Alternative Market Briefing

Strategies: Swiss firm: distressed, macro and merger arb top strategies for the remainder of the year, Key Asset management CEO Jones says it`s too early to buy distressed credit (Video), Some London HFs use multiyear incentive plans to encourage long-term thinking, good selling point, Short-selling costs double as more investors are drawn to strategy, Blacksquare ups macro exposure in Caxton-only FoF, Hedge funds moving into indexing marketplace

Friday, July 11, 2008

Opalesque Exclusive: Swiss firm: distressed, macro and merger arb top strategies for the remainder of the year Following an essentially defensive first semester, hedge funds should be posting positive performance if they use suitable strategies, ASA Switzerland Financial Services SA told Swiss Paper Le Temps. ASA is a global investment management firm with offices, clients and business lines spanning the world's major markets (Source). ASA identified 3 main strategies: distressed, macro and merger arbitrage.

Distressed strategies bet on the collapse of the value of credit products. The classical approach consists in taking long positions on collapsed debt and wait till it regains value. For some managers, the cycle will not start until next year. Some managers adopt a contrarian approach and short on debt which value should go down further. ABSs and CLOs are the favourites.

Macro strategies bet on market expectations and speculate on arbitrage created by decoupling.

Merger arbitrage strategies will benefit from the scarcity of large deals, the move towards smaller deals, which number has gone up 11% during the first 5 months of the year. However, a slowing-down of the markets could lead to a decrease in the number of all mergers.

Key Asset management CEO Jones says it`s too early to buy distressed credit (Video) From Bloomberg.com: Chris Jones, chief investment off......................

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