Japan-focused funds had three consecutive months of negative returns this quarter. These numbers look particularly jarring in contrast to the 2013 returns, from back in the days when Abenomics was being hailed as a success.
Hedge Fund Industry Trends
By Jeff Malec, CAIA CEO, Founding Partner Attain Capital Management, LLC The Twittersphere couldn’t get enough of the news last week that hedge fund legend Paul Tudor Jones was shutting down one of his eponymous funds, the Tudor Tensor Fund (try saying Tudor Tensor 10 times fast). And critics of hedge funds will jump to the [...]
Have the emerging market assets and the funds focused thereon warranted this return of confidence by their recent returns? The answer to this question can't be any more emphatic than, "yes, somewhat."
Few choose to act on the U.S. JOBS Act 'benefits.'
The story told here of Bruce Kovner and a botched soybeans trade conveys a lesson about the value of persistence, and a lesson about risk management.
Why convert a hedge fund to a mutual fund instead of establishing a stand-alone vehicle available to retail investors that could invest alongside the existing hedge fund?
AIFMD brings many changes to the table. Grant Thornton Ireland has issued a new paper looking at the ramifications.
Cutting latency in any one layer is a task distinct from that of cutting it in any of the others. For the physical or interface layer (the ground floor of our ziggurat), optimization involves fiber optics and efficient queue management.
Global macro was the strategy of choice for many of the big managers early in their careers. Big-name brands including Soros, Tudor and Moore saw the value of the strategy in the 1990s. This oft-misunderstood strategy is returning to the forefront. Diane Harrison looks at why.
Deloitte's pie graphs emphasize the degree to which both hedge funds and PE vehicles have become dependent upon institutions in general, and detached from the retail market. But Deloitte says that 2014 "will likely see additional efforts by alternative fund managers to engage the retail investor base by taking their alternative investment strategies mainstream."
Managed futures are performing quite poorly. They also have a higher standard deviation than the HF industry aggregate, so it seems that if you're invested there your losses are at least buying you greater risk. [Wait. That can't be right.]
A new white paper from Debtwire and Bingham McCutchen finds some reason to be bullish about the distressed debt market in 2014. The long-awaited tapering of the Federal Reserve's easy-money policy may set off a wave of defaults, creating opportunities for the wary.
The latest in a series of annual reports from Rothstein Kass on women in the alternatives world adopts a somewhat less cheery tone than did that of last year. No longer is the dominant metaphor a "tipping point." Now it's a marathon.
Rene Levesque, guest author, looks at the differences between absolute return and alpha and answers the question: can you absolutely return alpha?
Guest columnist Diane Harrison considers performance. What's the alternative?
Guest columnist Don Steinbrugge provides his thoughts on what the coming year will bring for hedge funds.
Guest columnist Diane Harrison on taming the taper tiger.
Ogier Partner Peter Cockhill recently examined the direction in which the Cayman Islands regulator CIMA is headed on fund governance. He thinks the costs of the new framework, though real, will prove reasonable given the benefits.
October saw some outflow of money from hedge funds in North (and Latin) America, though there were net inflows in the other regions. Eurekahedge attributes the North American outflow to profit taking and portfolio shuffling, and expects that money will be back.
Guest columnist Andrew Beer looks at fee reduction as an "alpha generator."
Guest columnist Diane Harrison looks at the U.S. JOBS Act for what it is...and isn't.
Cerulli reminds us that risk-on/risk-off environments now alternate with dizzying speed. Even within the course of 2013 there has been a swing from cautious optimism to just-plain cautious.
Guest columnist Don Steinbrugge looks at the asset-raising obstacles for small- to mid-sized hedge funds.
Print 'em out and head to the beach for one last hurrah of summer!
Commonfund doesn't seem to have its heart in the project of defending hedge funds specifically as winners of alpha. Rather, its new white paper offers other, non-alpha, defense of the hedge fund as an institution.
Grant Jaffarian, AlphaTerra LLC, discussed the importance of messaging
Citi Prime's report has in mind specifically the situation of hedge fund firms that are interested in expanding into the public-offerings space. They have to keep in mind that they'll have a completely different investing audience from that of the QIPs and institutions to which they are accustomed.
As Julian Young, Partner, EMEIA Asset Management, E&Y put it, some alternative investment fund managers will need to "operate across a patchwork quilt of regulatory standards [in Europe] for the next few years at least" despite the standardization goals that were part of the appeal behind AIFMD.
