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From Precy Dumlao, Opalesque Asia:

Activist hedge fund Jana Partners has warned against the rising systematic risk which could threaten to upset the economic outlook of investors for the last quarter.

In its monthly communication to investors obtained by Opalesque, Jana cited three major global macro/policies that affects performance. The first is the growing concern whether a solution is forthcoming over the Greek debt default issue and if Spain and Italy could get fresh financing from major banks. The second is the fear that the Super Committee in the U.S. could not agree on the proposed $1.2tln budget cut which could lead to a de-stabilizing budget impasse. And the perceived "hard landing" in China that could drag down commodity complex and export markets.

"While these issues are pending, we feel the uncertainty itself hinders global growth and we have begun to model our current and prospective investments on a 2012 recession-case basis. Drawing upon the lessons of 2008, we have made the decision to run with considerably lower gross and net exposures for now. We feel it is a market to hold only what you truly believe in - offset by position specific and other portfolio hedges - and to go home with only a modest amount of net market exposure," Jana told investors.

As at end September 30, 2011, Jana Partners Master Fund was down -6.5% (......................

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