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Posts Tagged ‘Hedge Funds’

China crash: hedgies’ winners, losers

In China on 22/07/2015 at 2:11 pm

Asian hedge funds’ 13-month winning streak came to an end in June.

Some of the region’s savviest investors such as Pine River Capital Management’s Dan Li and former Highbridge Capital Management Asia head Carl Huttenlocher were hit as a correction in Chinese equities spread to Hong Kong. The Eurekahedge Asian Hedge Fund Index slipped 1.3 percent last month, the first loss since April 2014, with 62 percent of the funds having reported …

Among the minority that made money in June was Owl Creek Asset Management’s $600 million Asia fund, which gained 2.9 percent, helped by long-short China investments, said a person with knowledge of the matter. The fund focused on corporate events such as mergers and led by Jeff Altman, returned 16 percent in the first half.

Nine Masts Capital, a Hong Kong-based fund expected to have more than $750 million of assets at the beginning of August, returned 0.6 percent in June for an 11.2 percent gain in the first half, according to updates sent to investors and seen by Bloomberg News.

The fund, run by former Deustche Bank AG’s Saba proprietary traders Wang Bing and Ron Schachter with co-founder James Tu, seeks to profit from pricing gaps between different securities including equity and credit sold by the same companies. It added another estimated 2.6 percent this month through July 10.

http://www.bloomberg.com/news/articles/2015-07-16/asia-hedge-funds-have-first-loss-in-14-months-on-china-crash?nl=business&emc=edit_dlbkam_20150717

WHY HEDGE FUNDS ARE CLOSING

In Uncategorized on 21/05/2015 at 1:46 pm

Increased regulation, volatile markets and heightened investor scrutiny have prompted hedge funds to close their operations in recent months to focus on managing their own wealth, Alexandra Stevenson writes in DealBook. Shutdowns in the industry are not new – in past years, titans like George Soros and Stanley F. Druckenmiller have closed their hedge funds to manage their own money – but these days, hedge fund managers are complaining about external factors that make it more difficult to make money, like the regulatory changes brought about by the Dodd-Frank Act. For Gideon King, of Loeb King Capital Management, running a hedge fund had just become “too cumbersome,” as he said in January in a letter to investors. “As the endless quest for becoming institutional continues on, the soul of investing might get lost, as the unmitigated compliance processes become cumbersome and interfere with the purity of speculative contemplation,” he wrote.

Disgruntled investors are putting more pressure on hedge funds as well, angry about high fees for low returns, Ms. Stevenson writes. The average hedge fund returned 3 percent last year compared with a 13.7 percent gain for the Standard & Poor’s 500-stock index, and many investors are choosing to express their displeasure by withdrawing their money. “If you have enough money and on top of that it’s a tough market and you don’t want to deal with investors asking about performance, you can take the high road and say, ‘Here’s your money back,’ ” said Steven Nadel, a hedge fund lawyer at Seward & Kissel.

Even as some investors withdraw their money, a greater number are pouring money into hedge funds for the first time, bringing the industry’s assets under management to nearly $3 trillion. That has made it difficult for hedge funds to carve out a niche, especially among activist investors, who buy a small stake in a company to pressure it to make changes. “So many hedge fund managers are turning into activists that companies often discover that more than one activist has a plan for how they can change,” Ms. Stevenson writes.

NYT Dealbook

S&P index fund beats hedgies over 7 yrs/ Hedgies, PAP ministers & monkeys

In Political governance on 07/05/2015 at 1:44 pm

With three years to go, Warren Buffett is comfortably winning his charity bet that a low-cost index tracker would trounce a portfolio of hedge funds over ten years.

Returns from the S&P 500 index fund is beating a portfolio of funds assembled by hedge fund manager Protégé Partners by 63.5 per cent to 19.6 per cent, according to a slide Mr Buffett presented at Berkshire Hathaway’s annual meeting this past weekend.

(Monday’s FT)

Chart: Buffett's bet (Protégé Partners hedge fund selection v S&P 500 index fund)

http://im.ft-static.com/content/images/1dcdf770-f288-11e4-b914-00144feab7de.img

As to what PAP ministers and hedgies have in common? They pay themselves a lot for mediocre performance.

