive a FREE copy of the Hedge Funds Strategies Book.

Visit: http://www.iqpc.co.uk/GB-2272/AMB for more information - Significant discounts also apply for institutional investors

Finance IQ’s annual forum is widely recognised as the ONLY event dedicated to pension fund managers investing in hedge funds. This year's programme will expand upon core issues from last year, and will tackle the most pertinent challenges which have arisen over the past 12 months. Many Nordic hedge funds doubled their assets under management last year. Hear from the following pension funds & hedge fund experts:

Folksam, Postens Pensionsstiftelse, Finansinspektionen, Skandia Insurance Company, Forsakringsforeningen for det Statliga Omradet (FSO), AP2, Lansforsakringer AB, Hermes Pensions Management, London Business School, Harcourt Investment Consulting AB, Asterias, Swiss Capital Group, EIM, ADI Gestion, AP7, FGS Capital

To guarantee your place visit: http://www.iqpc.co.uk/GB-2272/AMB or email: sonia.pun@iqpc.co.uk or call: +44 207 368 9300 quoting AMB to receive your 10% discount.

Announcing the 7th annual Hedge Funds World Asia 2004 13-15 September, 2004, Hong Kong Convention and Exhibition Centre:

With over 90 expert speakers form over 15 countries; the 7th annual Hedge Funds World Asia is the regions leading alternative investment event and Hong Kong's only hedge funds event with a proven track record. For more information please contact Rani at Tel: +65 63222 721 or mail to rani.kuppusamy@terrapinn.com