Guest columnist Barbara Tollis takes a tongue-in-cheek look at the JOBS Act.
The key to an equity hedge strategy in the U.S. at present is that “the basket of those stocks generating healthy profits becomes clearer to differentiate from those that are having trouble doing so” through the earnings season. PrevInvest is moderately bullish on this, but not bullish on an event-driven strategy.
Celent reports that for many wealth managers the nature of market conditions, and in particular the ever more strenuous compliance demands, have pressed them to make more effective use of the technology portion of their budget, from the front office to the back. We give some thought to the implicit imagery.
Don Steinbrugge, guest columnist, on what the US JOBS Act may mean for hedge fund marketing.
Asset managers within the Asian boutique universe keep telling GFIA that "asset raising is hard" in the present climate. It isn't going to become easy any time soon, but there is a new level of stability.
Private fund managers who want to be part of this wave, who hope to compete for the retail investment market with their absolute-return and non-correlation toolkit, shouldn’t think it is going to be easy. One of the sections of the SEI report is headed “understanding the hurdles.”
On of the key points of the new report from Barclays, Making It Big, is that there are four broad business strategies that define hedge fund managers: product specialists (PS); asset class specialists (ACS); multi-strategy managers (MSM); and diversified alternative asset managers (DAAM). This classification has implications for growth.
It was surely not irrational for Starboard Value, a year ago, to ask its fellow AOL shareholders to withhold or withdraw the sort of 'trust' that Armstrong has requested of them on the subject of the hyper-local news experiment Patch.
The arrest of Rajaratnam almost four years ago and the subsequent anti-insider enforcement activity doesn't of course come as news. But it raises fascinating questions about consequences: what have been the consequences amongst traders?
To encourage further exchange and understanding, I went back to Mr. Rice, after reading a comment from our reader, and asked him to expand on managed funds and their noncorrelation with traditional (largely equity) investment strategies. Tags, Agriculture, Commodities, Derivatives
Guest columnist Diane Harrison takes a hard look at asset raising and the people who do it.
PrevInvest begins a new report by documenting the doldrums in which long/short equity is stuck. As a first approximation because in the post-crisis world, certain traditional forms of stock-picker virtue have gone unrewarded.
Three scholars find a very real possibility that there is a cause and effect relationship between index flows in the derivatives markets, at least the agricultural index markets, on the one hand and price moves in the underlying commodity on the other.
The pattern with respect to allocations by institutional investors to hedge funds since 2009 is somewhat different from that of allocations to private equity. As Preqin’s report explains, many institutions have long been familiar with hedge funds, their learning curve has flattened out so to speak, and they have established a target allocation for hedge funds considered as an asset class.
Twelve ministries in the People's Republic of China, including the Ministry of Industry and Information Technology, have together released guidelines for accelerating M&A activity in key industries. this is one of the "bright spots" that may lighten up the future for the M&A world, though macro-economic realities in the U.S. and Europe are holding it back.
By Don Steinbrugge
Guest columnist Andrew Beer re-visits two significant studies on hedge fund replication.
One take-away from David Stockman's new best selling book is that the phrase "hedge fund" may well be on its way beyond descriptive significance. In the public realm, a "hedge fund" is now as much a metaphor as is a "Trojan horse." It is becoming a metaphor for any institution's failure to hedge.
Part II of a new SEI report on hedge funds and adapting to survival.
All three classes of hedge fund outperformed the relevant index, Topix 1000, in the period since January 2004. Also, both broad based indexes and two of the HF indexes show a sharp uptick on the right hand edge of the graph, reflecting the ascension of Prime Minister Abe and the aggressive policies of the Bank of Japan.
“Few managers would be surprised,” SEI says, “that nearly one-third of the institutions queried in SEI’s 2012 survey reported making their due diligence processes more robust over the last two years.” The new robustness in the search for the nature and sustainability of the funds’ edge involves a new granularity, the questioning of specific investment decisions in the context of portfolio construction models.
"America’s top 25 hedge fund managers make more than all the CEOs of the S&P 500 combined.”????--The Economist, October 2012 Hedge Funds have had an incredible run over the last 2 decades. The annual salaries and bonuses of the most successful managers have been amongst the highest paid to anyone, anywhere, ever. Astronomical wealth has kept everything from top end international property to luxury goods to private yachts afloat for many years. ?This is starting to change. Multiple headwinds of lackluster performance, increasing competition and invasive regulation are starting to bite.