The $11.6 billion which Institutional Investor’s Alpha calculates this ultra-elite [hedgies] was paid last year, an average of $467 million per hedge fund boss, would still seem troublingly high.

Such gains seem out of line with the value of their putative contributions. After all, the modern economy is built on collaborative effort, not to mention supportive governments and central banks. Even the greatest individual contributions would not merit an annual income, including gains from holdings, of about 10,000 times the average American salary.

To add insult to injury, Alpha calculates that at least 12 of the 25 top guys (sorry, ladies, no women in this club) underperformed in 2014. That is not surprising in a highly competitive industry. BarclayHedge, a consultant which monitors about 3,000 hedge funds, reports the average net return in 2014 was 3 percent. The U.S. stock market provided close to 14 percent.

http://blogs.reuters.com/breakingviews/2015/05/05/hedge-fund-pay-hauls-a-political-financial-shame/

We have one Ah Loong (since the 1980s), Lui, Yaacob and Lim Hng Kiang and had Wong Kang Seng, Mah Bow Tan, Raymond Lim and Goh Chok Tong.

Brit hedgies bearish on Asia/ Khong kanna wait longer?

In Emerging markets, Property on 28/04/2015 at 6:09 am

From yesterday’s Lombard column in FT

Bearish hedgies have confined themselves to shorting shares in Asia-focused fund managers …

Crispin Odey is chief among Mayfair’s prophets of doom. The pioneering hedge fund manager expects collapsing eastern markets to tip the world back into recession. He has accordingly sold 6.4 per cent of Ashmore and 1.5 per cent of Aberdeen in expectation of their shares dropping. About 16 per cent and 8.6 per cent of these fund managers’ free floats have been sold short, according to Markit.

,,, Aberdeen, for example, is a skilled Asian fund manager in the view of pundit Mark Dampier of Hargreaves Lansdown. Short sellers probably just think Martin Gilbert’s group specialises in a product so dangerous that it would be transported in lead-lined vessels if it were a physical commodity.

Shares in asset managers offer geared exposure to the markets in which they specialise. Their overheads stay the same, at least temporarily, even as their assets balloon or deflate in response to fluctuating stock prices and fund flows. Bears are presumably shorting Asian stock index futures too, though less visibly.

If the bears are right, Khong and Blackstone may have to wait to receive their rewards from Sentosa

https://atans1.wordpress.com/2015/01/27/sentosa-cove-god-tells-khong-to-wait-5-yrs-2/

and

“Blackstone seems to look for distressed assets and deep value,” said Vikrant Pandey, an analyst with UOB Kay-Hian Pte in Singapore. “In the U.S. it lapped up mass market apartments for their rental yields and deep value. In Singapore the luxury segment is offering deep value compared to mass market.

http://www.bloomberg.com/news/articles/2015-03-31/blackstone-singapore-property-bet-seen-winning-as-elections-loom

Hedge funds Won’t Make You Rich/ But what will

In Financial competency, Financial planning on 09/12/2014 at 11:51 am

Do you, as a pension-fund manager, or rich individual investor, think that you have an above-average ability to pick out the non-superstar hedge funds that will outperform in the future? And if so, why? Also, is your superior fund-picking ability worth the average hedge-fund fee?

If you decide the answer is “no,” then you should consider investing in an index such as the HFRX Global Hedge Fund Index, which replicates hedge-fund returns net of fees — so it helps with portfolio diversification but not fee reduction.

http://www.bloombergview.com/articles/2014-05-21/hedge-funds-won-t-make-you-rich

Bear makes money in bull mkt

In Financial competency on 08/12/2014 at 12:02 pm

Sure he underperforms S&P but it’s like being paid by an insurance co. to buy life insurance.

