Opalesque Newsletter 19. September 2003

Put 5-10% into hedge funds - ex-Watson partner

Former Watson Wyatt partner and senior investment consultant Stephen Oxley says pension funds should allocate between five and 10 percent to hedge funds. Oxley advocates hedge funds, saying they are “a good source of alpha when alpha is in short supply”. He said the allocation to hedge funds could come out of equity exposure. Hedge funds are a proxy for equities, Oxley said, though they have a low correlation to stocks.

http://www.ipe.com/default.asp?article=15374

Hedge funds should be made available to retail investors

Retail consumers should be given the option of investing in hedge funds, according to a new survey of senior fund managers, private client stockbrokers and private bankers. The research, which was conducted by Dr Oonagh McDonald on behalf of business advisers RSM Robson Rhodes and investment managers Intrinsic Asset Management, was published following the FSA’s Feedback Statement to DP 16. The respondents believed that hedge funds should be accessible to a wider range of investors to help them spread their investment risk and generate greater returns.

http://www.ifiglobalonline.com/ViewStory.asp?ID=2132

Mass. pension fund to start hedge fund picks soon

Massachusetts will begin deciding next month who will manage the $1.4 billion it plans to put into hedge funds when it makes one of the biggest bets a state pension fund has ever wagered on the secretive but successful industry, the state's treasurer said. In June, Treasurer Tim Cahill got the green light to give hedge funds a try. By December, the state's $28 billion fund should be on its way to investing 5 percent of its assets in the loosely regulated, $600 billion industry.

http://reuters.com/financeNewsArticle.jhtml?type=usFundsNews&storyID=3470817

Change Urged to Diversify Pension Fund in New Jersey, Hedge Funds Investigated

Seeking support for a plan that would allow private investment managers to run part of New Jersey's $60 billion pension portfolio, the McGreevey administration released a consultant's report today that urges the state to reduce its risk by diversifying its investments. New Jersey's employee pension system, the only public retirement fund in the country managed solely by civil servants, lost about a third of its value during the stock market slump of the past three years…Despite opposition from state employees' unions, Mr. McCormac hired the consulting firm Independent Fiduciary Services to analyze the system. The firm recommended that the fund, which now invests only in stocks and bonds, begin investing in hedge funds and venture capital. State law does not permit public employees to invest in hedge or venture funds, so such a move would require the state to hire private managers (accentuation by editor).

http://www.nytimes.com/2003/09/19/nyregion/19PENS.html?ex=1064635200&en=f914d7f884a18b14&ei=5062&partner=GOOGLE

State regulators, Janus to meet

Colorado's securities commissioner plans to hold discussions with Janus Capital Group following allegations that Janus allowed a hedge fund to profit at the expense of its ordinary mutual fund investors. State Securities Commissioner Fred Joseph said Thursday that he plans to talk with Janus officials, perhaps as early as the next few days, concerning New York Attorney General Eliot Spitzer's allegations.

http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_2280794,00.html

Prudential says regulators probing funds

Prudential Financial said Thursday that federal regulators and New York State Attorney General Eliot Spitzer requested information in an expanded probe into its mutual fund trading. The Newark, N.J.-based company said it received formal information requests from the Securities and Exchange Commission, NASD and Spitzer. It said it is cooperating with all inquiries and conducting an internal review. It announced the requests in a securities filing.

http://www.usatoday.com/money/perfi/funds/2003-09-18-prudential-funds-probe_x.htm

Hedge Fund Charity: From The Rich To The Poor

Hedge fund managers are notorious for their secrecy. Indeed, most would prefer it if we left their names off the pages of this issue. But despite their attempts to stay out of the limelight, many fund chiefs are attracted to the sometimes high-profile world of philanthropy. Their current charity of choice: the Robin Hood Foundation. Formed in 1988 by cotton trader turned fund manager Paul Tudor Jones, Robin Hood strives to alleviate poverty in New York City.

http://www.forbes.com/2003/09/18/cz_mm_0918robinhood400s.html

HSBC REPUBLIC BANK (SUISSE) expands in Zurich

To consolidate its position as a major player in hedge funds, HSBC Republic Bank (Suisse) SA is setting up a dedicated team of three persons at its Zurich office. This team will work alongside the twenty professionals of the Alternative FundInvest Group who are based in Geneva and report to Gérald Messier. The new Zurich team will be headed by Barbara Rupf Bee assisted by Heinz Hofmann and Gabriela Rutschmann-Rathgeb, all three formerly with UBP. Together with André Heusser who is currently responsible for Swiss institutional sales in Geneva, this new unit will focus on institutional clients and families offices in Switzerland, Northern Europe, Germany and Austria. Both, the Geneva and the Zurich teams are reporting to Gabriel Perahia, Chief Investment Officer Group Private Banking.

Traders See More Reforms At NYSE After Grasso Departure 

Following the departure of New York Stock Exchange Chairman Dick Grasso, market participants expect more changes in store for the Big Board and the investors its serves. That was the tone of a panel discussion on floor-based auctions markets at an equity markets conference here Thursday, sponsored by the Investment Company Institute. It's likely there will be significant changes regarding the NYSE's standing as a self-regulating organization, said Robert McCooey, chief executive of Griswold Company, an NYSE member firm. "Everything is on the table," he added.

http://news.morningstar.com/news/DJ/M09/D18/1063937462794.html

Challenges ahead for new NYSE boss

Chairman Richard Grasso's pressured exit ends an embarrassing episode for the New York Stock Exchange, but it leaves plenty of debris for the next leader of the Big Board to clear away.

http://edition.cnn.com/2003/BUSINESS/09/17/nyse.challenges.reut/

NYSE Statement

The New York Stock Exchange Board of Directors tonight announced the resignation of chairman and chief executive officer Dick Grasso.    “Dick offered to submit his resignation if the board requested, and the board did so and accepted that resignation,” said H. Carl McCall.  “Dick called a special meeting of the board this afternoon in light of the recent discussion surrounding the Exchange and his compensation.”  Mr. McCall chaired the meeting and served as the lead director.

http://www.nyse.com/press/1063796433687.html

NYSE board votes 13-7: Grasso must go 

After weeks of withering criticism over his $140 million pay package, New York Stock Exchange chairman Richard Grasso was forced to resign Wednesday night.

http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20030918/bs_usatoday/11856538