BEARISH FUND VS. THE BULLS STILL PROFITS The stock market has been rising for years, but Universa Investments, one of Wall Street’s most bearish investors, has found a way to make money anyway, Peter Eavis writes in DealBook. The hedge fund, founded by Mark Spitznagel, is set up with the aim of making money in an economic and financial collapse. Big pessimistic bets usually lose a lot of money when stocks are rising, as they have since 2009. But Universa is saying that its investment strategy has been able to produce consistent gains since then, including a 30 percent return last year, according to firm materials that were reviewed by The New York Times. The benchmark Standard & Poor’s 500-stock index in 2013 had a return of 32 percent with dividends reinvested.

Mr. Spitznagel’s strategy stems from his skepticism toward government efforts to revive the economy. He acknowledges that the stimulus policies of the Federal Reserve and other central banks have the power to drive stocks higher. But they will ultimately be self-defeating, he contends. This theory holds that another crash will occur when the Fed stops being able to stoke the economy. Universa’s strategy seeks to profit when confidence in the central banks is strong ‒ and when it evaporates. “The Fed has created a trap in this yield-chasing environment,” Mr. Spitznagel said in an interview. The Universa strategy has produced gains of 10 percent this year, slightly less than the stock market overall. It’s been up every year since 2008, according to the materials.

Universa is not alone in saying that it can make money in good times and bad. Other firms also offer bearish bets that clients can use to hedge their stock portfolios. Such bets often cost so much that they have to be used sparingly. Yet Universa seems to be saying that its catastrophe insurance is comparatively cheap. The Universa marketing materials say that its strategy would theoretically result in a 16 percent gain if the S.&P. 500 fell 30 percent. For his part, Mr. Spitznagel is certain that another collapse will come.

Olam: Ang Moh Kaw bites

In Commodities, Corporate governance on 28/11/2012 at 5:21 am

It’s been over a week since  Muddy Waters made allegations about the accounts of Olam. Since then Olam has come out swinging, refuting the allegations and suing.

Yesterday evening, the report was made available. Most of the issues have been flagged by analysts earlier. But there are issues about the restatements of accounts that don’t affect profits and capex that need addressing by Olam.

Remember Temasek owns 16% of Olam. So it too will be studying the report.

Old fashion 60/40 beats hedgies! Lot cheaper too

In Financial competency on 19/07/2012 at 6:22 am

Before they discovered hedge funds, pension funds and endowments typically held portfolios with 60 percent in equities and 40 percent in bonds. Many would be better off if they had stuck with the old formula.

Hedge funds have trailed both the Standard & Poor’s 500 Index and a Vanguard index fund with the same 60/40 mix over the past five years, according to data compiled by Bloomberg. The balanced fund beat the main Bloomberg hedge-fund index in six of the last seven calendar years, according to data compiled by Bloomberg.

http://www.businessweek.com/news/2012-07-11/hedge-funds-trail-vanguard-as-elliott-returns-atypical

Still as Bloomberg News reports: “GLG Partners, a unit of the world’s largest publicly traded hedge fund manager, formed a long-short equities team in Asia co-headed by a former fund manager at Singapore’s sovereign wealth fund, seeking opportunities in the region’s stock market.” http://www.bloomberg.com/news/2012-07-15/glg-forms-asia-equities-team-co-headed-by-former-gic-manager.html

 

 

 

This guy is shorting China & emerging markets

In China, Emerging markets on 14/06/2012 at 7:11 am

And a bull on US retailers.

And he has outperformed his peers!

http://www.bloomberg.com/news/2012-06-06/a-contrarian-fund-manager-bets-against-emerging-markets.html

Update on S’pore as hedgie home

In Economy on 06/06/2012 at 6:21 am

Smaller Asian hedgies are closing (US$120m is “peanuts”). http://www.reuters.com/article/2012/06/04/lehman-hedgefund-closure-idUSL3E8H420G20120604

Not gd news for S’pore’s financial centre aspirations. It once (pre 2007 crisis) had lax rules to get these guys in, hoping they would grow.

But hope springs  eternal. 

Coming our way? Many of  funds in Switzerland had juz relocated from London. But now the Swiss government is considering rules that would turn a relatively “light-touch” regulatory environment into “one of the most exacting jurisdictions in the world to run a hedge fund,” the Financial Times reported about two months ago.

Funny that our constructive nation-building media don’t report this news. Been too busy sliming WP, to report on a possible positive development.

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